In the last bulletin from the Motorcycling Australia (MA) Alliance, we outlined the three main strategic projects of the MA Alliance and posed a series of questions about what the MA organisation should look like in the future. In this bulletin, we report the progress we are making on designing a new financial model.
The financial model working group met recently to outline the options to put to a face-to-face meeting of the Alliance Leadership Team on 1 April 2019.
The starting point for the financial model working group is obviously the non-negotiable objective of robustly financing the $3.3m total of insurance premiums for the three heads of insurance that makes our sport possible and allows your club to operate without fear of financial catastrophe caused by an event that would be otherwise uninsured. The three heads of insurance are the following:
- Associations insurance that covers your club for all of the following eventualities:
- Director and officer insurance to ensure that no club committee member, or board member of any of our constituent entitles, suffers any financial liability for any decision that makes them liable to 3rd parties.
- Professional indemnity insurance to cover clubs and State Controlling Body’s (SCB) for liability arising out of advice or directions given by any member of a club or the board of an SCB.
- Associations liability cover for the costs of defending claims made against your club.
- Employee fraud or dishonesty insurance to cover the losses caused by fraudulent conduct of any member having control of, or access to money of the club or the SCB.
- Employment practices liability insurance to cover claims for unfair dismissal, discrimination, bullying etc.
- Public liability insurance that covers every club, SCB and MA against the costs of claims made for injury or other damage caused by the negligence of any MA member.
- Personal accident insurance to assist with the medical and other expenses incurred by any of our licence holders at any permitted event.
Without this network of insurance cover, largely covered by our captive insurer, MA Insurance Limited (MAIL) with excess layers covered by the London Market, your club could operate only until it incurred liability it could not afford to pay. Even if your club is not legally liable, few clubs could afford to pay the legal costs of defence to formally prove that your club is not liable. And, apart from giving evidence on which the relevant defence must be based, any such claims are entirely managed and paid for by MAIL, its claims agent Pro Claim and MA employees meaning that the time and anxiety invested by clubs and their members is kept to an absolute minimum.
Paying for insurance
Since the establishment of MAIL in 2002, it has been the case that the nexus between the cost of this insurance and the costs your club pays to its SCB or MA have been opaque at best. Until now, MA would simply send invoices to your SCB for premium costs and that SCB had a great deal of autonomy as to how it financed the payment of that invoice.
The new financial model will be designed to make it clear to every member what you are paying for in respect insurance for event permits, licences and levies and will be collected centrally through RiderNet. It will also be designed to minimise the insurance costs to our members, whilst ensuring excellent cover for all our clubs and participants and that MAIL continues to be financially robust.
Several options will be presented to the ALT on 1 April 2019 after which the members of the ALT will consult their respective boards and a final position will be determined by the ALT as soon as possible after that. Then, we will be announcing the details of the new financial model shortly after that ALT determination.
The new financial model will come into operation 1 January 2020.
No financial reform will be possible without all our membership operating on RiderNet. Licencing is pretty much now all operating on RiderNet. So, we have until 31 December 2019 to ensure all our clubs are managing membership and events on RiderNet. Therefore, the next of these bulletins will deal in a bit more detail why RiderNet is crucial to the health and continuing viability of the MA community.