ACT INSURANCE AUTHORITY
Objectives
The objectives of the Authority are to: carry out the business of insurer of Territory risks; take out insurance of Territory risks with other entities; satisfy or settle claims in relation to Territory risks; take action for realising, enforcing, assigning or extinguishing rights against third parties arising out of or in relation to its business; develop and promote good practices for the management of Territory risks; give advice to the Treasurer about insurance and the management of Territory risks; and administer, under agreement with the Chief Minister’s Department, the Default Insurance Fund, to be established on 1 July 2006.
2006‑07 Priorities
Strategic and operational issues to be pursued in 2006‑07 include:
•	working with selected agencies to reduce the total cost of risk to Government;
•	assisting agencies in the analysis of their operations and assets to improve risk assessment and management;
•	facilitating agency access to the claims reporting and data analysis system to provide an integrated claims management process;
•	ensuring that accurate information is available for the Authority’s management, its clients and its insurers;
•	conducting regular reviews of existing claims to ensure that appropriate management is being applied, that realistic cost estimates are included in the accounts and that risk management measures are implemented to reduce the chance of similar claims occurring;
•	conducting progressive reviews of arrangements between agencies and external bodies to ensure that the appropriate level of risk is transferred to contractors, as well as providing advice on new contracts; and 
•	developing and implementing systems and procedures to administer, under agreement with the Chief Minister’s Department, the Default Insurance Fund.

ACT Insurance Authority	
Operating Statement	
  2005-06			  2005-06	   2006-07		  2007-08	  2008-09	  2009-10		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
31,243		User Charges - ACT Government	31,549	42,038	33	43,089	44,166	45,270		
7,096		Interest	7,096	8,371	18	8,320	8,708	9,100		
2,112		Other Revenue	2,316	2,305	..	2,495	2,558	2,627		
40,451		Total Revenue	40,961	52,714	29	53,904	55,432	56,997		
		Gains								
0		Total Gains	0	0	-	0	0	0		
40,451		Total Income	40,961	52,714	29	53,904	55,432	56,997		
		Expenses								
976		Employee Expenses	959	982	2	1,027	1,067	1,109		
143		Superannuation Expenses	142	233	64	243	253	264		
1,037		Supplies and Services	937	1,155	23	1,154	1,179	1,204		
40,901		Other Expenses	36,961	46,515	26	47,504	48,700	49,721		
43,057		Total Ordinary Expenses	38,999	48,885	25	49,928	51,199	52,298		
-2,606		Operating Result	1,962	3,829	95	3,976	4,233	4,699		

ACT Insurance Authority	
Balance Sheet	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/06			as at 30/6/06	as at 30/6/07	   Var	as at 30/6/08	as at 30/6/09	as at 30/6/10		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
1,650		Receivables	5,111	4,516	-12	4,516	4,516	4,516		
55,425		Investments	69,804	81,952	17	107,614	118,608	129,985		
57,075		Total Current Assets	74,915	86,468	15	112,130	123,124	134,501		
		Non Current Assets								
8,503		Receivables	15,813	15,741	..	15,741	15,741	15,741		
81,858		Investments	67,659	68,507	1	43,996	41,289	38,665		
90,361		Total Non Current Assets	83,472	84,248	1	59,737	57,030	54,406		
147,436		TOTAL ASSETS	158,387	170,716	8	171,867	180,154	188,907		
		Current Liabilities								
37,625		Payables	28,628	31,773	11	43,487	44,500	45,513		
146		Employee Benefits	125	141	13	141	141	141		
37,771		Total Current Liabilities	28,753	31,914	11	43,628	44,641	45,654		
		Non Current Liabilities								
109,511		Payables	144,431	149,765	4	135,226	138,267	141,308		
133		Employee Benefits	155	160	3	160	160	160		
109,644		Total Non Current Liabilities	144,586	149,925	4	135,386	138,427	141,468		
147,415		TOTAL LIABILITIES	173,339	181,839	5	179,014	183,068	187,122		
21		NET ASSETS	-14,952	-11,123	26	-7,147	-2,914	1,785		
		REPRESENTED BY FUNDS EMPLOYED								
21		Accumulated Funds	-14,952	-11,123	26	-7,147	-2,914	1,785		
21		TOTAL FUNDS EMPLOYED	-14,952	-11,123	26	-7,147	-2,914	1,785		

