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This is a Bill, not an Act. For current law, see the Acts databases.
2002-2003-2004
The Parliament
of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
As read a third
time
Medical
Indemnity Legislation Amendment (Run-off Cover Indemnity and Other Measures)
Bill 2004
No. ,
2004
A Bill for an Act to
amend the Medical Indemnity Act 2002 and the Medical Indemnity
(Prudential Supervision and Product Standards) Act 2003, to repeal the
Medical Indemnity (Enhanced UMP Indemnity) Contribution Act 2002, and for
related purposes
Contents
Medical Indemnity Act
2002 4
Medical Indemnity (Prudential Supervision and Product Standards) Act
2003 29
Health Insurance Act
1973 30
Health Insurance Commission Act
1973 30
Medical Indemnity Act
2002 30
National Health Act
1953 34
Medical Indemnity (Prudential Supervision and Product Standards) Act
2003 35
Medical Indemnity Act
2002 46
Medical Indemnity (Enhanced UMP Indemnity) Contribution Act
2002 50
Medical Indemnity Act
2002 51
Medical Indemnity (Prudential Supervision and Product Standards) Act
2003 52
Medical Indemnity (Prudential Supervision and Product Standards)
Regulations
2003 52
THIS Bill originated in the House of Representatives; and,
having this day passed, is now ready for presentation to the Senate for its
concurrence.
I.C. HARRIS
Clerk
of the House of Representatives
House of Representatives
26 May
2004
A Bill for an Act to amend the Medical Indemnity Act
2002 and the Medical Indemnity (Prudential Supervision and Product
Standards) Act 2003, to repeal the Medical Indemnity (Enhanced UMP
Indemnity) Contribution Act 2002, and for related
purposes
The Parliament of Australia enacts:
This Act may be cited as the Medical Indemnity Legislation Amendment
(Run-off Cover Indemnity and Other Measures) Act 2004.
(1) Each provision of this Act specified in column 1 of the table
commences, or is taken to have commenced, in accordance with column 2 of the
table. Any other statement in column 2 has effect according to its
terms.
|
Commencement information |
||
|---|---|---|
|
Column 1 |
Column 2 |
Column 3 |
|
Provision(s) |
Commencement |
Date/Details |
|
1. Sections 1 to 3 and anything in this Act not elsewhere covered by
this table |
|
|
|
2. Schedule 1, items 1 to 24 |
1 July 2004. |
1 July 2004 |
|
3. Schedule 1, items 25 to 27 |
The later of: (a) the day after the day on which this Act receives the Royal Assent;
and (b) 1 July 2004. |
|
|
4. Schedule 1, items 28 to 30 |
1 July 2004. |
1 July 2004 |
|
5. Schedule 1, items 31 to 34 |
The later of: (a) the day after the day on which this Act receives the Royal Assent;
and (b) 1 July 2004. |
|
|
6. Schedule 1, items 35 and 36 |
1 July 2004. |
1 July 2004 |
|
7. Schedule 2 |
1 July 2004. |
1 July 2004 |
|
8. Schedule 3 |
The later of: (a) the day after the day on which this Act receives the Royal Assent;
and (b) 1 July 2004. |
|
|
9. Schedule 4, items 1 to 5 |
The day on which this Act receives the Royal Assent. |
|
|
10. Schedule 4, items 6 to 8 |
The day after this Act receives the Royal Assent. |
|
|
11. Schedule 4, item 9 |
The day on which this Act receives the Royal Assent. |
|
|
12. Schedule 5 |
The day on which this Act receives the Royal Assent. |
|
|
13. Schedule 6, item 1 |
Immediately after the commencement of the Medical Indemnity Amendment
Act 2004. |
23 March 2004 |
|
13A. Schedule 6, item 1A |
Immediately after the commencement of the Medical Indemnity Act
2002. |
1 January 2003 |
|
14. Schedule 6, item 2 |
Immediately after the commencement of Schedule 2 to the Medical
Indemnity Amendment Act 2003. |
5 December 2003 |
|
15. Schedule 6, items 3 to 6 |
The day on which this Act receives the Royal Assent. |
|
|
16. Schedule 6, items 7 to 9 |
Immediately after the commencement of the Medical Indemnity (Prudential
Supervision and Product Standards) Act 2003. |
1 July 2003 |
|
17. Schedule 6, items 10 to 13 |
The day on which this Act receives the Royal Assent. |
|
|
18. Schedule 6, item 14 |
Immediately after the commencement of paragraph 4(1)(aa) of the Medical
Indemnity (Prudential Supervision and Product Standards) Regulations
2003. |
1 July 2003 |
Note: This table relates only to the provisions of this Act
as originally passed by the Parliament and assented to. It will not be expanded
to deal with provisions inserted in this Act after assent.
(2) Column 3 of the table contains additional information that is not part
of this Act. Information in this column may be added to or edited in any
published version of this Act.
Each Act, and each set of regulations, that is specified in a Schedule to
this Act is amended or repealed as set out in the applicable items in the
Schedule concerned, and any other item in a Schedule to this Act has effect
according to its terms.
1 After paragraph 3(2)(aa)
Insert:
(ab) meeting the amounts payable in relation to certain claims (notified
on or after 1 July 2004) against medical practitioners who are no longer in
private medical practice; and
2 Subsection 4(1)
Insert:
affected medical practitioner has the meaning given by
section 34ZQ.
3 Subsection 4(1)
Insert:
eligible run-off claim has the meaning given by
section 34ZB.
4 Subsection 4(1) (at the end of the definition of
indemnity scheme payment)
Add:
; or (d) a run-off cover indemnity.
5 Subsection 4(1) (after paragraph (aa) of the
definition of late payment penalty)
Insert:
(ab) in relation to a debt owed under section 34ZJ—means a
penalty payable under section 34ZM; and
6 Subsection 4(1) (at the end of the definition of
medical practitioner)
Add:
Note: Subsection (6) gives this definition an extended
meaning in Division 2B or 4 of Part 2.
7 Subsection 4(1)
Insert:
Run-off Cover Claims and Administration Protocol means the
protocol (as amended and in force from time to time) determined by the Minister
under section 34ZN.
8 Subsection 4(1)
Insert:
run-off cover credit has the meaning given by subsection
34ZS(2).
9 Subsection 4(1)
Insert:
run-off cover indemnity means a run-off cover indemnity paid
or payable under Division 2B of Part 2.
Note: Amounts payable under the Run-off Cover Claims and
Administration Protocol are not covered by this definition.
10 Subsection 4(1)
Insert:
total run-off cover credit has the meaning given by
section 34ZS.
11 At the end of section 4
Add:
Medical practitioners
(6) A reference in Division 2B or 4 of Part 2 to a medical
practitioner includes a reference to a person who has been a medical
practitioner.
12 After subsection 7(2)
Insert:
(2A) For the purposes of subparagraph 34ZB(1)(e)(ii), a person has
incident-occurring based cover if, under an arrangement between an
MDO and the person, the MDO:
(a) would be able to indemnify the person in relation to an incident if
the person were to make a proper claim in relation to the incident;
and
(b) would be able, in the ordinary course of its business, to indemnify
the person in relation to the incident even if the person had ceased to be a
member of the MDO when the claim was made.
13 After paragraph 19(c)
Insert:
(ca) a run-off cover indemnity is payable to the MDO or insurer in
relation to the same claim; or
14 Section 34D
After “high cost claim indemnity”, insert “, or a run-off
cover indemnity,”.
Note: The heading to section 34D is altered by
inserting “and run-off cover indemnity scheme” after
“indemnity scheme”.
