Insurance – Follow Up

Background

A key tool for the mitigation of risks faced by an organisation is the use of insurance. The States of Jersey use both external insurance and self-insurance by way of an Insurance Fund to mitigate risk. The insurance function is administered by a small team supported by external brokers and advisors.

In April 2020, the C&AG issued a Report, Insurance, on the arrangements in place at that point. The report considered the Government’s approach to:

• ensuring effective arrangements for governance and oversight
• identifying and quantifying risks that might have financial consequences
• developing a clear policy for insurance and self-insurance; and
• ensuring appropriate arrangements to identify and manage insurance claims.

The Report contained 15 recommendations.

At 31 March 2025 the Government of Jersey’s Recommendations Tracker recorded that all recommendations had been closed.

In the 2024 Annual Report of Findings, the C&AG noted that 11 recommendations relating to the 2020 Report on insurance had been combined into a single action relating to the update and implementation of a revised insurance strategy and action plan. The single action plan for insurance was provided to the C&AG in March 2025.

For self-insurance purposes the States operate an Insurance Fund. This facilitates the provision of mutual insurance arrangements for:

• States Bodies
• any fund or money for which an Accountable Officer is appointed; and
• any other bodies and persons that the Minister for Treasury and Resources may agree.

The Insurance Fund is funded from the Consolidated Fund with amounts as decided in the Government Plan, recharged to bodies or persons that participate in the mutual insurance arrangements, and received from settlements in insurable claims.

For external insurance the States contract with insurance brokers and insurers to obtain insurance cover from the commercial insurance markets. Cover falls into two main areas: General Insurance (property and business interruption insurance, liability insurance and motor insurance) and specialist Medical Malpractice cover.

Scope

This audit will follow up on the 2020 report and recommendations. In the context of current insurance risks and opportunities, it will assess:

• the progress made in implementing agreed recommendations from the 2020 Report
• the extent to which the recommendations as implemented have addressed the improvement areas identified in the Report; and
• the adequacy of plans for the implementation of any outstanding recommendations.

In doing so, the follow up audit will evaluate:

• the effectiveness of the States’ overall policy and strategy for the identification, quantification, oversight and management of insurance risks and cover
• the effectiveness of the response to potential additional claims, including to mitigate future risk; and
• the effectiveness of policy and strategy in optimising insurance arrangements for:
  • a sample of self-insurance plans; and
  • a sample of external insurance plans, in relation to both general insurance and medical malpractice.

The review will not extend to:

• a follow up of the recommendations made in the previous C&AG reports on risk management
• the detailed insurance arrangements in place within controlled entities; and
• the operation of the Health Insurance Fund: a review of the Health Insurance Fund is in the C&AG’s Audit Plan for 2025.