Frequently Asked Questions

Why did Statewide Mutual form?
The mutual was established in late 1993 in response to underwriters withdrawing their support for NSW local government in Public Liability and Professional Indemnity cover.

During this time, individual councils with poor claims records were being heavily penalised and many had difficulty obtaining cover. They were insured in a variety of manners, such as directly with underwriters or through brokerage firms.

At the time of Statewide Mutual’s formation, there were no underwriters in Australia willing to write local government business.

What products are offered to Member Councils by Statewide Mutual?
We offer Member Councils an extensive and comprehensive range of protection products and supporting services, all designed to manage individual councils’ primary areas of risk. These include:


How many NSW local government councils are members of Statewide Mutual?

As of 23 March 2022, there are 114 members. We are the largest local government self-insurance pool in Australia.

What’s meant by ‘self-insurance’?
Self-insurance is where an organisation chooses to retain part of its potential financial risks. This is opposed to transferring all risk to an underwriter.

The purpose of self-insurance is for an organisation to take on responsibility for smaller claims, which is often more economical than paying for policies that cover all claims. Cover is taken out for larger, more unpredictable occurrences that might be difficult to fund.

With Statewide Mutual, self-insurance is in the form of deductibles (excess) and ‘Self Insured Retention’ (SIR)*. SIR is an amount that each Member Council must pay following an incident before a claim is paid by the insurer. The combination of these two self-insurance measures limit a council’s risks in two ways.

* SIR does not apply to the Liability Mutual.

Do Member Councils own the Schemes?
Yes. Each Scheme is owned by the participating Member Councils.

In owning the Schemes, they benefit from cost containment measures and equity building through generous annual rebates. These rebates result from surplus contribution distributions, totalling over $70 million to date.

Is the size of the Scheme important?
Yes. The old adage that ‘Bigger is Better’ applies to risk protection arrangements for local government in Australia.

To start with, Member Council costs are actively reduced by spreading the risk of exposure to claims and higher member contribution levels across a large membership base.

Adding to this, our substantial buying power is sufficient enough to be able to negotiate market-leading, long-term reinsurance treaties with underwriters.

A number of Member Councils within the Statewide Mutual Liability Scheme have incurred loss ratios of well in excess of 100% and yet there’s been no substantial increase in their individual renewal terms when that has occurred.

Do Member Councils representatives sit on the Board of Management?

Yes. Statewide Mutual’s Board of Management comprises senior level management from councils representing each of the 11 Statewide Regions in NSW. In addition, there are three representatives of Scheme Manager JLT Risk Solutions (JLT), including JLT’s CEO for Australia & New Zealand. The Board is appointed by the Member Councils and governs the operation of the Schemes. In accordance with the terms of the Deed, The Board is responsible for:


  1. determining levels and coverage of Primary Insurance for each fund year and for each Scheme;
  2. establishing Annual Funds for each fund year, arranging contributions to and payments of Liabilities from Annual Funds; and
  3. subject to the function of the Claims Committee, the general management of the Scheme. The Board governs the operation of the Schemes and JLT administers its day to day management.
What is Statewide Mutual’s Mission Statement?

From 1993, Statewide Mutual’s mission is: Applying innovative practices in the management of Local Government insurance which ensure the protection of Members through stable premiums, cost containment and spread of risk.

Has the mutual achieved its mission?
Yes, and it continues to do so. The following demonstrates Statewide Mutual’s success in achieving the Mission Statement.

Continuous Innovation
The Board has responded to the needs of Member Councils through provision of a range of projects that address emerging risks and any new legislative requirements. To learn more about our Board Initiatives please visit our Member Centre.

Protection of Members
When the HIH Group of Companies went into liquidation during March 2001, Statewide Mutual came to the rescue. The Board of Management resolved that no Member Council should suffer financially on any Statewide Mutual claim as a result of the HIH demise. We met the costs of unsettled claims against impacted councils whose claims occurred during the period HIH provided re-insurance to the Scheme.

Without this support, totalling approximately $9 million, impacted councils were in danger of financial disaster.

A number of the other local government providers weren’t able to provide the same support to their members.

Stable Member Contributions
Regardless of the degree of collective claims occurrences from our members, our member contributions remain stable year on year. This allows councils to budget in an environment where income is always constrained.

Due to our sheer size, the effectiveness of the reinsurance, combined with innovative risk management and claims strategies, members enjoy consistently stable member contributions.

Cost Containment
Member Councils benefit from annual rebates. In fact, all have received rebates since 1998. To date we’ve handed back over $70 million to members in the form of surplus reimbursements, attributed to by low claims occurrences in the Liability, Property and Fidelity Guarantee Schemes.

And, what’s more, the contribution surpluses from the Public Liability Mutual can’t be eroded by claims due to there being no self-insured retention.

Spread of Risk
Due to being the largest local government self-insurance pool in Australia, we’re able to spread the risk of exposure.

The greater the number of participants in the pool, the more resilience it has if the group experiences large-scale negative events. Whilst a catastrophic multi-million dollar loss may have a significant effect on smaller providers, its impact is absorbed when spread amongst a larger group that is the Statewide Mutual membership base.

Risk is spread further because the NSW Liability Scheme is part of a National Local Government placement in the Lloyds and London Market. Therefore the risk is spread over in excess of 500 Councils nationally.

