EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Medical Indemnity (Prudential Supervision and Product Standards) Act 2003
Determination made under paragraph 26D(2)(b)(iii)
Medical Indemnity (Prudential Supervision and Product Standards – Notice of Provision of Run-Off Cover) Determination 2007
1 The Determination to which this explanatory statement relates
This explanatory statement relates to the Determination made under paragraph 26D(2)(b)(iii) of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 (the Act) which commences on the day after it is registered.
2 Purpose of the Determination
The purpose of the Determination is to set out other matters to be provided to Medicare Australia in a written notice by insurers, in addition to the information required in paragraph 26D(2)(b)(i) and (ii) of the Act.
3 Background
The Run-off Cover Scheme (ROCS) was developed to address concerns about the ability of doctors to pay for run-off cover when they ceased practice and no longer earned an income.
The ROCS covers claims for medical indemnity made by eligible practitioners for incidents in their medical practice that occurred while they had medical indemnity cover and which were covered by their last medical indemnity cover.
Insurers are required to provide cover under the ROCS (under sections 26A and 26C of the Act) to doctors who meet the eligibility criteria of the scheme (as set out in sub-section 34ZB(2) of the Medical Indemnity Act 2002).
Information gathered under this instrument will be used by the Australian Government in the management of this scheme and in the annual preparation of the reports on this scheme which the minister is required to table in Parliament under section 34ZW of the Medical Indemnity Act 2002.
Medicare Australia has developed a ROCS Data Transmission Format (DTF) document. This document describes all of the required ROCS data to be transmitted from the insurers to Medicare Australia. It contains instructions and technical information in order for the data to be accepted through the Medicare Australia gateway to their database. The purpose of the Determination is not to replace the DTF nor is it intended to provide the same level of detail as the DTF. The Determination simply defines in broad terms the information to be provided.
4 Consultation
In developing this Determination the medical indemnity industry, the Australian Government Actuary and Medicare Australia have been extensively consulted.
5 Information to be provided under the Determination
Sub-section 26D(2) of the Act requires insurers to give Medicare Australia a written notice stating the name of the doctor to whom they have provided cover under the ROCS; and the date on which this cover took effect.
This Determination describes a range of other matters which should also be provided to Medicare Australia by insurers in these written notices including:
- which of the eligibility criteria the doctor met (under sub-section 34ZB(2) of the Medical Indemnity Act 2002)
- general information about the doctor;
- the level of medical indemnity cover provided; and
- information about the doctor’s last three periods of insurance (before the insurer provided cover under sub-sections 26A(1)or 26C(1) of the Act).
6 Timing for the provision of information to Medicare Australia
Insurers should provide information to Medicare Australia within the notification period of 61 days starting on the day after the day on which the insurer provides cover to a doctor under sub-sections 26A(1) or 26C(1) of the Act.
The same insurer may provide cover to the same doctor under sub-sections 26A(1) or 26C(1) of the Act on more than one occasion in respect to different medical practice periods.
7 Details of Determination
Section 1 – Name of Determination
This section provides that the title of the Determination is the Medical Indemnity (Prudential Supervision and Product Standards – Notice of Provision of Run-Off Cover) Determination 2007.
Section 2 – Commencement
This section provides that the Determination will commence on the day after it is registered.
Section 3 – Definitions
This section establishes the definitions of words and expressions that are used within the Determination. Where a word or expression is common to the Determination and the Act, it has the same definition as given in the Act.
The definition of “written notice” has been defined to mean “electronic data transfer”. The intention is that data will be sent to Medicare Australia electronically as specified in the Data Transmission Format document
Section 4 – Notification of matters in relation to eligible practitioners
This section sets out the other matters that insurers should state in the written notice to be provided to Medicare Australia in addition to those listed in s 26D(2)(i) and (ii) of the Act.