The Labour Party says ACC needs independent oversight after it was revealed the insurer was using a secret risk model to profile and target clients.

It also says the corporation should have consulted the Privacy Commissioner about the use of public data.

However, the ACC minister says it is not a privacy issue and it would be "irresponsible" not to use past client experiences to inform its future decisions.

A Herald investigation today revealed ACC built the tool using private information from thousands of claimants, with no public oversight or transparency, in breach of data guidelines.

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It was unclear what testing had been done on the model's algorithm, leading to concerns about bias and potential discrimination - for example the risk of the algorithm treating similar injury claims differently depending on a person's ethnicity or gender.

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Labour leader Jacinda Ardern said better transparency was needed. She also said it would have been "wise" for ACC go to the Privacy Commissioner with the project, which did not happen.

She said she was concerned about the track the National Government had taken with ACC.

"I think all of it has been in an effort to reduce services, and more and more targeting to deprive people of the services they could benefit from," Ardern said.

She believed ACC needed independent oversight, but did not describe what that might look like. Advocacy group Acclaim Otago and the Green Party believe it needs an independent commissioner.

"It would be irresponsible of ACC not to use this experience" - Minister

However ACC Minister Michael Woodhouse said ACC had been using the experiences of injured people's rehabilitation needs to inform and provide service to future clients since it began.

"It would be irresponsible of ACC not to use this experience," he said.

"I strongly reject the inference that this is some sort of privacy issue. The information that is being used is completely anonymised and is only used by ACC staff to help inform future advice or support."

The minister used the case of an injured builder with a sprained wrist as an example, saying modelling prior claim experience let them know that person would be expected to be back at work within six to eight weeks, and may need physio, help around the home and transport assistance.

But someone who works in an office would likely need less time off work.

He did not describe what other characteristics would be used in the model, however, such as gender or ethnicity. ACC previously said age was one factor.

Woodhouse said using information based on previous claims to inform future care was "no different" than a doctor advising a patient of possible treatment paths based on their diagnosis and past experience.

He said he was well aware ACC used modelling.

Calls for an independent commissioner

Earlier, Acclaim Otago had said the disregard for privacy and transparency added weight to its campaign for a Personal Injury Commissioner. That role would provide independent monitoring, advice and would be accountable for the system.

The idea of a commissioner was also suggested this year after research found hundreds of thousands of injured Kiwis were declined cover each year by ACC, causing "unacceptable harm" to many legitimate claimants.

Acclaim said ACC is an incredibly complex system, but has only limited guidance on how it should act from the Accident Compensation Act, and is therefore vulnerable to political interference.

Acclaim also argues that ACC is spending more resources disputing claims, which minimises the amount it pays in entitlements.

"There is a real risk now that people are falling through the cracks and resources are being duplicated unnecessarily," spokesman Warren Forster argued.

He said a commissioner would be responsible for an advocacy service to help people through the maze. They would also enhance transparency, and provide coherent advice on the operation of the whole personal injury system.

"It's important with this kind of modelling that it's open to scrutiny"

The Green Party says it would support the idea of a commissioner. Health spokesman Julie Ann Genter said an independent watchdog was needed.

She said the way ACC was using data without transparency was a worry.

"I think a person using ACC has the right to know what information they have about them and how they are making decisions," Genter said.

"It's important with this kind of modelling that it's open to scrutiny and that it's transparent so can we avoid bias."

She said she wanted to know if the minister knew the agency was using data in this way, and if he gave sign off.

Genter said the Green Party supported a commissioner because it was clear that there were systemic issues around people accessing their entitlements, particularly when cases are disputed.

ACC says the model, which is a form of predictive analytics, is used to predict the duration a client will need care.

It assesses which claimants will need more help and which kind of case manager they need. Staff are then able to see the predicted duration and can contact clients when their recovery is not progressing as predicted.

ACC has not released how the model works, only saying it includes factors like age, the injury site and any delay in claim. It would not answer questions about oversight and ethics.

The Herald has asked the minister to release details of the model, and what consent was given for the information to be used.