This is an HTML version of an attachment to the Official Information request 'ACC board minutes - OIA request'.
 
Minutes of a meeting of the Board of the Accident Compensation Corporation held at 
ACC Boardroom, Level 11, PwC Tower, 188 Quay Street, Auckland on Thursday, 25 July 
2019 at 9.00 am. 
 
Present 
Dame Paula Rebstock 
Chair 
 
Ms Anita Mazzoleni 
Member 
 
Mr James Miller 
Temporary Deputy Chair 
 
Mr David May 
Member 
 
Ms Leona Murphy 
Member 
 
Dr Tracey Batten 
Member 
 
Mr John Brabazon 
Member 
 
 
In attendance 

Mr Scott Pickering 
Chief Executive 
 
Mr Peter Fletcher 
Chief Technology & Transformation Officer 
 
Mr Mike Tully 
Chief Operating Officer 
 
Ms Deborah Roche 
Chief Governance Officer 
 
Mr Herwig Raubal** 
Chief Actuarial and Risk Officer 
 
Mr John Healy 
Chief Financial Officer 
 
Ms Emma Powell 
Chief Customer Officer 
 
Ms Sharon Champness 
Chief Talent Officer 
 
9(2)(a)
** 
Russell McVeagh 
Board only session 
9(2)(a)
** 
Head of Actuarial Services 
Item 6.2 
9(2)(a)
** 
Taylor Fry 
Item 6.2 
Ms Gabrielle O’Connor** 
Head of Client Service Delivery 
Items 4.1 
9(2)(a)
** 
Head of Provider Service Delivery 
Item 6.5 
9(2)(a)
 
Executive Advisor 
Items 4.2, 6.4 
9(2)(a)
  General Counsel and Company Secretary 
Item 7.2 
9(2)(a)
 
Manager Corporate Secretariat 
 
9(2)(a)
 
Senior Associate Company Secretary  
 
9(2)(a)
 
Associate Company Secretary 
Items 2.1 – 6.1 
** Attended via telephone / videoconference 
Page 1 of 21  







 
  Procedural Business 
 Apologies 
An apology was received for Ms McDonald QC. 
 Register of Members’ Conflicts of Interest Arising 
CONFIRMED: The Board reviewed the Register of Members’ Conflicts of Interest Arising and 
confirmed that it was not aware of any other matters (including matters reported to, and decisions 
made by, the Board at this Meeting) which would require disclosure. 
  Committee Updates 
 Governance and Remuneration Committee 
The Board Chair updated the Board on the key matters considered at the Governance and 
Remuneration Committee meeting of 24 July 2019: 
•  Chief Executive performance and remuneration had been considered. The changes would 
be brought to the next Board meeting. 
•  Executive performance and remuneration had been considered. 
•  The direct market incentives scheme had been approved. Ms Champness would consult 
Mr May and Mr Brabazon to look at the recommendations for the team for the current year.  
•  The Collective Bargaining Strategy had been discussed. The main issue for ACC was to 
hold the line on the link to performance. 
•  A draft Health Services Strategy (HSS) Committee Terms of Reference (TOR) had been 
considered. The Committee had clarified that the HSS Committee would be an advisory 
committee.  
 Risk Assurance and Audit Committee 
Ms Mazzoleni updated the Board on the key matters from the Risk Assurance and Audit 
Committee (RAAC) meeting held on the morning of 25 July 2019: 
Page 2 of 21  




 
•  New insurance disclosures had been discussed, which extended previous years’ sensitivity 
analysis on the interest rate and inflation rate impact on the surplus/deficit.  
•  A Funding of Accounts note had been added to the notes.   
9(2)(h)
• 
•  The representation letter that Management makes to the Board and the Board makes to the 
auditors stil  needed some minor amendments. This would be approved by the Board via email. 
The Board Chair thanked the RAAC Chair for the Committee’s important work. 
  Board Only Session 
The Board RESOLVED, in accordance with clause 14 of Schedule 5 of the Crown Entities Act 
2004, to appoint a committee to advise it in relation to the Health Services Strategy. The Board 
would consider Terms of Reference for the establishment of the Committee via email. 
 Chief Executive’s Report 
Items raised by Mr Pickering were: 
•  General performance and focus areas 
•  ICIP update including NGCM  
•  Branch visitation programme August and September 
•  Property update 
•  Performance adviser role discussion 
•  Select Committee update. 
  Operational Reporting 
4.1 (a) ICIP Reporting 
Mr Fletcher highlighted the following: 
Page 3 of 21  

