GMHBA AnnuAL RepoRt 2010 - GMHBA Health Insurance

GMHBA Limited ABN 98 004 417 092
GMHBA Limited ABN 98 004 417 092
Notes to the Financial Statements for the year ended 30 June 2010 (continued)
9. Provisions
Current
41
2010
$’000
2009
$’000
Outstanding claims 14,177 12,755
Risk margin 2,419 2,166
16,596 14,921
Connect Reward benefits 13,340 14,351
Employee annual leave 600 534
Employee long service leave 298 279
30,834 30,085
Non-current
Employee long service leave 129 103
129 103
The reconciliation of the provisions are as follows:
Outstanding claims including risk margin
Balance at beginning of year 14,921 12,202
Add claims incurred 183,423 161,125
Less claims paid (181,748 ) (158,406)
Net outstanding claims liability 16,596 14,921
Benefits paid to fund members
Gross Claims - undiscounted
Current 188,858 159,213
Prior (371 ) 1,601
Total benefits paid 188,487 160,814
Current year claims relate to claim events that occurred in the current financial year. Prior year
claims relate to a reassessment of the claim events that occurred in all previous financial periods.
A major component of the prior year movement is the release of risk margins in respect of claims
payments settled during the year. In order to maintain strong reserves, much of this release is
transferred to current reserves for which the development of claims is less mature and there is
much greater uncertainty attaching to the ultimate cost of claims.
Insurance contracts
Insurance contracts are defined as those containing significant insurance risk at the inception of
the contract or those where at the inception of the contract there is a scenario with commercial
substance where the level of insurance risk may be significant over time. The significance of
insurance risk is dependant on both the probability of an insurance event and the magnitude of its
potential effect.
41