Medical Indemnity Act 2002
No. 132, 2002
Compilation No. 23
Compilation date: 14 October 2024
Includes amendments: Act No. 38, 2024
About this compilation
This compilation
This is a compilation of the Medical Indemnity Act 2002 that shows the text of the law as amended and in force on 14 October 2024 (the compilation date).
The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law.
Application, saving and transitional provisions for provisions and amendments
If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law.
Self‑repealing provisions
If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.
Contents
Part 1—Preliminary
1 Short title
2 Commencement
3 Objects of this Act and the medical indemnity payment legislation
4 Definitions
5 Medical defence organisation (MDO)
6 Member of an MDO
7 Incident‑occurring based cover
8 IBNR exposure of an MDO
8A Eligible related claims
8B Treatment of deductibles for the exceptional claims indemnity scheme and the allied health exceptional claims indemnity scheme
9 External Territories
Part 2—Commonwealth payments
Division 1—IBNR (incurred but not reported) indemnity scheme
Subdivision A—Introduction
10 Guide to the IBNR indemnity provisions
Subdivision C—Incidents covered by the IBNR indemnity scheme
14 Incidents covered by the IBNR indemnity scheme
Subdivision D—IBNR indemnity
15 IBNR indemnity may be payable under either section 16 or 17
16 IBNR indemnity for payment made by MDO or insurer
17 IBNR indemnity for MDO or insurer in external administration
18 Clarification of circumstances in which IBNR indemnity payable
19 Exceptions
20 Payment partly related to treatment of public patient in public hospital
21 Amount of the IBNR indemnity
Subdivision E—Recovery of amount paid to MDO or insurer after IBNR indemnity paid
24 Recovery if certain amounts paid to MDO or insurer after IBNR indemnity paid
25 MDO or insurer to inform Chief Executive Medicare of certain amounts
26 Chief Executive Medicare to notify MDO or…
Overview
The Medical Indemnity Act 2002 was enacted by the Commonwealth Parliament to address the problem of high costs and risks associated with medical indemnity insurance for practitioners in Australia. The Act aims to contribute towards the availability of medical services by providing Commonwealth assistance to support access by medical practitioners to indemnity arrangements. One of its key policy objectives is to meet part of the costs of large settlements or awards paid by medical defence organisations and insurers, specifically for claims notified after 1 January 2003. The Act also seeks to help medical practitioners meet the cost of their indemnity arrangements through a subsidy scheme and to limit when medical indemnity insurers can refuse to provide cover, thereby ensuring continuity of access to necessary indemnity insurance. The Act applies to medical defence organisations and insurers that were in existence on 30 June 2002 and have been involved in indemnifying medical practitioners for claims arising from incidents occurring before 1 July 2002.
Scope and Application
The Medical Indemnity Act 2002 applies to medical defence organisations (MDOs) and medical indemnity insurers, which are defined as entities that indemnify medical practitioners for claims arising from their practice. The Act extends to the whole of the Commonwealth of Australia, including its external territories, and sets out various indemnity schemes to support medical practitioners and allied health professionals in managing their professional indemnity liabilities. The primary objectives of the Act are to contribute to the availability of medical and allied health services in Australia by providing financial support for large or high-cost claims, ensuring access to indemnity arrangements, and limiting the circumstances under which insurers can refuse to provide cover. The Act also establishes schemes for exceptional claims, run-off cover, and high-cost claims. Certain exclusions apply, such as incidents occurring during treatment of public patients in public hospitals and certain claims specified by regulations. The Act can be extended or modified through subordinate regulations and rules, which are not included in this compilation but can be accessed on the Federal Register of Legislation. Notably, the Act does not apply to State insurance within a State. The administration of the Act, including the payment of indemnities, information requests, and record-keeping obligations, falls to the Chief Executive Medicare. The Act also imposes various administrative, record-keeping, and information-reporting obligations on MDOs, insurers, and medical practitioners, with specific penalties for non-compliance. The Act is subject to amendments and modifications through various legislative acts, with the latest amendments incorporated as of 14 October 2024.
Key Provisions
- The Medical Indemnity Act 2002 (the Act) provides for various indemnity schemes to support medical practitioners in Australia. The main operative sections of the Act establish the IBNR (incurred but not reported) indemnity scheme (sections 14 to 27), the high cost claim indemnity scheme (sections 28 to 34), the exceptional claims indemnity scheme (sections 34A to 34W), the run-off cover indemnity scheme (sections 34ZA to 34ZM), and the allied health exceptional claims indemnity scheme (sections 34ZZI to 34ZZZC). These schemes aim to provide financial support to medical defence organisations (MDOs) and medical indemnity insurers for claims related to medical incidents. For instance, section 16 sets out the basic payability rule for an IBNR indemnity, which may be payable if an MDO or insurer makes a payment in relation to a claim concerning an incident covered by the IBNR indemnity scheme. The Act imposes obligations on MDOs and insurers, such as the requirement to apply for indemnities in writing (sections 36 and 37A), keep relevant records (sections 39 and 40), and notify the Chief Executive Medicare of certain amounts (sections 25, 34J, 34ZK, and 34ZZP). Failure to comply with these obligations can result in criminal and civil penalties. For example, section 45 imposes a penalty of 30 penalty units for failing to provide information when requested, while section 46 imposes a penalty of 30 penalty units for failing to notify the Chief Executive Medicare of a matter within the specified period. Additionally, section 47A penalises a medical indemnity insurer with 30 penalty units for failing to include required information in invoices. These penalties underscore the importance of adhering to the Act's provisions to ensure the smooth administration of the indemnity schemes and the financial stability of the medical indemnity market.
- Area of Law
- Medical Law
- Insurance Law
- Instrument
- Act
- Concepts
- Definitions & Interpretation
- Offence Provisions
- Regulatory Standards
- Enforcement Powers
- Compliance Obligations
- Reporting & Disclosure Obligations
- Delegated & Subordinate Legislation