15 After subsection 34E(1)
Insert:
Certain eligible run-off claims may relate to treatment of public
patients in public hospitals
(1A) Paragraph (1)(d) does not apply to an eligible run-off claim
if:
(a) the claim relates to an incident that occurred, or a series of
incidents that occurred, before 1 July 2003; and
(b) at the time the incident, or one or more of the incidents, occurred,
there was an arrangement with an MDO under which the MDO would have been able to
indemnify the practitioner in relation to the incident or series of incidents if
the claim had been made while the arrangement had effect; and
(c) at the time the claim is made, a contract of insurance with a medical
indemnity insurer provides medical indemnity cover for the practitioner;
and
(d) the medical indemnity cover is provided under an arrangement of a kind
referred to in paragraph 26B(1)(f) of the Medical Indemnity (Prudential
Supervision and Product Standards) Act 2003; and
(e) the medical indemnity cover satisfies all of the requirements of
subsection 26A(4) of that Act.
16 After paragraph 34S(2)(b)
Insert:
(ba) a payment of run-off cover indemnity;
17 After paragraph 34T(5)(b)
Insert:
(ba) a payment of run-off cover indemnity;
18 After Division 2A of
Part 2
Insert:
(1) This Division provides that a run-off cover indemnity may be paid in
relation to a liability of a medical practitioner if the liability relates to an
eligible run-off claim.
(2) This Division also provides for the determination of a Run-off Cover
Claims and Administration Protocol that can deal with other matters relating to
eligible run-off claims.
(3) The following table tells you where to find the provisions dealing
with various issues:
|
Where to find the provisions on various issues |
||
|---|---|---|
|
Item |
Issue |
Provisions |
|
1 |
what is an eligible run-off claim? |
section 34ZB |
|
2 |
when is a run-off cover indemnity payable in respect of a
liability? |
sections 34ZC to 34ZG |
|
3 |
how much run-off cover indemnity is payable? |
section 34ZH |
|
4 |
what if a payment is received that would have reduced the amount of an
insurance payment? |
sections 34ZI to 34ZM |
|
5 |
the Run-off Cover Claims and Administration Protocol, and what it can deal
with |
sections 34ZN and 34ZO |
|
6 |
what is the effect of terminating the run-off cover indemnity
scheme? |
sections 34ZP to 34ZT |
|
7 |
notifying the HIC if a person ceases to be covered by the run-off cover
indemnity scheme |
section 34ZU |
|
8 |
invoices for medical indemnity cover |
section 34ZV |
|
9 |
reports on the run-off cover indemnity scheme |
section 34ZW |
|
10 |
modifications and exclusions by regulations |
section 34ZX |
|
11 |
how does a person apply for a run-off cover indemnity? |
section 36 |
|
12 |
when will a run-off cover indemnity be paid? |
section 37 |
|
13 |
what information has to be provided to the HIC about run-off cover
indemnity matters? |
section 38 |
|
14 |
what records must be kept in relation to run-off cover indemnity
matters? |
section 39 |
|
15 |
how are overpayments of a run-off cover indemnity recovered? |
sections 41 and 42 |
Note: Division 2A of Part 3 of the Medical
Indemnity (Prudential Supervision and Product Standards) Act 2003 requires
medical indemnity insurers to provide “run-off cover” for medical
practitioners in certain circumstances covered by the run-off cover indemnity
scheme.
(1) A claim is an eligible run-off claim if:
(a) it is a claim made against a person who, at the time the claim is
made, is a person to whom subsection (2) applies; and
(b) it relates to an incident, or a series of related incidents, that
occurred in the course of, or in connection with, the person’s practice as
a medical practitioner; and
(c) at the time of the incident, or one or more of the
incidents:
(i) a contract of insurance provided the person with medical indemnity
cover; or
(ii) an arrangement with an MDO provided medical indemnity cover (within
the meaning of the Medical Indemnity (Prudential Supervision and Product
Standards) Act 2003) for the person;
and the cover would have indemnified the person in relation to the claim
if the claim had been made at that time; and
(d) if a termination date for the run-off cover indemnity scheme has been
set (see subsection (3)), the person:
(i) was, immediately before the termination date, a person to whom
subsection 34ZB(2) applies; and
(ii) continued to be such a person for the whole of the period between the
termination date and the time when an MDO or insurer was first notified of the
claim, or of facts that might give rise to the claim; and
(e) the person has medical indemnity cover that indemnifies the person in
relation to the claim, being cover that:
(i) is required to be provided under Division 2A of Part 3 of
the Medical Indemnity (Prudential Supervision and Product Standards) Act
2003; or
(ii) is incident-occurring based cover provided by an MDO.
Note: For the meaning of incident-occurring based cover, see
subsections 7(2A) and (3).
(2) This subsection applies to a person who is one or more of the
following:
(a) a person aged 65 years or over who has retired permanently from
private medical practice;
(b) a person who has not engaged in private medical practice at any time
during the preceding period of 3 years;
(c) a person who has ceased (temporarily or permanently) private medical
practice because of maternity;
(d) a person who has ceased private medical practice because of a
permanent disability;
(e) a person who is the legal personal representative of a deceased person
who had been a medical practitioner;
(f) a person who is included in a class of persons that the regulations
specify as persons to whom this subsection applies.
However, a person is not a person to whom this subsection applies if the
person is included in a class of persons that the regulations specify as a class
of persons to whom this subsection does not apply.
(3) The regulations may set a termination date for the run-off cover
indemnity scheme.
(4) The termination date cannot be a date occurring before the end of the
period of 12 months after the day on which the regulations are notified in the
Gazette.
(5) In this section:
private medical practice means practice as a medical
practitioner, other than:
(a) practice consisting of treatment of public patients in a public
hospital; and
(b) practice for which:
(i) the Commonwealth, a State or a Territory; or
(ii) a local governing body; or
(iii) an authority established under a law of the Commonwealth, a State or
a Territory;
indemnifies medical practitioners from liability relating to compensation
claims (within the meaning of the Medical Indemnity (Prudential Supervision
and Product Standards) Act 2003); and
(c) practice conducted wholly outside both Australia and the external
Territories; and
(d) practice of a kind specified in the regulations.
A run-off cover indemnity is payable to an MDO or a medical indemnity
insurer under this section if:
(a) an eligible run-off claim is made that relates to an incident, or a
series of related incidents, that occurred in the course of, or in connection
with, a person’s practice as a medical practitioner; and
(b) in the case of an MDO—the MDO makes, or is able to make, a
payment in relation to the claim:
(i) under an arrangement, with the MDO or someone else, under which the
MDO is able to indemnify the person in relation to claims made by or against the
person while he or she is a person to whom subsection 34ZB(2) applies;
and
(ii) in the ordinary course of the MDO’s business; and
(c) in the case of a medical indemnity insurer—the insurer makes, or
is liable to make, a payment in relation to the claim under a contract of
insurance under which the insurer is liable to indemnify the person in relation
to claims made by or against the person while he or she is a person to whom
subsection 34ZB(2) applies; and
(d) the MDO or medical indemnity insurer was first notified of the claim,
or of facts that might give rise to the claim on or after 1 July 2004;
and
(e) the MDO or medical indemnity insurer applies to the HIC for the
run-off cover indemnity in accordance with section 36.
(1) If an MDO is an externally-administered body corporate:
(a) the reference in paragraph 34ZC(b) to a payment that the MDO is able
to make under an arrangement to indemnify a person is a reference to an amount
that:
(i) the MDO is liable to make under the arrangement to indemnify the
person; and
(ii) is a provable amount; and
(b) the reference in that paragraph to a payment that the MDO is able to
make in the ordinary course of the MDO’s business is a reference to an
amount that the MDO:
(i) is liable to pay; and
(ii) would be able to pay in the ordinary course of the MDO’s
business if it were not an externally-administered body corporate.
(2) If a medical indemnity insurer is an externally-administered body
corporate, the reference in paragraph 34ZC(c) to a payment that the medical
indemnity insurer makes or is liable to make under a contract of insurance to
indemnify a person is a reference to an amount that:
(a) the medical indemnity insurer pays or is liable to pay under the
contract to indemnify the person; and
(b) is a provable amount.
(3) If a run-off cover indemnity is paid to an MDO or medical indemnity
insurer that is an externally-administered body corporate, the indemnity is, to
the extent to which it is attributable to an amount that the MDO or medical
indemnity insurer is liable to pay to a person, paid on trust for the benefit of
that person.