 
•  Analytics—A key milestone had been achieved with moving Eos data into the platform. This 
was a key component to broader use of advanced analytics. The remediation of 
Warehouses continued to be tight, and would continue to be so for Next Generation Case 
Management (Next Gen), however sufficient testing would be achieved to ensure there was 
no significant disruption. 
•  Client Payments (CP1)—This continued to track well; 11,000 payments had been made 
through the platform which was being tested at scale.  
Mr Healy reported on an area of benefits realisation for CP1: ACC was paying IRD a fee of 
$21 million per year. Mr Healy had reached agreement with IRD’s CFO to separate out the 
elements of that figure. It was agreed that the CP1 go-live amount was c.$6.5 mil ion which would 
go down to $0 by the end of this financial year. Additional fee reductions were being negotiated for 
the remaining c.$14 mil ion, which would be built into the budget going forward. This represented 
c.$40 mil ion NPV in new ICIP benefits. In response to a Board query, Mr Healy explained that the 
true costs of IRD’s work was likely around $10 mil ion per annum. 
Ms O’Connor provided an update on Next Gen go-live readiness:  
•  There were the typical bugs, but they were being managed. There had been change 
requests for the early life support (ELS) release. The team had reported only 13 defects, 
which was a good indicator of readiness for the August release. 
•  There were staff items flagging as ‘High’. One of these was recruitment for the transitional 
claims support team. This had not been easy and would need to be monitored. 
•  There was continued general attrition, as staff were looking at career options. Management 
was monitoring this and had mitigations in place. 
•  The Expressions of Interest process was progressing well, with 170 leaders having been 
appointed, 1500 frontline staff assessed, and the appointment of 352 people having been 
made on 24 July. The scale was huge, and was being managed well. 
•  Training materials were completed and training was underway at the sites ahead of their 
go-live on 16 September. 
Page 4 of 21  

 
•  Go-live readiness assurance activity was occurring. Al  the Management responses to 
TA29 had been closed out. There were two Amber recommendations in TA23 regarding 
post go-live activities. Management responses for TA23 had been drafted. 
•  Management had completed an internal risk and control matrix, with an internal assurance 
review for go-live underway. 
The Board’s discussion and questions focused on the following: 
•  Whether any of the 13 defects were of concern, and whether the Management responses 
to TA23 would take the two recommendations from Amber to Green—Ms O’Connor 
explained that none of the defects was of great concern; five related to issues with the CP1 
and Next Gen codes coming together, another five related to the Next Gen testing, and the 
other three related to the change requests. Al  the defects were at Sev 3 or below. And the 
Management responses would shift the TA23 recommendations from Amber to Green. 
•  Whether June’s CP1 double payments could have been stopped at the bank—Mr Fletcher 
explained that the issue had not been discovered until after the payments had cleared. 
•  The atmosphere in the offices in line for Next Gen implementation—Ms O’Conner 
explained that there was a blend of excitement and anxiety. Staff were enthusiastic about 
the changes, and these early rollouts would build confidence for the full-scale rollout. 
•  The Next Gen rollout needing to be seamless in terms of impact to clients—Ms O’Connor 
explained how the Heartbeat programme and leaders’ and ELS meetings would provide 
feedback on all elements of customer experience, which would be measured and tracked.  
•  When Analytics was due to finish—Mr Fletcher explained that the project was due to finish 
at the end of August 2019. Staff were already using the platform.  
•  The work on the Investments Team’s technology issues—Mr Fletcher clarified that the 
Dashboard provided with the ICIP Report only related to the items which had been flagged 
Red, and progress was being made. 
•  The role of the Board sub-group overseeing the Next Gen go-live—Mr Fletcher explained 
that, due to having been unable to find meeting times when everybody was available, he 
would send out written updates regularly over the next 10 days. The key decision making 
session would be on 8 August. 
Page 5 of 21  


 
RESOLVED: The ACC Board resolved to: 
(a)  Note the ICIP June 2019 Report. 
(b)  Note the Investments Technology Issues Report. 
 
