Commonwealth Numbered Regulations - Explanatory Statements

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MEDICAL INDEMNITY (PRUDENTIAL SUPERVISION AND PRODUCT STANDARDS) AMENDMENT REGULATIONS 2005 (NO. 1) (SLI NO 12 OF 2005)

EXPLANATORY STATEMENT

Select Legislative Instrument 2005 No. 12

Issued by the Minister for Revenue and Assistant Treasurer

Medical Indemnity (Prudential Supervision and Product Standards) Act 2003

Medical Indemnity (Prudential Supervision and Product Standards) Amendment Regulations 2005 (No. 1)

Subsection 33(1) of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The Act ensures that providers of medical indemnity cover are subject to appropriate prudential supervision by the Australian Prudential Regulation Authority, by providing that only authorised insurers can provide medical indemnity cover to health care professionals, and only under contracts of insurance.  It also sets product standards for the cover that those insurers are required to offer to medical practitioners.  One of these standards is that insurers are required to offer run-off cover to eligible medical practitioners under the run-off cover scheme.

The Government introduced a guaranteed run-off cover scheme to provide security of cover to doctors who have permanently retired from private medical practice or gone on maternity leave.  Outside that scheme doctors have access to free cover for up to three years if they meet specified membership qualifying periods; insurers are required to offer run‑off cover at cost in all other circumstances.

Regulation 8 of the Medical Indemnity (Prudential Supervision and Product Standards) Regulations 2003 (the Regulations) explains when and to whom insurers are required to make an additional offer of run-off cover where a doctor retires aged less than 65.  It prescribes the event requiring the insurer to offer run‑off cover and events ending that requirement.  The new regulations amend regulation 8 by altering ‘medical practice’ where it appears to ‘private medical practice’.  Regulation 3 defines the term ‘private medical practice’.

The purpose of the new regulations is to clarify that the requirement to offer run‑off cover begins when a doctor ceases private medical practice and will end if the doctor resumes private medical practice.

The Regulations also exempt certain arrangements from the application of the Act, allowing health care professionals to obtain cover that would otherwise be unavailable or unaffordable.  Some of these exemptions are only intended to be temporary.  The new regulations insert a note at the end of subregulation 4(1) to explain that the exemption of specified arrangements is intended to be temporary.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations commenced on the day after registration on the Federal Register of Legislative Instruments.


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