(1) This section applies if:
(a) an MDO pays, or is liable to pay, an amount in relation to a claim;
and
(b) a medical indemnity insurer also pays, or is also liable to pay, an
amount in relation to the same claim (the insurer amount);
and
(c) but for this section, a run-off cover indemnity in respect of the
insurer amount would be payable to the insurer under section 34ZC;
and
(d) the medical indemnity insurer elects in writing to have this section
apply to the insurer amount.
(2) For the purposes of this Division (other than this section):
(a) the MDO is taken:
(i) to have paid, or to be liable to pay, the insurer amount in relation
to the claim; and
(ii) to satisfy paragraphs 34ZC(a) to (e) in relation to the insurer
amount; and
(b) a run-off cover indemnity is not payable to the medical indemnity
insurer in respect of the insurer amount.
A run-off cover indemnity is payable to an MDO or a medical indemnity
insurer under section 34ZC in relation to a payment the MDO makes or is
able to make, or the medical indemnity insurer makes or is liable to make, in
relation to a claim even if:
(a) the MDO or medical indemnity insurer:
(i) has insured itself in relation to the payment; or
(ii) has already in fact been paid an amount by an insurer in relation to
the payment; or
(b) the incident to which the claim relates occurred outside Australia and
the external Territories.
A run-off cover indemnity is not payable to an MDO or a medical indemnity
insurer under section 34ZC in relation to a payment the MDO makes or is
able to make, or the medical indemnity insurer makes or is liable to make, in
relation to a claim if:
(a) the payment is an insurer-to-insurer payment; or
(b) the payment is a payment prescribed by the regulations for the
purposes of this section.
(1) The amount of a run-off cover indemnity is the amount of the payment
referred to in paragraph 34ZC(b) or (c) (as the case requires).
(2) However, if a high cost claim indemnity is payable in respect of that
payment, the amount of the run-off cover indemnity is reduced by the amount of
the high cost claim indemnity.
(1) If:
(a) an amount (the indemnity payment) has been paid, in
relation to a liability of a medical practitioner, under:
(i) an arrangement with an MDO for indemnifying the practitioner in
relation to claims that may be made against the practitioner in relation to
incidents that occur or occurred in the course of, or in connection with, the
practice of the practitioner’s profession; or
(ii) a contract of insurance with a medical indemnity insurer that
provides medical indemnity cover for the practitioner; and
(b) another amount (not being an amount referred to in
subsection (2)) has been paid to the practitioner, MDO, medical indemnity
insurer or another person in relation to the incident or incidents to which the
liability relates; and
(c) the other amount was not taken into account in working out the amount
of the indemnity payment; and
(d) if the other amount had been taken into account in working out the
amount of the indemnity payment, a lesser amount would have been paid under the
arrangement with the MDO, or under the contract of insurance, in relation to the
liability;
then, for the purpose of calculating the amount of run-off cover indemnity
(if any) that is payable in relation to a liability of the practitioner, the
lesser amount is taken to have been the amount of the indemnity
payment.
(2) This section does not apply to any of the following:
(a) an amount paid to a medical indemnity insurer by another insurer under
a right of contribution;
(b) a payment of high cost claim indemnity;
(c) a payment of exceptional claims indemnity;
(d) an amount of a kind specified in the regulations for the purposes of
this paragraph.
(1) This section applies if:
(a) an amount (the actual run-off cover amount) of run-off
cover indemnity has been paid in relation to an eligible run-off claim made
against a medical practitioner; and
(b) another amount (not being an amount referred to in
subsection (5)) is paid to the practitioner, an MDO, a medical indemnity
insurer or another person in relation to the incident or incidents to which the
claim relates, or in relation to one or more other incidents; and
(c) the other amount was not taken into account in calculating the actual
run-off cover amount; and
(d) if the other amount had been so taken into account, a lesser amount
(the reduced run-off cover amount, which could be zero) of run-off
cover indemnity would have been paid in relation to the liability.
(2) The amount overpaid is the amount by which the actual
run-off cover amount exceeds the reduced run-off cover amount.
(3) If the HIC has given an MDO or a medical indemnity insurer a notice
under subsection 34ZL(1) in relation to the amount overpaid, the amount is a
debt owed to the Commonwealth by the MDO or insurer.
(4) The amount overpaid may be recovered:
(a) by action by the HIC against the MDO or insurer in a court of
competent jurisdiction; or
(b) under section 42.
(5) This section does not apply to any of the following:
(a) an amount paid to an insurer by another insurer under a right of
contribution;
(b) a payment of high cost claim indemnity;
(c) a payment of exceptional claims indemnity;
(d) an amount of a kind specified in the regulations for the purposes of
this paragraph.
(1) If:
(a) a run-off cover indemnity has been paid to an MDO or medical indemnity
insurer in relation to a liability that relates to a claim made against a
medical practitioner; and
(b) the MDO or medical indemnity insurer becomes aware that another amount
has been paid to the practitioner, MDO, medical indemnity insurer or another
person in relation to the incident or incidents to which the claim relates, or
in relation to one or more other incidents; and
(c) because of the payment of the other amount, there is an amount
overpaid as described in subsection 34ZJ(2);
the MDO or medical indemnity insurer must notify the HIC that the other
amount has been paid.
Note: Failure to notify is an offence (see
section 46).
(2) The notification must:
(a) be in writing; and
(b) be given to the HIC within 28 days after the applicant becomes aware
that the other amount has been paid.
(1) If:
(a) a run-off cover indemnity has been paid to an MDO or medical indemnity
insurer in relation to a liability that relates to a claim made against a
medical practitioner; and
(b) another amount is paid to the practitioner, MDO, medical indemnity
insurer or another person in relation to the incident or incidents to which the
claim relates, or in relation to one or more other incidents; and
(c) because of the payment of the other amount, there is an amount
overpaid as described in subsection 34ZJ(2);
the HIC may give the MDO or medical indemnity insurer a written notice that
specifies:
(d) the amount overpaid, and that it is a debt owed to the Commonwealth
under subsection 34ZJ(3); and
(e) the day before which the amount must be paid to the Commonwealth;
and
(f) the effect of section 34ZM.
The day specified under paragraph (e) must be at least 28 days after
the day on which the notice is given.
(2) The debt becomes due and payable on the day specified under
paragraph (1)(e).
(1) If:
(a) a person owes a debt to the Commonwealth under subsection 34ZJ(3);
and
(b) the debt remains wholly or partly unpaid after it becomes due and
payable;
the person is liable to pay a late payment penalty under this
section.
(2) The late payment penalty is calculated:
(a) at the rate specified in the regulations for the purposes of this
paragraph; and
(b) on the unpaid amount; and
(c) for the period:
(i) starting when the amount becomes due and payable; and
(ii) ending when the amount, and the penalty payable under this section in
relation to the amount, have been paid in full.
(3) The HIC may remit the whole or a part of an amount of late payment
penalty if the HIC considers that there are good reasons for doing so.
(4) An application may be made to the Administrative Appeals Tribunal for
review of a decision of the HIC not to remit, or to remit only part of, an
amount of late payment penalty.
Note: Section 27A of the Administrative Appeals
Tribunal Act 1975 requires notification of a decision that is
reviewable.
(1) The Minister may, by writing, determine a protocol (the Run-off
Cover Claims and Administration Protocol) for:
(a) making payments to MDOs and medical indemnity insurers of claim
handling fees in respect of eligible run-off claims; and
(b) making payments on account of legal, administrative or other costs
incurred by MDOs and medical indemnity insurers (whether on their own behalf or
otherwise) in respect of eligible run-off claims; and
(c) making payments on account of legal, administrative or other costs
incurred by medical indemnity insurers (whether on their own behalf or
otherwise) in respect of complying with Division 2A of Part 3 of the
Medical Indemnity (Prudential Supervision and Product Standards) Act
2003.