 (b) Fourth Quarterly Report 
Mr Healy highlighted that the year end results, both financial and non-financial, showed mixed 
performance. On the one hand, the Injury Prevention Return on Investment was its best yet, and 
reviews performance was excellent. On the other hand, rehabilitation performance had missed its 
targets, and NTS had also dipped.  
Regarding Short-Term Claims Centres (STCC) staff turnover, Ms Champness explained that the 
external turnover rate had been 21% for last year, higher than the 17% average of ACC. The 40% 
internal turnover related mostly to moving to other roles in Client Service Delivery, and had been at 
that level for the last two to three years.  
The Board focused on the following in relation to staff turnover: 
•  The value ACC places on the STCC positions; it was not ideal if people had to move to get 
a better position. Ms Champness explained that this was part of the work LEK was doing, 
and a lot was already being done to manage turnover. Ms Champness explained the 
improvement in job grades that would occur with Next Gen, which Management hoped 
would stem turnover. 
•  The impact of this ‘posting turbulence’, which could accelerate and create an unhealthy 
dynamic. Ms Champness explained that turnover had increased in the last few years, as 
staff moved into projects such as Launch Pad. The Board suggested that a view be formed 
as to what would give ACC a workforce that would deliver ACC’s needs; incentives needed 
to be aligned to that.  
•  While the monthly reporting on turnover statistics was valuable, the information on internal 
STCC turnover had been news to the Board. This raised a question as to the Board’s 
information needs. It was a case of understanding the data in order to problem-solve. It was 
also a question of transparency. Ms Champness reported that the Contact Centres had a 
high combined internal/external turnover: 25% external, 20-25% internal. There were 
processes in place for Contact Centres to manage that turnover. In response to Board 
Page 6 of 21  

 
queries, Ms Champness explained that it was expected that Contact Centre staff would 
move on. Ms O’Connor explained that ACC hired people who were ambitious and 
intelligent and who would use those attributes to move on. 
•  Whether exit interviews were conducted to find out why staff were leaving—They were. 
Ms Champness explained that the engagement survey results from the STCC had scored 
very high, higher than the ACC average. There were few stress reports, and the main driver 
for internal turnover was career progression. In response to Board queries, Ms O’Connor 
confirmed that the level of stress reporting was accurate; STCCs handled lower complexity 
claims, and the staff who worked there were comfortable with fast paced work. Also, work 
was moved around the national team, and this helped managing any stress. 
•  Regarding Management’s expectations as to the extent to which the Next Gen job re-sizing 
(which would remove the internal incentives to change jobs) would reduce turnover, and 
Management’s strategies to get back to a steady state—Ms Champness explained that 
Management did not have a specific target. 
9(2)(a)
 and Ms Powel  presented on media issues management, highlighting the following: 
•  Media coverage recently was testing out the notion of wellbeing and fairness. Many 
agencies had been pulled into this, including ACC, as people felt empowered to raise in the 
media issues where they felt they had been wronged.  
•  The specific client stories in the media were being tracked and monitored by Ms Powell’s 
team. On average there were twelve such stories per quarter. 
•  Ms Powell and Mr Tully were working closely together on the customer issues at the root of 
the stories. Communication with customers was the key factor in their satisfaction. People 
report to media that something did not happen until the media became involved, but often 
the thing has been in train but ACC had not communicated it.  
•  Ms Powell and Mr Tully were scoping a review of the client experience in treatment injury, 
which can take up to nine months for a decision to be made by the time medical advice is 
obtained. 
The Board queried whether Management monitored the time taken to communicate decisions to 
clients, and whether clear expectations were being set with staff. Mr Tully explained that this did 
occur for written decisions. In the tour around the branches he was doing with Mr Pickering, one of 
the key messages to staff was on communication with clients. Ms Powell explained how Heartbeat 
Page 7 of 21  

 
and advanced analytics provided opportunities to get ahead of complaints, by predicting the 
customers from whom a complaint was highly likely to come. 
The Board suggested that staff attitude appeared to be key to complaints, and that complaints be 
probed more deeply for insight as to whether the problems stemmed from particular areas, or 
teams, or from the customer.  
In terms of managing client expectations, the Board noted that providers gave clients the first 
message that ACC would pay; later, ACC communicated decisions on the cases that are not 
covered. The Board suggested that medical professionals be encouraged to nuance their 
messaging to clients.  
Mr Healy continued with the Quarterly Report, highlighting the year end audit process which was 
running smoothly. The KiwiBank valuation was also going quickly and smoothly.  
Board discussion focused on the following. 
•  Whether the investment performance figure included private markets—it did. Mr Healy 
explained that June had been a poor performance month.  
•  Whether Management had set the wrong targets or whether the problem was operational 
performance—Mr Healy explained that rehab performance had been worse than expected, 
and lower targets had been set for 2019/20. ACC’s ability to manage the increased 
volumes had been underestimated. 
•  The high growth numbers— Mr Healy explained that, from his perspective, the overall 
claims volumes historically, at 2-3%, aligned with population growth; the aging population, 
at 3% growth, aligned with the higher growth now in WC volumes. In 2014 it spiked at 12-
13%, which coincided with ACC’s service needs assessments, when it had proactively 
gone out to clients to ensure correct WC coverage. Since then, the correlation of 5-6% 
growth was in line with real GDP movement. WC growth was tailing off, and in July has 
fallen below 5%, correlating with economic growth which was dampening. Mr Healy 
explained that he was now comfortable with understanding why the volume was 5-6%. LEK 
would help with how to manage that volume. 
•  Whether Management was setting stretch targets or real targets— Mr Healy explained that 
rehab performance targets had now been set lower; they had previously been set at 
stretch, as Treasury had pushed for higher targets. 
Page 8 of 21  