ACT Insurance Authority	
Cash Flow Statement	
  2005-06			  2005-06	   2006-07		  2007-08	  2008-09	  2009-10		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
31,906		User Charges	31,549	42,702	35	43,089	44,115	45,219		
7,096		Interest Received	7,096	8,371	18	8,320	8,708	9,100		
43,768		Other Revenue	44,092	44,014	..	45,209	45,414	45,640		
82,770		Operating Receipts	82,737	95,087	15	96,618	98,237	99,959		
		Payments								
1,098		Related to Employees	1,080	1,194	11	1,270	1,320	1,373		
1,035		Related to Supplies and Services	935	1,153	23	1,041	1,170	1,196		
72,831		Other	81,091	79,741	-2	79,940	80,998	82,175		
74,964		Operating Payments	83,106	82,088	-1	82,251	83,488	84,744		
7,806		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	-369	12,999	#	14,367	14,749	15,215		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
911		Proceeds from Sale/Maturities of Investments	911	911	-	13,934	911	911		
911		Investing Receipts	911	911	-	13,934	911	911		
		Payments								
19,315		Purchase of Investments	10,944	1,762	-84	2,639	4,666	4,749		
19,315		Investing Payments	10,944	1,762	-84	2,639	4,666	4,749		
-18,404		NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES	-10,033	-851	92	11,295	-3,755	-3,838		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
23,000		Capital Injection from Government	23,000	0	-100	0	0	0		
23,000		Financing Receipts	23,000	0	-100	0	0	0		
23,000		NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES	23,000	0	-100	0	0	0		
12,402		NET INCREASE/(DECREASE) IN CASH HELD	12,598	12,148	-4	25,662	10,994	11,377		
43,023		CASH AT BEGINNING OF REPORTING PERIOD	57,206	69,804	22	81,952	107,614	118,608		
55,425		CASH AT THE END OF THE REPORTING PERIOD	69,804	81,952	17	107,614	118,608	129,985		

ACT Insurance Authority	
Statement of Changes in Equity	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/06			as at 30/6/06	as at 30/6/07	   Var	as at 30/6/08	as at 30/6/09	as at 30/6/10		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
-20,373		Opening Balance	-31,612	-14,952	53	-11,123	-7,147	-2,914		
		Accumulated Funds								
0		Net Effect of Change in Accounting Policy	-8,302	0	100	0	0	0		
-2,606		Operating Result for the Period	1,962	3,829	95	3,976	4,233	4,699		
		Reserves								
-2,606		Total Income And Expense For The Period	-6,340	3,829	160	3,976	4,233	4,699		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
23,000		Capital Injections	23,000	0	-100	0	0	0		
21		Closing Balance	-14,952	-11,123	26	-7,147	-2,914	1,785		
Notes to the Budget Statements
Significant variations are as follows:
Operating Statement
•	user charges – ACT Government:
–	the increase of $0.306 million in the 2005‑06 estimated outcome from the original budget reflects the additional insurance cover required by agencies; and
–	the increase of $10.489 million in the 2006‑07 Budget from the 2005‑06 estimated outcome is due to an increase in the annual insurance premiums charged to agencies.  The increase in premiums recognises an increase in the net expected cost of future claims arising from significant growth in award settlements and the growing number of medical malpractice and public liability claims. 
•	interest:  the increase of $1.275 million in the 2006‑07 Budget from the 2005‑06 estimated outcome reflects the accumulation of investments in order to meet future claims;
•	other revenue:  the increase of $0.204 million in the 2005‑06 estimated outcome from the original budget reflects an increase in insurance recoveries and an unrealised gain on investments.  This is slightly offset by a decrease in construction industry policy premiums for Government capital works programs;
•	superannuation expenses:  the increase of $0.091 million in the 2006‑07 Budget from the 2005‑06 estimated outcome is largely due to increased notional superannuation contribution rates;
•	supplies and services:  the increase of $0.218 million in the 2006‑07 Budget from the 2005‑06 estimated outcome reflects the anticipated increases in the cost of insurance brokers and other consultants;
•	other expenses:
–	the decrease of $3.940 million in the 2005‑06 estimated outcome from the original budget recognises a decrease in the cost of reinsurance; and
–	the increase of $9.554 million in the 2006‑07 Budget from the 2005‑06 estimated outcome reflects increases in medical malpractice and public liability claims and an increase in the anticipated cost of reinsurance.
Balance Sheet
•	current receivables:
–	the increase of $3.461 million in the 2005‑06 estimated outcome from the original budget recognises an increase in reinsurance recoveries and interest receivable;
–	the decrease of $0.595 million in the 2006‑07 Budget from the 2005‑06 estimated outcome reflects the reinsurance recoveries received;
•	current investments:
–	the increase of $14.379 million in the 2005‑06 estimated outcome from the original budget reflects the movement of investment from noncurrent to current;
–	the increase of $12.148 million in the 2006‑07 Budget from the 2005‑06 estimated outcome reflects the accumulation of investments in order to meet future claims;
•	non-current receivables:
–	the increase of $7.310 million in the 2005‑06 estimated outcome from the original budget recognises the movement in the provision for reinsurance recoveries;
•	non-current investments:
–	the decrease of $14.199 million in the 2005‑06 estimated outcome from the original budget reflects the movement of funds to short term investment;
–	the increase of $0.848 million in the 2006‑07 Budget from the 2005‑06 estimated outcome reflects the accumulation of investments in order to meet future claims;
•	current payables:
–	the decrease of $8.997 million in the 2005‑06 estimated outcome from the original budget is a recognition of  more claims as noncurrent payables;
–	the increase of $3.145 million in the 2006‑07 Budget from the 2005‑06 estimated outcome reflects anticipated growth in the cost of future claims;
•	non-current payables:
–	the increase of $34.920 million in the 2005‑06 estimated outcome from the original budget reflects the increase in cost and number of medical malpractice and public liability claims and more claims being recognised as non‑current; and
–	the increase of $5.334 million in the 2006‑07 Budget from the 2005‑06 estimated outcome reflects the anticipated growth in the cost of future claims.