(2) Without limiting subsection (1), the Run-off Cover Claims and
Administration Protocol may:
(a) make provision for:
(i) the conditions that must be satisfied for an amount to be payable to
an MDO or medical indemnity insurer; and
(ii) the amount that is payable; and
(iii) the conditions that must be complied with by an MDO or medical
indemnity insurer to which an amount is paid; and
(iv) other matters related to the making of payments, and the recovery of
overpayments; and
(b) provide that this Division applies with specified modifications in
relation to a liability that relates to costs in relation to which an amount has
been paid under the Protocol.
(3) Paragraph (2)(b) does not allow the Run-off Cover Claims and
Administration Protocol to modify a provision that creates an offence, or that
imposes an obligation which, if contravened, constitutes an offence.
(4) The Run-off Cover Claims and Administration Protocol may also provide
for other matters of a kind specified in regulations made for the purposes of
this subsection.
(5) The instrument determining the Run-off Cover Claims and Administration
Protocol, and any instruments amending or revoking the Protocol, are
disallowable instruments for the purposes of section 46A of the Acts
Interpretation Act 1901.
(1) If the HIC believes that a person is capable of giving information
that is relevant to determining:
(a) whether an MDO or medical indemnity insurer is entitled to a payment
under the Run-off Cover Claims and Administration Protocol; or
(b) the amount that is payable to an MDO or medical indemnity insurer
under the Run-off Cover Claims and Administration Protocol;
the HIC may request the person to give the HIC the information.
Note: Failure to comply with the request is an offence (see
section 45).
(2) Without limiting subsection (1), any of the following persons may
be requested to give information under that subsection:
(a) an MDO;
(b) an insurer;
(c) a member or former member of an MDO;
(d) a person who practises, or used to practise, a medical
profession;
(e) a person who is acting, or has acted, on behalf of a person covered by
paragraph (d);
(f) a legal personal representative of a person covered by
paragraph (c), (d) or (e).
(3) Without limiting subsection (1), if the information sought by the
HIC is information relating to a matter in relation to which a person is
required by section 39 to keep a record, the HIC may request the person to
give the information by giving the HIC the record, or a copy of the
record.
(4) The request:
(a) must be made in writing; and
(b) must state what information must be given to the HIC; and
(c) may require the information to be verified by statutory declaration;
and
(d) must specify a day on or before which the information must be given;
and
(e) must contain a statement to the effect that a failure to comply with
the request is an offence.
The day specified under paragraph (d) must be at least 28 days after
the day on which the request was made.
(1) If a termination date for the run-off cover indemnity scheme has been
set (see subsection 34ZB(3)), the Commonwealth is liable to pay an amount in
accordance with this Subdivision in relation to each affected medical
practitioner.
(2) However, this section does not apply if:
(a) the Minister determines in writing that alternative arrangements for
providing medical cover for medical practitioners in relation to eligible
run-off claims will apply on and from the termination date; and
(b) the determination is made on or before the termination date.
(3) A determination under paragraph (2)(a) is a disallowable
instrument for the purposes of section 46A of the Acts Interpretation
Act 1901.
A medical practitioner is an affected medical practitioner
if:
(a) a termination date for the run-off cover indemnity scheme has been set
(see subsection 34ZB(3)); and
(b) prior to the termination date, one or more premiums have been paid for
medical indemnity cover, for the medical practitioner, in relation to one or
more periods totalling at least 12 months; and
(c) immediately before the termination date, the medical practitioner was
not a person to whom subsection 34ZB(2) applies.
(1) A payment that the Commonwealth is liable to make in relation to an
affected medical practitioner:
(a) must be paid to a person who:
(i) is nominated by the practitioner; and
(ii) has, on or after the termination date, provided medical indemnity
cover for the practitioner under a contract of insurance; and
(b) must be paid as all or part of the premium payable for the provision
of that cover; and
(c) must be paid within 12 months after the termination date;
and
(d) must not exceed the practitioner’s total run-off cover
credit.
(2) Amounts payable by the Commonwealth under this Subdivision are payable
out of the Consolidated Revenue Fund, which is appropriated
accordingly.
(1) This is how to work out an affected practitioner’s total run-off
cover credit:
Method statement
Step 1. For the first financial year after 30 June 2004 in
which a medical indemnity insurer provided medical indemnity cover for the
practitioner under a contract of insurance, multiply:
(a) the practitioner’s run-off cover credit for the financial year;
by
(b) the interest rate adjustment for the financial year (see
subsection (4)).
Step 2. For each subsequent financial year (if any) until the
financial year in which the termination date occurs, multiply:
(a) the sum of the practitioner’s run-off cover credit for the
financial year and the amount worked out, under Step 1 or this Step, for the
immediately preceding financial year; by
(b) the interest rate adjustment for the financial year (see
subsection (4)).
Step 3. Add together:
(a) the practitioner’s run-off cover credit for the financial year
in which the termination date occurs; and
(b) the last of the amounts worked out under Step 1 or Step 2.
The result is the practitioner’s total run-off cover
credit.
(2) The practitioner’s run-off cover credit for a
financial year is the sum of all run-off cover support payments paid or payable
to the extent that they are attributable, under subsection (3), to the
practitioner in relation to the financial year.
(3) Run-off cover support payments are attributable to the
practitioner in relation to the financial year to the extent that they relate to
premiums paid during the financial year to a medical indemnity insurer for
medical indemnity cover provided for the practitioner by one or more contracts
of insurance with the insurer.
(4) The interest rate adjustment for a financial year is the
number worked out as follows:
where:
applicable interest rate is:
(a) the rate of interest, for the financial year, specified in the
regulations for the purposes of this paragraph; or
(b) if no rate is so specified—the short-term bond rate for the June
quarter immediately preceding the financial year.
June quarter means a period of 3 months commencing on
1 April.
short-term bond rate, for a June quarter, means:
(a) if:
(i) the Reserve Bank of Australia has published, in respect of one or more
days in the last 2 weeks of the quarter, an indicative secondary market mid-rate
yield for Australian Government fixed coupon Treasury bonds; and
(ii) the maturity date of the bonds is the third anniversary of the 15th
day of the quarter or (if there are no bonds with that maturity date) the closer
or closest date to that date within 2 years after it;
the yield referred to in subparagraph (i) in respect of the day
referred to in that subparagraph, or the average of the yields referred to in
subparagraph (i) in respect of the days referred to in that subparagraph,
as the case requires; or
(b) in any other case—the rate of interest notified in the
Gazette, by the Minister administering the Loan (Income Equalization
Deposits) Act 1976, as the rate of interest in relation to the quarter for
the purposes of this definition.
(1) A medical indemnity insurer must, in relation to each run-off cover
payment that the medical indemnity insurer is liable to make to the HIC, notify
the HIC of:
(a) each medical practitioner to whom the payment is attributable;
and
(b) for each such practitioner, each financial year in relation to which
the payment is attributable; and
(c) for each such practitioner and financial year, the extent to which the
payment is attributable to the practitioner in relation to the financial
year.
Note: Failure to notify is an offence (see
section 46).
(2) The notification must:
(a) be made in writing; and
(b) must be given to the HIC on or before the payment day under
section 61 for the run-off cover payment.
(1) If:
(a) a person ceases to be a person to whom subsection 34ZB(2) applies;
and
(b) immediately before the cessation, an MDO or medical indemnity insurer
was providing medical indemnity cover (within the meaning of the Medical
Indemnity (Prudential Supervision and Product Standards) Act 2003) to the
person;
the MDO or medical indemnity insurer must notify the HIC of the
cessation.
Note: Failure to notify is an offence (see
section 46).
(2) The notification must:
(a) be in writing; and
(b) set out details of the cessation; and
(c) be given to the HIC within 28 days after the day on which the person
becomes aware of the cessation.
If:
(a) a medical indemnity insurer gives to a person an invoice stating the
premium that is or will be payable for medical indemnity cover provided by a
contract of insurance with the medical indemnity insurer; and
(b) payment of the premium would increase the medical indemnity
insurer’s liability to pay run-off cover support payment;
the medical indemnity insurer must ensure that the invoice
states:
(c) the total premium payable for the medical indemnity cover;
and
(d) the proportion of that premium that represents the amount of run-off
cover support payment that would be payable by the medical indemnity insurer in
relation to that premium; and
(e) the amount of the premium constituted by that proportion.