 
•  That these insights should be included in the Report, to explain the data and 
Management’s responses. 
•  Whether the data around levies should go to the Minister. The Board agreed that it was 
good for Treasury and the Minister to see this information.  
Mr Healy then reported on the deficit ACC was facing. He reported on discussions he had had with 
the Australian Transport Accident Commission (TAC) which was expecting a similar proportionate 
increase in deficit as ACC had experienced. TAC presented two funding ratios: an accounting 
funding ratio and economic funding ratio. The accounting funding ratio used the risk free rate to 
value liability, while economic funding used expected investment rate of return. The Board 
suggested that ACC not muddy the waters by reporting on two funding ratios, as this would add to 
the myth that the low discount rate environment was not a problem. 
Mr Healy reported on ACC’s investment in the government’s gun buyback scheme: $10 million was 
recorded in 2018/19 as a prepayment. This corresponded to how the Police had accounted for 
receiving the $10 million. In response to a Board a query, Mr Healy confirmed that the auditors had 
not indicated any concerns with the gun buyback funding. Mr Raubal explained the process that 
had been undertaken to determine the ROI. 
The Board requested that the additional unbudgeted expenditure that the Board had approved 
after the June 2019 Board meeting, be recorded in the notes to the Annual Report. 
RESOLVED: The ACC Board resolved to: 
Approve, subject to any final changes, the presentation of the fourth quarterly report 2018/19 to 
the Minister by 31 July 2019.  
  External Speaker 
 Michael Barnett, Chief Executive of the Auckland Business Chamber of 
Commerce 
The Board Chair welcomed Mr Barnett, who focused his presentation on the following: 
•  The Chamber and ACC shared the same constituency (businesses). 
•  Mr Barnett had recently focused on humanising the Chamber’s brand through community 
engagements and empathising with businesses.  
Page 9 of 21  

 
•  The Chamber’s work was now mostly focused on the community. Mr Barnett worked with 
MSD on youth unemployment. Under this partnership, around 1,000 youth a year are 
placed into employment. A joint Chamber and MSD programme was also underway for 
helping young people to pass their driver’s licence before leaving school. This helped 
develop their independence.   
•  The Chamber provided a powerful, independent voice for business to central and local 
government.  
•  Reflecting on his and Jock Hobb’s concurrent cancer diagnoses and the close relationship 
they developed through their treatment processes, Mr Barnett shared their key to a positive 
focus on life: change the things you can, and don’t talk about the things you’ve done, talk 
about where you’re going. 
In response to Board queries and comments Mr Barnett explained that: 
•  He was constantly alerted by business to things that are wrong, and ACC had not been 
mentioned to him. However, ACC could do more to communicate with businesses. ACC 
could humanise its brand, and have purposeful community engagements. 
•  The way to improve businesses’ trust and confidence in ACC was through storytelling. ACC 
could talk about the consequences of ACC’s ‘being there’, and choose the language. By 
way of example, Mr Barnett reflected on a recent meeting of Chambers in Paris. 
Participants were talking about certifications for exporters, and he had proposed talking 
about trade facilitation instead. 
•  ACC should find a champion to tell the outcome story. Having the story come from a third 
party was very powerful. He referred to ‘anchor bias’: whatever people have first heard is 
overwhelmingly the way they will think of ACC. It wil  take effort for ACC to shift that 
perception. 
•  ACC should sift its own data to find who would be a suitable third party to champion ACC. 
The Board agreed that there was a need for ACC to personalise its message, as people 
don’t remember statistics but they remember stories.  
The Board Chair thanked Mr Barnett and asked him to let her know if ACC came onto his radar. 
That kind of critical friendship would help ACC to achieve its transformation.  
Page 10 of 21  



