Appendix 1: Information we sought from our auditors about insurance
To gather information on insurance of assets by public entities, we prepared a questionnaire for our auditors to complete for many public entities with more than $100,000 of assets. The questionnaire was set out as follows:
1. Name of entity
2. The carrying value of assets as at the 2012 balance date
3. Do all types of assets have some level of insurance cover?
4. Select the types of assets that have no insurance cover:
Land (including parks and reserves)
Landfill
Buildings
Transport infrastructure (including road, rail, ports, and airports)
Stormwater and flood protection systems
Water supply systems
Wastewater and sewerage systems
Electricity generation and distribution systems
IT and other specialist equipment
Cultural and heritage collections
Specialist defence assets
Motor vehicles
Other
5. Why does the entity have no insurance cover for these types of assets?
The entity has tried but is unable to get insurance
The cost of insurance exceeds the entity's assessed risk
The entity has the capacity to borrow to fund any loss or damage
The entity has sufficient available funds to repair or replace those assets
The Government has agreed to fund any loss or damage to those assets
Other
We asked the following questions for up to three of the main insurance policies:
6. Name of insurer
7. Period of the insurance policy
8. Select the types of assets covered by this insurance policy:
Land (including parks and reserves)
Landfill
Buildings
Transport infrastructure (including road, rail, ports, and airports)
Stormwater and flood protection systems
Water supply systems
Wastewater and sewerage systems
Electricity generation and distribution systems
IT and other specialist equipment
Cultural and heritage collections
Specialist defence assets
Motor vehicles
Other
9. Sum insured value of assets
10. Amount of insurance premium
11. Amount of excess
12. Carrying value of the assets covered by the insurance policy as at the 2012 balance date.
13. If the 2012 sum insured value of these assets is less than the 2012 carrying value, how is the uninsured risk being managed?
The entity has the capacity to borrow funds to manage the risk
The entity has sufficient investments it could realise to manage the risk
The Government has agreed to provide funding to cover the risk
Other
Not applicable: the 2012 sum insured value is greater than the 2012 carrying value
14. When comparing insurance information from the 2012 financial year to the 2011 financial year, which of the following apply?
There was a significant increase in insurance premium by ………%
There was a significant increase in insurance excess by ……..%
There were broad policy exclusions in the 2012 insurance policy that were not in the 2011 policy. These were ………..
None of these apply
15. Which of the following does the entity expect to affect its insurance of these assets during the 2013 financial year?
The entity does not expect any significant changes
The entity expects to self-insure against the loss or damage of these assets
The entity expects a significant increase in insurance premium
The entity expects a significant increase in insurance excess
The entity expects more policy exclusions to be added to the insurance policy
None of these apply
16. Are there any features of the entity's insurance arrangements that could make it suitable for a case study?
page top