Note: Failure to comply with this section is an offence (see
section 47A).
(1) The Minister must, in relation to each financial year starting on or
after 1 July 2004:
(a) cause a report to be prepared of the operation of this Division within
6 months after the end of the financial year; and
(b) cause a copy of the report to be tabled in each House of the
Parliament within 15 sitting days of that House after its receipt by the
Minister.
(2) Without limiting the matters that may be included in a report under
subsection (1) in relation to a financial year, the report must
include:
(a) a statement of the number of persons who were, at the end of the
financial year, persons to whom subsection 34ZB(2) applies; and
(b) a statement of the total of all the amounts of run-off cover
indemnity, and amounts payable under the Run-off Cover Claims and Administration
Protocol, paid by the Commonwealth during the financial year; and
(c) a statement of the total of all the amounts of run-off cover support
payments paid to the Commonwealth during the financial year; and
(d) estimates by the Actuary of the Commonwealth’s liabilities under
this Division in future financial years.
(3) If a termination date for the run-off cover indemnity scheme has been
set (see subsection 34ZB(3)), this section does not apply in relation to a
financial year starting after the end of the financial year in which the
termination date occurs.
(1) The regulations may provide that this Division applies with specified
modifications in relation to:
(a) a specified class of claims; or
(b) a specified class of arrangements with MDOs or contracts of insurance;
or
(c) a specified class of situations in which a liability is, whether
wholly or partly, covered by more than one contract of insurance.
(2) The regulations may provide that this Division does not apply, or
applies with specified modifications, in relation to a specified class of
liabilities or payments.
(3) Without limiting subsection (2), the regulations may specify
modifications regarding how this Division applies in relation to a liability
under an order of a court requiring an amount to be paid pending the outcome of
an appeal, including modifications:
(a) to deal with what happens if, as a result of the appeal or another
appeal, the amount paid later becomes wholly or partly repayable; and
(b) to deal with what happens if the amount paid is later applied towards
a liability that is confirmed as a result of the appeal or another
appeal.
(4) This section does not allow the regulations to modify a provision that
creates an offence, or that imposes an obligation which, if contravened,
constitutes an offence.
19 Application of sections 34ZB, 34ZO and
34ZU
If item 18 of this Schedule commences before this Act receives the
Royal Assent:
(a) subparagraph 34ZB(1)(e)(i) of the Medical Indemnity Act 2002 as
amended by this Act applies as if Schedule 3 to this Act had commenced at
the same time as item 18 of this Schedule; and
(b) the HIC must not make a request, under section 34ZO of that Act
as so amended, before this Act receives the Royal Assent; and
(c) paragraph 34ZU(2)(c) of that Act as so amended applies as if a person
is not in any event required to give notice, under section 34ZU of that Act
as so amended, earlier than 28 days after this Act receives the Royal
Assent.
20 Subsection 35(1)
Omit “and the exceptional claims indemnity scheme”, substitute
“, the exceptional claims indemnity scheme and the run-off cover indemnity
scheme”.
21 Subsection 36(1)
Omit “or a high cost claim indemnity”, substitute “, a
high cost claim indemnity or a run-off cover indemnity”.
Note: The heading to section 36 is altered by omitting
“or high cost claim indemnity” and substituting “,
high cost claim indemnity or run-off cover
indemnity”.
22 Subsection 37(1)
Omit “or a high cost claim indemnity”, substitute “, a
high cost claim indemnity or a run-off cover indemnity”.
Note: The heading to section 37 is altered by omitting
“or high cost claim indemnity” and substituting “,
high cost claim indemnity or run-off cover
indemnity”.
23 Paragraphs 37(2)(a) and (d)
Omit “or a high cost claim indemnity”, substitute “, a
high cost claim indemnity or a run-off cover indemnity”.
24 Subsection 37(2)
Omit “or the high cost claim indemnity”, substitute “,
the high cost claim indemnity or the run-off cover indemnity”.
25 Subsection 39(1)
After “the Exceptional Claims Protocol”, insert “or the
Run-off Cover Claims and Administration Protocol”.
26 Paragraph 39(1)(c)
Omit “or 34T”, substitute “, 34T or
34ZJ”.
27 At the end of paragraph
39(2)(b)
Add:
; (iv) if the record is required to be kept because the person applied for
a run-off cover indemnity—the day on which Division 2B
commenced;
(v) if the record is required to be kept because the person applied for a
payment under the Run-off Cover Claims and Administration Protocol—the day
on which the Protocol took effect.
28 Paragraphs 41(3)(a) and
(4)(b)
Omit “or a high cost claim indemnity”, substitute “, a
high cost claim indemnity or a run-off cover indemnity”.
29 Subsection 42(1)
After “34T(3)”, insert “, 34ZJ(3)”.
30 After section 44A
Insert:
The HIC may notify an affected medical practitioner of:
(a) the practitioner’s run-off cover credit for a financial year;
or
(b) the amount worked out in relation to the practitioner under Step 2 of
the Method Statement in subsection 34ZS(1) for a financial year; or
(c) the practitioner’s total run-off cover credit.
31 After paragraph 45(1)(ba)
Insert:
(bb) subsection 34ZO(1); or
32 Subsection 46(1)
Omit “or 34U”, substitute “, 34U, 34ZK, 34ZT or
34ZU”.
33 Subsection 46(3)
Omit “or 34U(1)(b)”, substitute “, 34U(1)(b) or
34ZK(1)(b)”.
34 At the end of Division 5 of
Part 2
Add:
(1) This section applies if section 34ZV applies to an invoice that a
medical indemnity insurer gives to a person.
(2) A person commits an offence if:
(a) the person is a medical indemnity insurer; and
(b) the person gives such an invoice to another person; and
(c) the invoice does not state the matters required by
section 34ZV.
Penalty: 30 penalty units.
(3) An offence against subsection (2) is an offence of strict
liability.
Note: For strict liability, see
section 6.1 of the Criminal Code.
(4) To avoid doubt, subsection 4B(3) of the Crimes Act 1914 applies
to any offence against this section committed by a body corporate, as if an
offence against that provision could be committed by a natural person.
(5) Subsection (4) does not affect the meaning of any other offence
against this Act.
35 After paragraph 48(bb)
Insert:
(bc) run-off cover indemnities; and
(bd) amounts payable under the Run-off Cover Claims and Administration
Protocol; and
Medical Indemnity
(Prudential Supervision and Product Standards) Act 2003
36 After paragraph 20(a)
Insert:
(aa) any right the insurer may have to a run-off cover indemnity under the
Medical Indemnity Act 2002;
1 Subsection 130(25) (paragraph (b) of the
definition of medical indemnity legislation)
Repeal the paragraph, substitute:
(b) the Medical Indemnity (Run-off Cover Support Payment) Act 2004;
and
Health Insurance Commission
Act 1973
2 Paragraph 42(2)(b)
Repeal the paragraph, substitute:
(b) the Medical Indemnity (Run-off Cover Support Payment) Act
2004;
3 Paragraph 3(4)(b)
Repeal the paragraph, substitute:
(b) to recover the costs of providing the assistance referred to in
paragraph (2)(ab) by requiring payments from medical indemnity
insurers.
4 Subsection 4(1) (paragraph (b) of the
definition of contribution year)
Repeal the paragraph, substitute:
(b) for a run-off cover support payment—has the same meaning as in
the Medical Indemnity (Run-off Cover Support Payment) Act 2004.
5 Subsection 4(1) (definition of imposition
day)
Repeal the definition, substitute:
imposition day, for a UMP support payment payable by a
participating member of a participating MDO, has the same meaning as in the
Medical Indemnity (UMP Support Payment) Act 2002.
6 Subsection 4(1) (paragraph (b) of the
definition of medical indemnity payment)
Omit “an enhanced UMP indemnity contribution”, substitute
“a run-off cover support payment”.
