NSW icare HBCF Eligibility Manual update

We would like you to be aware that icare have updated the HBCF Eligibility Manual (EM) v11.1 which came into effect on 1 March 2023, replacing the previous EM v11.0.

Please take time to review the updated manual to understand the changes and what they mean for you. Click below to review the new manual.

We have highlighted the key changes below for you. This is not an exhaustive summary and we encourage you to review the full updated manual yourself.

Assisting builders impacted by disruptions in the NSW residential construction market

The NSW residential construction market has been subject to unusual disruptions resulting from the pandemic. These disruptions include (but are not limited to) increases in material costs and labour shortages.

As a result of these circumstances, which are largely out of builders’ hands, some builders may struggle to meet icare HBCF’s financial requirements for ongoing Eligibility.

To assist, icare are allowing builders suffering from these issues to hold provisional Eligibility in two broad situations:

• Section 18.2: Eligibility is maintained while a builder recovers their financial position after experiencing adverse conditions or events
• Section 18.3: Eligibility is maintained while a builder makes an orderly exit from the NSW residential construction market.

Builders seeking to obtain provisional Eligibility under the above EM sections during an eligibility assessment will need to:

• Submit a credible, written proposal that clearly addresses the relevant EM section criteria for an underwriter to review.
• Demonstrate that their inability to meet icare HBCF’s financial requirements for Eligibility is not the result of actions within their control.

Note: builders who meet the criteria will:

• Not be able to increase their approved Open Job Limits
• Be subject to increased eligibility assessment frequency.
• Have their Open Job Limits restricted to utilisation levels while the proposal is assessed.
• Require their proposal to ultimately be approved by either:
  • Head of HBCF Underwriting (section 18.2)
  • General Manager (IfNSW and HBCF Underwriting) (section 18.3)
• Have information about their provisional Eligibility reported to the State Insurance Regulatory Authority (SIRA)

Provisional Eligibility is provided at icare HBCF’s sole discretion. icare HBCF can place further restrictions, suspend or cancel a builder’s eligibility during this period in accordance with the EM.

Typical (though not exhaustive) situations where icare may decline Provisional Eligibility proposals include:

• Builders whose inability to meet financial requirements for Eligibility is assessed to be due to Adjusted Net Tangible Assets (ANTA) being distributed to related parties.
• Builders who rely on undertaking more work via increased Open Job Limits.
• Seeking to maintain existing Open Job Limits after an Automated (Builder) Scorecard Review (ASR) has resulted in an Eligibility Score that requires Open Job Limits to be reduced.
• Evidence of payment default(s), court action(s) and/or other mercantile issues.

Additional changes to the updated Eligibility Manual

The v11.1 EM also includes a new Unacceptable Risk scenario (scenario 4a in section 9.1) concerning the suspension or cancelation of a contractor licence, or supervisor/trade certificate, within the last five years for any reason other than a failure to pay fees.

To review the updated manual, click below