What value-added services does Statewide Mutual offer?
Risk Management Program
Risk Management is a cornerstone in the success of the Scheme. The program is aimed at reducing incidences and has two key purposes:

  1. to minimise claims costs and ultimately stabilise member contributions
  2. to make communities safer for residents and visitors alik

Member Centre
Our Member Centre is a members-only portal and an invaluable secure resource centre.
The Member Centre features:

  • Business intelligence tools to help visualise and consolidate risk and claims activity
  • Risk Management tools; Best Practice Manuals, Guidance Notes and Training Manuals
  • Downloadable forms for lodging a variety of claims
  • Cover summaries and claims reports
  • Industry news and events information
  • Online claims submissions

It saves council staff time in staff claims processing and accuracy; all contributing to a better ROI.

Other value-added services:

  • Dedicated claims management
  • Board funded initiatives
  • Asset Risk Improvement inspections
  • Access to specialist legal advice
  • Valuations
  • Equity building

Contact your Account Manager to learn more.

Is Statewide Mutual APRA Regulated?
No, we’re not subject to APRA requirements due to being a ‘Discretionary Mutual’.

However, the Board of Management has determined that Statewide Mutual will operate as though it was required to comply.

Who determines what the member contributions will be?
Each year, Statewide Mutual’s Finance Committee is presented with budgets on each of the Schemes. These budgets contain options on variations in expiring contributions (generally ranging from 0% to 10%). The Finance Committee recommends which option is best suited to the continued financial security of the Scheme. When considering the options, the Board of Management is always mindful of the financial hardships that NSW councils operate under as a result of rate pegging legislation. Once the Board has determined the option to be applied, that percentage is applied across the membership base. However, terms may be varied on the Property Mutual in cases where substantial increases in an individual Member Council’s total asset values warrant a reduction in the rate. Terms can also be varied on the Liability Mutual if a Member Council chooses to vary its claims deductible (excess).
Why doesn’t Statewide Mutual apply a formula in calculating Member Councils’ member contributions?

Part of Statewide Mutual’s mission statement is to “…ensure the protection of Members through stable premiums, cost containment and spread of risk.”

If a formula was in operation, each individual Member Council’s loss ratio would necessarily be a component in the formula. Contributions could not be stable if they fluctuated based on claims.

Neither the Board, nor the Scheme Managers JLT Risk Solutions have seen the benefit of a formula. However, if the majority of the Scheme’s Members were in its favour, then we would undertake to consider how it would work.

How are surpluses distributed?
The Deed  under which Statewide Mutual was established in 1993, specifies that the Board of Management may at any time determine and instruct that any surplus or part of a surplus in an Annual Fund is to be:

(a) distributed to Members in such shares as the Board of Management determines;
(b) retained within the Annual Fund for such purposes as the Board of Management determines; or
(c) applied or retained in the Annual Fund to meet a potential deficiency in the Annual Fund for any subsequent year or for any other purpose as the Board of Management determines.

What’s the relationship between Statewide Mutual and JLT?

On behalf of Statewide Mutual, JLT Risk Solutions administer the day to day management of the Schemes, as well as place other coverage required outside of the core schemes for Member Councils. Their key management responsibilities include:

  • participating in the Mutual to provide advice and assistance in relation to all aspects;
  • managing claims in conjunction with the Claims Committee;
  • arranging Primary Insurance; and
  • advising members in relation to loss prevention and risk minimisation.
Does JLT maintain a check on the solvency of reinsurers?
JLT has a dedicated security division that maintains a close watch on credit ratings worldwide, ensuring that any underwriter providing cover for a JLT client, such as Statewide Mutual, must be financially strong and have proven capabilities to meet their obligations in accordance with the policies they underwrite.

It’s no surprise that JLT recommended placement of the Statewide Mutual with underwriters other than FAI and HIH in 1998. As a result, the uninsured losses the Scheme sustained following the HIH Group of Companies being placed in liquidation in 2001 were significantly less than they otherwise would’ve been.

How does Statewide Mutual’s claims administration work?
JLT, as Scheme Manager, is responsible for the management of all NSW Local Government claims lodged against Member Councils.

The JLT claims team consists of seven dedicated Claims Officers who work exclusively with local government. They have delegated authority to manage claims up to your individual deductibles, beyond which the matter must be referred to underwriters for instructions.

Because the Liability Scheme is fully reinsured, Scheme underwriters have final say on management of claims above Member Councils’ individual deductibles.

Claims Officers are available to meet with councils at any time to discuss particular claims or assist in the management of a claim.

Does JLT review the performance of service providers on behalf of the Board?
The Scheme’s Legal Panel is ‘agreed’ by Statewide Mutual’s reinsurers. Where a legal firm is not performing to the satisfaction of the JLT Claims Officers, they deal with the situation immediately through discussion, direction and management of the claim.

There is no set panel of Loss Adjusters – appointment is generally determined on availability, location and expertise.

Auditors and Actuaries are appointed for a specific period, after which tenders may be called and the Board determines the successful tenderer.

Has the Board ever approved an ex-gratia payment to a Member Council?
Under the terms of Clause 8.2.2 (b) (ii) in the Statewide Mutual Deed, the Board of Management can “…in its absolute discretion by special resolution, determine that no Liability or Loss, or a lesser amount than that recommended by the Claims Committee, be paid to the Claiming Member.”

While this may be seen as being a detriment to claims administration, in practice it allows the Board to accept a claim which might otherwise be excluded from cover provided by Statewide’s reinsurers. The discretion is generally only used to the benefit of a claiming Member Council.

This discretion is not usually needed in a Liability claim, but there have been instances where ex-gratia payments have been made on Property Mutual claims.

For example, during 2012, the Board received submissions from three Member Councils for ex-gratia payments. Two were approved in the total amount of $290,000 while one was rejected in the amount of $356,000.

These ex-gratia payments are only possible because of the financial strength of each Scheme, and may be beyond the financial capability of a smaller Regional Pool.

What additional benefits arise from a small Regional Pool that are not provided under the Statewide Mutual Schemes?
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