7 Subsection 4(1) (paragraph (b) of the
definition of medical indemnity payment legislation)
Repeal the paragraph, substitute:
(b) the Medical Indemnity (Run-off Cover Support Payment) Act
2004.
8 Division 2 of
Part 3
Repeal the Division, substitute:
(1) Division 2B of Part 2 provides for the payment of run-off
cover indemnities.
(2) The Medical Indemnity (Run-off Cover Support Payment) Act 2004
(the Payment Act):
(a) imposes payments on medical indemnity insurers for contribution years;
and
(b) specifies the amount of those payments (by reference to an
insurer’s premium income for the contribution year).
This Division contains further provisions relating to the
payment.
(3) The following table tells you where to find the provisions dealing
with various issues:
|
Where to find the provisions on various issues |
||
|---|---|---|
|
Item |
Issue |
Provisions |
|
1 |
which years are contribution years? |
section 5 of the Payment Act |
|
2 |
who must pay the run-off cover support payment? |
section 58 of this Act |
|
3 |
who is exempt from the run-off cover support payment? |
section 59 of this Act |
|
4 |
what is the amount of the run-off cover support payment? |
section 6 of the Payment Act |
|
5 |
what is the time for paying the run-off cover support payment? |
sections 61 and 62 of this Act |
|
6 |
when is late payment penalty payable? |
section 65 of this Act |
|
7 |
what method should be used to pay the run-off cover support
payment? |
section 66 of this Act |
|
8 |
what happens if an amount of run-off cover support payment is
overpaid? |
section 67 of this Act |
|
9 |
how are run-off cover support payments and late payment penalties
recovered? |
sections 68 to 70 of this Act |
|
10 |
what information has to be provided to the HIC about run-off cover support
payment matters? |
sections 71 and 72 of this Act |
A person is liable to pay a run-off cover support payment for a financial
year if:
(a) the person is a medical indemnity insurer; and
(b) the financial year is a contribution year; and
(c) the person is not exempt from the contribution under
section 59.
(1) The regulations may provide that a person is exempt from run-off cover
support payment in the circumstances specified in the regulations.
(2) Regulations made for the purposes of subsection (1) may provide
that a person is exempt from run-off cover support payment either generally or
for a particular contribution year.
9 Subsection 60(1)
Omit “enhanced UMP indemnity contributions”, substitute
“run-off cover support payments”.
10 Section 61 (table
item 2)
Repeal the item, substitute:
|
2 |
run-off cover support payment |
(a) 30 June in the contribution year; or (b) such other day as is specified in the regulations as the payment day
for the contribution year either generally for all people, for the class of
people that includes the person or for the person, as the case may be. |
11 Subsection 62(1)
Omit “medical indemnity payment”, substitute “UMP support
payment”.
Note: The heading to section 62 is altered by omitting
“medical indemnity payment” and substituting “UMP
support payment”.
12 Subparagraphs 62(3)(b)(i) and
(ii)
Omit “that kind of medical indemnity payment”, substitute
“a UMP support payment”.
13 Subsection 62(4)
Repeal the subsection, substitute:
(4) If the HIC approves the application, the payment that the person is
liable to pay becomes due and payable on:
(a) 1 November in the financial year immediately following the last
contribution year; or
(b) such later day as is specified in the regulations either generally for
all people or for the class of people that includes the person, as the case may
be.
14 Subsections 62(7) and (8)
Repeal the subsections, substitute:
(7) If, before the deferred payment day worked out under
subsection (4), either:
(a) the person dies; or
(b) the person becomes exempt because of turning a particular
age;
the payment becomes due and payable immediately after the person dies or
turns that age.
15 Saving provision
The repeal and substitution of subsection 62(7) of the Medical Indemnity
Act 2002 by this Act does not affect when a UMP support payment, to which
that subsection applied before that repeal and substitution, becomes due and
payable.
16 Subsection 135A(24) (paragraph (b) of the
definition of medical indemnity legislation)
Repeal the paragraph, substitute:
(b) the Medical Indemnity (Run-off Cover Support Payment) Act 2004;
and
Medical Indemnity
(Prudential Supervision and Product Standards) Act 2003
1 Subsection 4(1)
Insert:
MDO has the same meaning as in the Medical Indemnity Act
2002.
2 Subsection 4(1)
Insert:
medical indemnity insurer has the same meaning as in the
Medical Indemnity Act 2002.
3 After section 7
Insert:
In deciding whether the premium payable by an insured under a contract of
insurance for particular cover is reasonable, regard is to be had to:
(a) the nature of the risks being assumed by the insurer; and
(b) the claims handling expenses, and other administrative expenses, the
insurer has incurred and can reasonably be expected to incur; and
(c) the expenses the insurer can reasonably be expected to incur in
obtaining appropriate reinsurance; and
(d) the expenses the insurer can reasonably be expected to incur in
capital raising and prudential compliance; and
(e) the amount that represents a reasonable profit margin for the insurer;
and
(f) the amount of any relevant taxes or statutory charges payable by the
insurer; and
(g) the information provided, or not provided, to the insurer by the
client in relation to matters relevant to assessing the risk being assumed by
the insurer; and
(h) the amount that represents provisioning for future liabilities for
medical indemnity cover that may be required to be offered under section 23
for a premium that does not reflect the cost of providing that medical indemnity
cover; and
(i) the receipt, or probable receipt, of Commonwealth assistance in
relation to provision of the medical indemnity cover; and
(j) such other matters as are specified in regulations made for the
purposes of this paragraph.
4 After subsection 22(1A)
Insert:
(1B) Strict liability applies to subparagraph (1)(c)(iii) to the
extent that it relates to whether the premium referred to in paragraph 24(2)(f)
is reasonable.
Note: For strict liability, see
section 6.1 of the Criminal Code.
5 Paragraph 24(2)(f)
Repeal the paragraph, substitute:
(f) if the offer is made for the purposes of section 22—the
premium payable by the client for the cover being offered is reasonable (see
section 7A); and
(fa) if the offer is made for the purposes of section 23—the
premium payable by the client for the cover does not exceed the amount specified
in, or worked out in accordance with, the regulations; and
6 Subsection 24(3)
Repeal the subsection, substitute:
Premiums for run-off cover
(3) Regulations made for the purposes of paragraph (2)(fa) may
specify different amounts, or different ways of working out amounts, in relation
to different classes of practitioners or different classes of insurance
contracts.
(4) An amount specified in regulations made for the purposes of
paragraph (2)(fa) may be a nil amount.
7 Section 25
Repeal the section.
8 Subsection 26(1)
Omit “or ASIC”, substitute “, ASIC or the Minister
administering the Medical Indemnity Act 2002”.
9 After Division 2 of
Part 3
Insert:
Offence—compulsory provision of medical indemnity
cover
(1) A person (the insurer) commits an offence if:
(a) the insurer is a medical indemnity insurer; and
(b) the insurer, or another medical indemnity insurer, has provided
medical indemnity cover for a medical practitioner (the
practitioner) who is an eligible practitioner; and
(c) the insurer:
(i) is the last medical indemnity insurer to have provided medical
indemnity cover for the practitioner in relation to incidents occurring during a
medical practice period of the practitioner; or
(ii) has taken over that last medical indemnity insurer; and
(d) the insurer does not provide medical indemnity cover for the
practitioner that satisfies all of the requirements of subsection (4);
and
(e) in a case where a termination date has been set for the purposes of
subsection 34ZB(3) of the Medical Indemnity Act 2002—the
insurer’s failure to provide that medical indemnity cover occurs before
that date.
Penalty: Imprisonment for 12 months.
(2) The medical indemnity cover referred to in
paragraph (1)(b):
(a) may be medical indemnity cover provided to the practitioner or to
someone else; and
(b) need not be medical indemnity cover provided while the practitioner
was an eligible practitioner.