 
  Board Papers 
 ACC Responses to Emerging Transport Technologies 
Ms Powell introduced the paper, noting some of the key pieces of work underway, including 
drafting a comprehensive e-scooter risk framework with Auckland Transport to assess where the 
greatest harm occurs. The Board Chair declared her interest in Auckland Transport.  
The Board’s discussion focused on the following:  
•  The Board’s disagreement with the paper’s comment on e-scooter use reducing the 
number of motor vehicle injuries and that care had to be taken to not discourage the uptake 
of new technologies. The Board indicated that ACC did want to encourage the uptake of e-
scooters and other alternative modes of transport, so long as they were safe. If they were 
not safe, then ACC should be able to sheet home the cost to the operators, as owners of 
the risk.  
•  Injury statistics from the United States showed that 40% of e-scooter injuries were head 
injuries, with 50% of those being traumatic brain injuries. Only one out of 190 persons 
injured was wearing a helmet, 39% of the injuries happened at night, and speed was a 
factor in almost all of the injuries. The Board suggested that ACC be proactive—the 
statistics indicated the solutions to make e-scooters dramatically safer. 
•  ACC should manage the problem before it became too serious. There were new industries 
forming all the time, and ACC should act quickly. For e-scooters there was already plenty of 
evidence of the problems; ACC should get ahead of them, and advocate for setting the 
rules early and applying ownership of risk. Risk rated levies should be used wherever there 
was a viable charging mechanism. ACC could also make e-scooters safer by ensuring 
helmets were worn, there was no night-riding, and the scooters operated at a lower speed. 
•  The injury data related to e-scooters could be published, including the impact of e-scooter 
injuries on the various accounts. This would create public pressure about ACC having to 
pay the costs.  
Mr Raubal noted that levies would not influence helmet-wearing, and that there were currently no 
legal mechanisms for levying e-scooters. The Board suggested that even asking for a law change 
would send a strong signal to the e-scooter companies.  
ACTION: Management to bring a refined e-scooter levying paper to a future Board meeting. 
Page 11 of 21  


 
RESOLVED: The ACC Board resolved to: 
(a)  Note that e-scooter injuries to date have been low in number and cost relative to other forms 
of transport, though some injuries have been serious. 
(b)  Note that Management has investigated a range of options for levying e-scooters, and that 
the changes required to achieve this are unlikely to be applicable to e-scooters in isolation 
from other devices or activities. 
(c)  Note that changing patterns of transport use and safety risks raise questions about whether 
ACC’s levying framework and/or Accounts remain fit for purpose. 
(d)  Note that Management is undertaking a range of injury prevention activities in partnership 
with Auckland Transport, the Australasian Injury Prevention Network, and transport 
regulatory agencies to influence decision-making on e-scooter and pedestrian safety. 
 OCL Valuation Report 
Mr Raubal introduced 9(2)(a)
 of Taylor Fry to the Board, and together they took the Board 
through the presentation. Board discussion focused on the following:  
•  The movement in Non-serious injury Social rehabilitation. Mr Raubal explained that the 
drivers were a combination of capital and care costs.  
•  Sensitive claims. Mr Raubal explained that the volume of sensitive claims towards the end 
of 2018 had flattened, resulting in a small increase in sensitive claims volumes being 
assumed, and this had turned out to be a poor assumption. The integrated services 
strategy review for sensitive claims was underway now, and the contract was to be 
renewed next year. The Board asked that the OCL impacts be highlighted in the paper to 
the Board.  
•  Medical inflation for elective surgery. The Board noted that medical inflation was higher 
than 2% for the DHBs. Mr Raubal explained that, although it was unclear why, medical 
inflation was not higher than 2% for ACC; he had initially resisted reducing superimposed 
inflation, but it had been at lower levels for a consistent period.  
•  Physiotherapists. 9(2)(a)
 explained that physio was quite small, from a liability 
perspective, as most treatment occurs in the first few months after an accident.   
RESOLVED: The ACC Board resolved to: 
Page 12 of 21  



