The chief executive of the NSW government's troubled insurer icare has quit after it emerged he was stripped of a bonus for failing to properly declare his wife had been given a contract with the agency.
John Nagle resigned late on Monday night after appearing before a sensational NSW upper house inquiry earlier in the day.
Mr Nagle and four icare senior officials were grilled for almost three hours about alleged mismanagement and underperformance, poor governance and conflict of interest issues.
Icare CEO John Nagle was sanctioned by the board in 2019. Credit:James Brickwood
In a statement on Monday night, NSW Treasurer Dominic Perrottet said the chair of icare's board, Michael Carapiet, had told him of Mr Nagle's decision to resign.
"I understand Mr Nagle has informed the board that his decision to leave icare was a difficult one, but he felt the ongoing focus on a range of issues concerning the organisation was adversely impacting the important role it plays in administering the workers’ compensation scheme in NSW," Mr Perrottet said.
Mr Nagle told the parliamentary inquiry that he initially considered resigning from icare after he was formally sanctioned by the board in June 2019 but was convinced to stay on by Mr Carapiet.
Mr Nagle was also asked about his failure to declare, in the agency's annual report, business-class flights to Las Vegas to speak at a conference organised by software company Guidewire in October 2018.
The inquiry heard Guidewire has received millions of dollars in contracts from icare to provide claims management software. Mr Nagle appears in a promotional video for Guidewire on the company's website.
The inquiry comes after a joint investigation by The Sydney Morning Herald, The Age and ABC's Four Corners, which revealed icare had underpaid as many as 52,000 injured workers by up to $80 million in compensation.
Icare has disputed these figures, saying its initial estimates have been revised down significantly and it estimates 5000 to 10,000 workers have been underpaid up to $10 million in total.
The investigation also found that executive remuneration had soared since icare's creation in 2015, with a 22-fold increase in the number of executives who earned an average salary of $300,000. The salaries of the seven top executives average around $660,000.
Mr Nagle told the inquiry he was the subject of an internal complaint about his wife's role, after she was hired on a contract to work on a training project for Nominal Insurer, the agency's key workers compensation scheme, which reported to him.
He gave evidence that he had "no idea" of the monetary value of his wife's contract, and could not recall the exact date her employment commenced, nominating "either late 2016 or 2017".
He said he disclosed the conflict to the then-chief executive and the chief legal officer at the time, and said steps were taken to ensure his wife did not report directly to him. But he said he was later stripped of his bonus for the 2018-19 year by the board over his handling of the issue.
"The board found that the disclosure should have been clearer," Mr Nagle said.
Icare CEO John Nagle runs the NSW workers’ compensation scheme.Credit:Jessica Hromas
"The board counselled me on the need to ensure there cannot be any conflicts like that."
Mr Nagle said he contemplated resigning but decided against it, saying "the chair asked me to reconsider."
"He (Mr Carapiet) expressed the board's disappointment. He expressed the support of the board for me to carry on."
Mr Nagle also told the inquiry he did not know what his salary was last year, and instead opted to take the question on notice, saying: "I don't have that information in front of me."
Icare's group executives, Elizabeth Uehling, Andrew Ziolkowski, Rashi Bansal and the agency's chief actuary Dai Liu also opted to take questions about their salaries on notice.
During a tense exchange at the inquiry, Labor MLC Daniel Mookhey asked Mr Nagle whether he was concerned that his dealings with software firm Guidewire created "the impression of impropriety, if not impropriety".
"I don't believe it is improper at all. I can understand the perception argument but I find that quite weak as well," Mr Nagle responded.
The inquiry also heard from Carmel Donnelly, chief executive of the State Insurance Regulatory Authority (SIRA), which has oversight of icare, who said she continued to have "grave concerns" about the agency's functioning.
Asked whether icare had a plan to repay the injured workers whose claims had been miscalculated, Ms Donnelly said: "Not [one] that I'm confident or satisfied with."
She also confirmed the agency was actively investigating whether icare had paid more than $20 million in fees to brokers in breach of the Workers Compensation Act.
The inquiry will resume later this month, when it is expected icare's board will be called to give evidence.
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