When a medical indemnity insurer is taken over
(3) The reference in paragraph (1)(c) to a medical indemnity insurer
having taken over another medical indemnity insurer is a reference to it having
assumed some or all of the financial responsibility for claims:
(a) that are claims in relation to incidents that occurred in the course
of, or in connection with, the practitioner’s practice as a medical
practitioner; and
(b) with which the other medical indemnity insurer would, but for that
assumption of responsibility, have been concerned because of the other medical
indemnity insurer having provided medical indemnity cover to the
person.
Requirements for medical indemnity cover
(4) Medical indemnity cover meets the requirements of this subsection
if:
(a) it covers incidents that occurred while the practitioner:
(i) had medical indemnity cover provided by the insurer or any other
medical indemnity insurer, or (subject to subsection (6)) by an MDO;
and
(ii) was registered or licensed as a medical practitioner under a State or
Territory law that provides for the registration or licensing of medical
practitioners; and
(b) the nature and range of incidents it covers is at least the same as
the nature and range of incidents covered by the last medical indemnity cover
provided for the practitioner; and
(c) the contract of insurance under which the medical indemnity cover is
provided satisfies subparagraph 34E(1)(e)(ii) of the Medical Indemnity Act
2002; and
Note: Subparagraph 34E(1)(e)(ii) of the Medical Indemnity
Act 2002 requires that the practitioner’s contract limit (see
section 34B of that Act) equals or exceeds the relevant threshold under
section 34F of that Act.
(d) it is provided on such terms and conditions (if any) determined in
writing by the Minister administering the Medical Indemnity Act 2002;
and
(e) it provides cover until the practitioner ceases to be an eligible
practitioner; and
(f) no premium or other consideration is payable for the medical indemnity
cover by the person to whom it is provided.
(5) A determination under paragraph (4)(d) is a disallowable
instrument for the purposes of section 46A of the Acts Interpretation
Act 1901.
(6) Subparagraph (4)(a)(i) applies to medical indemnity cover
provided by an MDO only if that cover would have been claims-made cover within
the meaning of subsections 6(2) and (3) of this Act if it had been provided for
by a contract of insurance.
Practitioner etc. need not apply for medical indemnity
cover
(7) The obligation under subsection (1) to provide medical indemnity
cover applies whether or not the practitioner, or any other person, has applied
to the insurer for the medical indemnity cover.
Effect of subsection (1)
(8) Subsection (1) has effect subject to section 116 of the
Insurance Act 1973.
Note: This means that an insurer does not have to provide
medical indemnity cover under subsection (1) once the winding up of the
insurer has started.
Definitions
(9) In this section:
eligible practitioner means a person to whom subsection
34ZB(2) of the Medical Indemnity Act 2002 applies.
medical practice period, of an eligible practitioner,
means:
(a) in any case—the period during which the practitioner was not an
eligible practitioner; and
(b) if:
(i) the practitioner was engaged in private medical practice at the time
the practitioner was an eligible practitioner; and
(ii) all of the medical services provided in the course of that medical
practice were services provided free of charge; and
(iii) the practitioner is no longer engaged in that medical
practice;
the period during which the practitioner was engaged in that medical
practice.
Note: This definition, and the obligation under
subsection (1) to provide medical indemnity cover, can apply more than once
in relation to the same eligible practitioner.
private medical practice has the same meaning as in
section 34ZB of the Medical Indemnity Act 2002.
Offence—MDOs must arrange run-off cover
(1) A person (the organisation) commits an offence
if:
(a) the organisation is an MDO; and
(b) the organisation, or another MDO, has provided medical indemnity cover
for a medical practitioner (the practitioner) who is an eligible
practitioner; and
(c) the organisation is not providing medical indemnity cover for the
practitioner that complies with subsection 26A(4), or that would comply with
that subsection if it were provided by a medical indemnity insurer under a
contract of insurance; and
(d) there is no medical indemnity insurer that is obliged under subsection
26A(1) to provide medical indemnity cover for the practitioner; and
(e) the organisation:
(i) is the last MDO to have provided relevant medical indemnity cover for
the practitioner in relation to incidents occurring during a medical practice
period of the practitioner; or
(ii) has taken over that last MDO; and
(f) the organisation does not have an arrangement with a medical indemnity
insurer under which the medical indemnity insurer is obliged to provide medical
indemnity cover for the practitioner that satisfies all of the requirements of
subsection 26A(4); and
(g) in a case where a termination date has been set for the purposes of
subsection 34ZB(3) of the Medical Indemnity Act 2002—the
MDO’s failure to have such an arrangement occurs before that
date.
Penalty: Imprisonment for 12 months.
(2) The medical indemnity cover referred to in
paragraph (1)(b):
(a) may be medical indemnity cover provided to the practitioner or to
someone else; and
(b) need not be medical indemnity cover provided while the practitioner
was an eligible practitioner.
When an MDO is taken over
(3) The reference in paragraph (1)(e) to an MDO having taken over
another MDO is a reference to it having assumed some or all of the financial
responsibility for claims:
(a) that are claims in relation to incidents that occurred in the course
of, or in connection with, the practitioner’s practice as a medical
practitioner; and
(b) with which the other MDO would, but for that assumption of
responsibility, have been concerned because of the other MDO having provided
medical indemnity cover to the person.
Definitions
(4) In this section:
eligible practitioner means a person to whom subsection
34ZB(2) of the Medical Indemnity Act 2002 applies.
medical practice period, of an eligible practitioner, has the
same meaning as in section 26A of this Act.
Offence—compulsory provision of medical indemnity
cover
(1) A person (the insurer) commits an offence if:
(a) the insurer is a medical indemnity insurer; and
(b) the insurer is obliged, under an arrangement of the kind referred to
in paragraph 26B(1)(f), to provide medical indemnity cover for a medical
practitioner; and
(c) the insurer does not provide medical indemnity cover for the
practitioner that satisfies all of the requirements of subsection 26A(4);
and
(d) in a case where a termination date has been set for the purposes of
subsection 34ZB(3) of the Medical Indemnity Act 2002—the
insurer’s failure to provide that medical indemnity cover occurs before
that date.
Penalty: Imprisonment for 12 months.
(2) The medical indemnity cover referred to in
subsection (1):
(a) may be medical indemnity cover provided to the practitioner or to
someone else; and
(b) need not be medical indemnity cover provided while the practitioner
was an eligible practitioner.
Practitioner etc. need not apply for medical indemnity
cover
(3) The obligation under subsection (1) to provide medical indemnity
cover applies whether or not the practitioner, or any other person, has applied
to the insurer for the medical indemnity cover.
Effect of subsection (1)
(4) Subsection (1) has effect subject to section 116 of the
Insurance Act 1973.
Note: This means that an insurer does not have to provide
medical indemnity cover under subsection (1) once the winding up of the
insurer has started.
Offences—giving notice
(1) A person (the insurer) commits an offence if:
(a) the insurer provides medical indemnity cover under subsection 26A(1)
or 26C(1); and
(b) the insurer does not give to the person to whom the cover is provided
a written notice stating:
(i) the nature and range of incidents it covers; and
(ii) the terms and conditions on which it is provided.
Penalty: Imprisonment for 6 months.
(2) A person (the insurer) commits an offence if:
(a) the insurer provides medical indemnity cover under subsection 26A(1)
or 26C(1); and
(b) the insurer does not give to the Health Insurance Commission a written
notice stating:
(i) the name of the practitioner for whom the medical indemnity cover is
provided; and
(ii) the date from which the medical indemnity cover took effect;
and
(iii) such other matters as are determined in writing by the Minister
administering the Medical Indemnity Act 2002.
Penalty: Imprisonment for 6 months.
(3) A determination under subparagraph (2)(b)(iii) is a disallowable
instrument for the purposes of section 46A of the Acts Interpretation
Act 1901.
Offence—record-keeping
(4) A person (the insurer) commits an offence if:
(a) the insurer provides medical indemnity cover under subsection 26A(1)
or 26C(1); and
(b) the insurer gives written notice as required by subsection (1) of
this section to the person to whom the cover is provided; and
(c) the insurer does not keep a copy of the notice for the period starting
when the notice is given and ending 5 years after the insurer ceases to provide
the cover.
Note: Paragraph 26A(4)(d) sets out the period for which the
insurer must provide the cover.