 
Note the Report from Taylor Fry. 
 Annual Legislative Compliance Report 
Mr Raubal introduced the paper noting that ACC’s compliance processes were improving. The 
number of compliance exceptions was low for an organisation of ACC’s size and complexity. The 
main concern was that there were nine Acts where compliance could not be verified, including two 
with a Very High inherent risk. Mr Raubal confirmed that these would be prioritised over the 
coming period.  
The RAAC Chair asked that a recommendation be added to note that there was nothing identified 
in the Report that warranted disclosure in the accounts, including the note on contingencies.  
The Board queried the Acts where compliance was unable to be verified and sought assurance 
that Management would be able to do this in 2019/20. This would be added to the RAAC agenda 
for follow up in November 2019.  
RESOLVED: The ACC Board resolved to: 
(a) 
Note the FY19 Annual Legislative Compliance Report. 
(b) 
Note that the Chiefs’ FY20 entity-level risk key performance indicator includes expectations 
regarding risk and obligation ownership in addition to the facilitation of effective key control 
testing in each Business Group. 
(c) 
Note that as the tariff for ACC’s non-compliance with the Public Records Act 2005 is 
relatively minor and the potential for reputational issues is relatively moderate, the 
Executive owner of this excerption should re-assess the risk rating or give focus to 
remediation commensurate with the high-risk rating. 
(d) 
Note no non-compliances required disclosure in the financial accounts or the contingencies 
note.  
 Annual Report 
Mr Healy introduced the Annual Report. Regarding the OBEGAL view of the financial statements, 
Mr Healy reminded the Board that since 2011 the publicly available monthly performance reporting 
had split out economic factors and investment returns. He confirmed to the Board that, from an 
accounting perspective, either version was acceptable to the auditors. In response to a Board 
query, Mr Healy suggested that presenting the OBEGAL view was appropriate, as it would help the 
reader to better understand the drivers of the poor result. 
Page 13 of 21  


 
The Board conveyed that the Report was not yet ready to send to external agencies. Mr Healy 
explained that the timeline had been brought forward this year because the Crown accounts were 
to be released on 9 October, and Management hoped to release the Annual Report before the 
Crown accounts. The Board suggested that more polished messaging and accounts in the draft 
would make the external agencies’ job easier. The Board expressed the view that it was not 
problematic to have the Crown accounts announced first. Board Members would send their 
comments on the draft Annual Report directly to Mr Healy.  
The Board discussed how best to approach the financials reporting—timing was very important 
when changing accounting presentation, and there needed to be a defensible reason. The choice 
was to leave the change to another year, or to use this year to transition to the OBEGAL 
presentation by including both versions of the income statement this year. The Board decided that 
a reconciliation should be included this year from the existing presentation to an OBEGAL 
presentation.  
RESOLVED: The ACC Board resolved to: 
(a) 
Provide feedback on the first draft of the Annual Report 2019 (Appendix 3) and the 
provisional Financial Statements (Appendix 4). 
(b) 
Note the proposed timeline for AR19 (Appendix 2). 
(c) 
Note the new proposed changes to the presentation of the Financial Statement to be 
included in AR19 and the alternative presentation, aligning with the Crown’s Financial 
Statements (Appendix 1). 
 Air Ambulance (Helicopter) Update and Funding Request 
The Board noted a recently reported incident where only one air ambulance had been available for 
the whole of Northland and Auckland. 9(2)(j)
 
. He explained the arrangements that had been made to help with 
coverage, and the issues underlying the incident. He explained that this was the type of issue that 
Phase 1 of the Air Ambulance project had been trying to address. The Board noted the 
seriousness of the issue, and encouraged 9(2)(a)
 to escalate to the Board if necessary. 
9(2)(a)
 summarised the key points from the paper:   
Page 14 of 21  


 
•  Phase 1 of the project had focused on moving to a professional service, removing the single 
engine helicopters, reducing the number of suppliers, setting up an air desk to coordinate 
activity, implementing a national governance framework and data collection.  
•  Stil  outstanding in Phase 1 was completing the negotiation with the South Island providers. 
Costs were higher because the providers had brought on extra staff, and the flying hours were 
well above the estimates. The costs had now been updated and were comparable with the 
providers in other regions. 9(2)(j)
 
.  
The Board congratulated 9(2)(a)
 on the good work in consolidating the providers. Standardisation 
of equipment and aircraft was the goal.  
RESOLVED: The ACC Board resolved to: 
(a) 
Note that in July 2018 the Board approved entering into agreements with the preferred air 
ambulance providers, and delegated to the Chair and Deputy-Chair the authority to approve 
the Recommendation to Select. 
(b) 
Note that the Board Chair and Deputy Chair approved the selection of HEMS as the 
preferred provider in the Southern region in December 2018. 
(c) 
Note that at the time of approval, costs had only been agreed for year 1 of the contract, 
while out years (2-4) were subject to continued negotiation. 
(d) 
Note that verbal agreement on costs has now been reached on years 2-4 of the contract 
and these exceed budget amounts. 
(e) 
9(2)(j)