Penalty: Imprisonment for 6 months.
(1) If the insurer provides medical indemnity cover under section 26A
or 26C, there is taken, for all purposes (other than the purposes specified in
the regulations), to be a contract of insurance between:
(a) the insurer; and
(b) the person to whom the medical indemnity cover is provided;
under which the medical indemnity cover is provided.
(2) This section applies:
(a) despite the insurer not receiving any premium or other consideration
for providing the medical indemnity cover; and
(b) whether or not the medical indemnity cover was provided by means of
the person to whom it was provided accepting an offer from the insurer to
provide it.
(1) If the Federal Court of Australia is satisfied that an insurer has
engaged in, or is proposing to engage in, conduct that constitutes a
contravention of subsection 26A(1) or 26C(1), the Court may grant an injunction
requiring the insurer to provide medical indemnity cover in accordance with that
subsection.
(2) If the Federal Court of Australia is satisfied that an MDO has engaged
in, or is proposing to engage in, conduct that constitutes a contravention of
subsection 26B(1), the Court may grant an injunction requiring the MDO to enter
into an arrangement of a kind referred to in paragraph 26B(1)(f).
(3) An order under this section may be made only after an application
by:
(a) the practitioner; or
(b) ASIC; or
(c) the Minister administering the Medical Indemnity Act
2002.
(1) To avoid doubt, subsection 4B(3) of the Crimes Act 1914 applies
to any offence against a provision of this Division committed by a body
corporate, as if an offence against that provision could be committed by a
natural person.
(2) This section does not affect the meaning of any other offence against
this Act.
1 Subsection 4(1)
Insert:
IBNR Claims Protocol means the protocol (as amended and in
force from time to time) determined by the Minister under
section 27A.
2 Subsection 4(1) (at the end of the definition of
IBNR indemnity)
Add:
Note: Amounts payable under the IBNR Claims Protocol are not
covered by this definition.
3 After subsection 10(1)
Insert:
(1A) This Division also provides for the determination of an IBNR Claims
Protocol that can deal with other matters relating to claims in relation to
incidents covered by the IBNR indemnity scheme.
4 Subsection 10(2) (after table
item 6)
Insert:
|
6A |
the IBNR Claims Protocol, and what it can deal with |
sections 27A and 27B |
5 At the end of Division 1 of
Part 2
Add:
(1) The Minister may, by writing, determine a protocol (the IBNR
Claims Protocol) for:
(a) making payments to MDOs and insurers of claim handling fees;
and
(b) making payments on account of legal, administrative or other costs
incurred by MDOs and insurers (whether on their own behalf or
otherwise);
in respect of claims relating to incidents covered by the IBNR indemnity
scheme (see section 14).
(2) Without limiting subsection (1), the IBNR Claims Protocol
may:
(a) make provision for:
(i) the conditions that must be satisfied for an amount to be payable to
an MDO or insurer; and
(ii) the amount that is payable; and
(iii) the conditions that must be complied with by an MDO or insurer to
which an amount is paid; and
(iv) other matters related to the making of payments, and the recovery of
overpayments; and
(b) provide that this Division applies with specified modifications in
relation to a liability that relates to costs in relation to which an amount has
been paid under the Protocol.
(3) Paragraph (2)(b) does not allow the IBNR Claims Protocol to
modify a provision that creates an offence, or that imposes an obligation which,
if contravened, constitutes an offence.
(4) The IBNR Claims Protocol may also provide for other matters of a kind
specified in regulations made for the purposes of this subsection.
(5) The instrument determining the IBNR Claims Protocol, and any
instruments amending or revoking the Protocol, are disallowable instruments for
the purposes of section 46A of the Acts Interpretation Act
1901.
(1) If the HIC believes that a person is capable of giving information
that is relevant to determining:
(a) whether an MDO or insurer is entitled to a payment under the IBNR
Claims Protocol; or
(b) the amount that is payable to an MDO or insurer under the IBNR Claims
Protocol;
the HIC may request the person to give the HIC the information.
Note: Failure to comply with the request is an offence (see
section 45).
(2) Without limiting subsection (1), any of the following persons may
be requested to give information under that subsection:
(a) an MDO;
(b) an insurer;
(c) a member or former member of an MDO;
(d) a person who practises, or used to practise, a medical
profession;
(e) a person who is acting, or has acted, on behalf of a person covered by
paragraph (d);
(f) a legal personal representative of a person covered by
paragraph (c), (d) or (e).
(3) Without limiting subsection (1), if the information sought by the
HIC is information relating to a matter in relation to which a person is
required by section 39 to keep a record, the HIC may request the person to
give the information by giving the HIC the record, or a copy of the
record.
(4) The request:
(a) must be made in writing; and
(b) must state what information must be given to the HIC; and
(c) may require the information to be verified by statutory declaration;
and
(d) must specify a day on or before which the information must be given;
and
(e) must contain a statement to the effect that a failure to comply with
the request is an offence.
The day specified under paragraph (d) must be at least 28 days after
the day on which the request was made.
6 Subsection 39(1)
After “payment under”, insert “the IBNR Claims
Protocol,”.
7 After subparagraph
39(2)(b)(i)
Insert:
(ia) if the record is required to be kept because the person applied for a
payment under the IBNR Claims Protocol—the day on which the Protocol took
effect;
8 After paragraph 45(1)(b)
Insert:
(baa) subsection 27B(1); or
9 After paragraph 48(a)
Insert:
(aa) amounts payable under the IBNR Claims Protocol; and
Medical Indemnity (Enhanced
UMP Indemnity) Contribution Act 2002
1 The whole of the Act
Repeal the Act.
1 Subsection 4(1) (definition of medical
indemnity insurer)
Repeal the definition, substitute:
medical indemnity insurer means:
(a) a body corporate authorised under section 12 of the Insurance
Act 1973 that; or
(b) a Lloyd’s underwriter within the meaning of that Act
who;
in carrying on insurance business in Australia, enters into contracts of
insurance providing medical indemnity cover for other persons.
1A Paragraph 30(1)(d)
After “practitioner”, insert “, or becomes aware of the
incident”.
2 Paragraph 34E(1)(c)
Before “either”, insert “except in the circumstances
specified in regulations made for the purposes of this
paragraph,”.
3 Subsection 43(1)
Omit “both”, substitute “more”.
4 After paragraph 43(1)(a)
Insert:
(aa) making payments to:
(i) medical practitioners; or
(ii) medical indemnity insurers and MDOs on behalf of medical
practitioners;
to help those medical practitioners meet the cost of paying medical
indemnity payments;
5 Paragraphs 66A(5)(a) and (b)
Repeal the paragraphs, substitute:
(a) on that payment day; or
(b) 7 days after the day on which the amount is paid;
whichever is later.
6 Paragraph 66A(7)(a)
Omit “invest the amount on deposit”, substitute “deposit
the amount in an interest bearing account”.
Medical Indemnity
(Prudential Supervision and Product Standards) Act 2003
7 Subsection 4(1)
Insert:
Lloyd’s underwriter has the same meaning as in the
Insurance Act 1973.
8 Subparagraph 10(2)(c)(i)
Omit “not a general insurer”, substitute “neither a
general insurer nor a Lloyd’s underwriter”.
9 Subparagraph 11(1)(d)(i)
Omit “not a general insurer”, substitute “neither a
general insurer nor a Lloyd’s underwriter”.
10 Subsection 26(1)
Omit “an insurer contravenes”, substitute “the Federal
Court of Australia is satisfied that an insurer has engaged in, or is proposing
to engage in, conduct that constitutes a contravention of”.
11 Subsection 26(1)
Omit “the Federal Court of Australia”, substitute “the
Court”.
12 Subsection 26(1)
Omit “ordering”, substitute “requiring”.
13 Subsection 26(2)
After “order”, insert “granting the
injunction”.
Medical Indemnity
(Prudential Supervision and Product Standards) Regulations
2003
14 Paragraph 4(1)(aa)
Repeal the paragraph.
(73/04)