(f) 
Note the future work for Phase 2. 
 Insurance Update 
Mr Pickering declared his interest as a director of Chubb Ltd. 
Mr Healy reported that the Board would now be updated yearly, at the RAAC Chair’s suggestion. 
Mr Healy highlighted the following:  
Page 15 of 21  

 
•  There were cluster arrangements for cross-government property insurance and business 
interruption insurance.  
•  There would be a refresh of business interruption insurance over the next few months.  
•  Most of the policies had an additional cost associated, particularly D&O. 
•  Some terms had changed, but Mr Healy was stil  comfortable with the level of cover. 
•  The overall cost had increased by more than 10% from last year.  
The Board asked that annual updates come to the Board before the renewal decision. Mr Healy 
would make the level of self-insurance explicit in the updates.  
9(2)(h)
 
 
 
 
 
  
The Board discussed whether ACC should fully self-insure. Mr Pickering proposed a ground up 
review of ACC’s insurance. The Board agreed, asking that an independent reviewer be used, and 
that the review be completed before the next insurance renewal process. 
ACTION: Management to implement an independent third-party review of ACC’s insurance needs, 
including consideration of self-insurance and level of cover, prior to the next renewal process.  
RESOLVED: The ACC Board resolved to: 
Insurance Policies 
a) 
Note ACC’s insurance cover as summarised in Appendix 1. 
b) 
Note specific areas of considerations during the renewal process. 
Deed of Indemnity 
c) 
Note a Deed of Indemnity provides protection for a Board Member or independent Board 
Committee Member in addition to ACC’s D&O insurance cover and to the statutory 
protections and immunity from liability provided under sections 120 and 121 of the Crown 
Entities Act 2004.  
Page 16 of 21  



 
d) 
Note ACC’s Deed relating to Indemnity, Access and Insurance was externally reviewed and 
updated in July 2019 to ensure it is fit for purpose. 
e)  9(2)(h)
 
    
  
f) 
Agree that the Deed be amended to remove clause 2.2. 
g) 
Agree that all Board Members and independent Board Committee Members sign the 
updated Deed relating to Indemnity, Access and Insurance (the updated Deed).  
h) 
Delegate authority:  
i.  To the Board Chair and one other Member to sign the updated Deed on behalf of the 
Board for each Board Member and independent Board Committee Member, except 
themselves;  
ii. 
To the Temporary Deputy Chair and Chair of the Risk Assurance and Audit 
Committee (RAAC) to sign the updated Deed on behalf of the Board for the Board 
Chair; 
iii.  To the Chair of the RAAC and the Temporary Deputy Chair to sign the updated Deed 
on behalf of the Board for the other Member referred to in Resolution h) i.  
i) 
Delegate on-going authority to the Board Chair and the Deputy Chair (or Temporary Deputy 
Chair if no Deputy Chair has been appointed) to sign the updated Deed on behalf of the 
Board in respect of future Board Members or independent Board Committee Members who 
may be appointed to or by the Board. 
  Performance Reports 
 Health, Safety and Wellbeing Report 
The Board received and noted the Report.  
RESOLVED: The ACC Board resolved to: 
(a) 
Note actions underway to mature our safety system, demonstrate safety leadership and 
strengthen our safety culture.  
(b) 
Note there was one notifiable events in June 2019. 
(c) 
Note the health and safety performance indicators. 
Page 17 of 21  


 
 Legal Report and Policy Update 
(a) 
Legal Report – LEGALLY PRIVILEGED 
The General Counsel introduced the report, focusing on the fol owing: 
•  The wider implications from the Calver judgment: 
o  The Board needed to decide whether to seek leave to appeal the decision. 9(2)(h)
 
 
The Board agreed that the case was tragic, but noted that ACC needed to 
apply the Scheme according to the law. The application should be filed, subject to 
Ms McDonald QC also agreeing that this was the right course of action. 
o  The Board needed to decide how ACC should deal with the claims that may be 
received before the appeal decision. 9(2)(h)
 
 
 
 
 
 The Board agreed, 
subject to Ms McDonald QC’s view, that claims received before a decision from the 
Court of Appeal were to be treated consistently with the approach in Ng, and that 
impairment assessments should be undertaken as early as possible, including for 
current survivors whose claims had previously been declined.  
•  The OCL and new year cost implications of the Ng ‘ordinary consequences’ case: The impact 
had now been assessed and was large. The General Counsel emphasised that it was likely 
that the number would be even larger than in the assessment, as claimant behaviour could not 
be predicated.  
•  The Larkin case, which would be heard in the High Court in August 2019.  
RESOLVED: The ACC Board resolved to: 
(a) 
Note that on 8 July 2019 the High Court in the case of Calver v ACC issued a decision that 
expands on the scheme boundaries of cover for disease by granting cover for 
Page 18 of 21  

 
mesothelioma caused by non-work asbestos exposure, creating the potential for cover for 
other non-idiopathic diseases and: 
i.  9(2)(h)
 
 
 
ii.  9(2)(h)

iii. An application for leave to appeal the decision would need to be filed by Friday 2 August 
2019. 
(b) 
Approve that ACC wil  seek leave to appeal the decision in Calver v ACC, subject to 
Ms Mcdonald QC agreeing that approach. 
(c) 
Note that on 15 August 2019 the High Court wil  hear an appeal in the case of Hoare 
(Larkin) v ACC
 that may set a precedent in relation to the transitional provisions applicable 
to the payment of backdated attendant care, with significant financial implications. 
(d) 
Note in relation to the ACC v Ng ‘ordinary consequences’ Test Case that: 
i.  The Outstanding Claims Liability impact is very difficult to assess. Based on the 
information currently available, it is estimated to be in a range of $399m to $563m for 
claims based on treatment first sought on or before 30 June 2019, and the new year cost 
impact for claims based on treatment first sought after 30 June 2019 is assessed as a 
range of $548m to $573m per year. However, because of the high level of uncertainty, it 
is possible the actual impact is significantly more than indicated by these ranges. 
ii.  Management has considered exploring legislative change but is not currently 
progressing this work because, while a legislative change would contribute to certainty 
and cost containment, it is difficult to develop feasible options before the Court of Appeal 
has ruled on the matter (unlikely to be before the first quarter of the 2020 calendar year). 
iii. Management wil  inform Treasury and the Minister for ACC of the financial impact 
assessment and the status of Management’s exploration of legislative change. 
(b) 
Policy Update 
The Board received and noted the Report.  
Page 19 of 21  






 
RESOLVED: The ACC Board resolved to: 
(a) 
Note that ACC is working with the Ministry of Health and National Ambulance Sector Office 
to provide the Government with four Cabinet papers over the next eight months, on the 
funding and future direction of ambulance services. 
(b) 
Note that the Minister for ACC wil  receive a report on exploring ‘machine consumable’ 
legislation, and ACC wil  seek his agreement that the report is made publicly available 
alongside other cross-government reports. 
(c) 
Note that ACC is engaged with cross-government work led by the Ministry of Health in 
response to the He Ara Oranga: Report of the Government Inquiry into Mental Health and 
Addiction. 
(d) 
Note that ACC wil  be consulted in August 2019 on a draft national strategy for eliminating 
family violence, sexual violence and violence within whānau. 
(e) 
Note that the Scheme Customer Advisory Panel continues to work with ACC and the 
Ministry of Business, Innovation and Employment to progress a work programme for 
2019/20 that includes contributing to initiatives already underway or under development by 
ACC (including enhancing the Accredited Employers Programme and ACC’s Health 
Outcomes Framework). 
  Board Administration 
 Minutes of Meeting held on 27 June 2019 
APPROVED: the ACC Board approved the minutes of the meeting held on 27 June 2019.  
 Schedule of Matters Arising  
The Board noted the Schedule of Matters Arising. 
 Confirmation of Decisions Made Out of Cycle 
RESOLVED: the ACC Board resolved to: 
Note that there were no decisions made out of cycle for the period of 20 June 2019 to 17 July 
2019. 
 Annual Work Programme 
Page 20 of 21  



 
NOTED: The ACC Board noted the annual work programme. 
  General Business 
As it was Ms Murphy’s last ACC meeting, the Board Chair formally thanked her for her services to 
the ACC Board, noting that she had made a very significant contribution.  
  Confirmation of Next Meeting 
To be held at the ACC Boardroom, Level 11, PwC Tower, 188 Quay Street, Auckland on Thursday, 
29 August 2019 at 9.00 am. 
Closure 
The meeting closed at 3.45 pm. 
Approved 
 
 
Chair …………………………………………………………. 
Date ……………………………… 
Page 21 of 21