Medical Indemnity (Run-off Cover Support Payment) Regulations 2004
Statutory Rules 2004 No. 204 as amended
made under the
Medical Indemnity (Run-off Cover Support Payment) Act 2004
This compilation was prepared on 20 December 2005
taking into account amendments up to SLI 2005 No. 314
Prepared by the Office of Legislative Drafting and Publishing,
Attorney-General’s Department, Canberra
Contents
1 Name of Regulations [see Note 1]
2 Commencement
3 Definitions
4 Contribution year — AMIL
5 Amount of run-off cover support payment — AMIL
6 Amount of run-off cover support payment — other medical indemnity insurers
7 Amount by which premium income is reduced
Notes
1 Name of Regulations [see Note 1]
These Regulations are the Medical Indemnity (Run-off Cover Support Payment) Regulations 2004.
2 Commencement
These Regulations commence on 1 July 2004.
3 Definitions
In these Regulations:
Act means the Medical Indemnity (Run-off Cover Support Payment) Act 2004.
AMIL means Australasian Medical Insurance Limited.
4 Contribution year — AMIL
For paragraph 5 (1) (b) of the Act, each calendar year that starts on or after 1 January 2005 is a contribution year for AMIL.
5 Amount of run-off cover support payment — AMIL
(1) This regulation applies only to AMIL.
(2) For paragraph 6 (1) (b) of the Act, the period of 12 months ending on 30 November in the contribution year is specified.
(3) For paragraph 6 (2) (b) of the Act, the percentage of 9.5625% is specified for the contribution years beginning on 1 January 2005, 1 January 2006, 1 January 2007 and 1 January 2008.
6 Amount of run-off cover support payment — other medical indemnity insurers
(1) This regulation applies to medical indemnity insurers other than AMIL.
(2) For paragraph 6 (2) (b) of the Act, the percentage of 8.5% is specified for the contribution years beginning on 1 July 2004, 1 July 2005, 1 July 2006 and 1 July 2007.
7 Amount by which premium income is reduced
(1) This regulation specifies a kind of amount for the purposes of subsection 7 (2) of the Act.
(2) The amount is the amount of refund payable by a medical indemnity insurer to a medical practitioner in respect of an overpayment of a premium for medical indemnity cover (whether or not the overpayment was made during the period for which the insurer’s premium income is being calculated).
Note Under subsection 7 (2) of the Act, the amount of a medical indemnity insurer’s premium income for a period under subsection 7 (1) of the Act is reduced by the sum of all amounts of the kind specified in this regulation payable during the period.
Notes to the Medical Indemnity (Run-off Cover Support Payment) Regulations 2004
Note 1
The Medical Indemnity (Run-off Cover Support Payment) Regulations 2004 (in force under the Medical Indemnity (Run-off Cover Support Payment) Act 2004) as shown in this compilation comprise Statutory Rules 2004 No. 204 amended as indicated in the Tables below.
Under the Legislative Instruments Act 2003, which came into force on 1 January 2005, it is a requirement for all non-exempt legislative instruments to be registered on the Federal Register of Legislative Instruments. From 1 January 2005 the Statutory Rules series ceased to exist and was replaced with Select Legislative Instruments (SLI series). Numbering conventions remain the same, ie Year and Number.
Table of Instruments
Year and
Number | Date of notification
in Gazette or FRLI registration | Date of
commencement | Application, saving or
transitional provisions |
2004 No. 204 | 25 June 2004 | 1 July 2004 | |
2005 No. 314 | 19 Dec 2005 (see F2005L04108) | 1 July 2004 | — |
Table of Amendments
ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted |
Provision affected | How affected |
R. 7................. | am. 2005 No. 314 |
Overview
The Medical Indemnity (Run-off Cover Support Payment) Regulations 2004, enacted under the Medical Indemnity (Run-off Cover Support Payment) Act 2004, were introduced to provide a financial support mechanism for medical indemnity insurers as they transition from underwriting new risks to managing existing claims. This legislative instrument was created to address the gap in financial stability for medical indemnity insurers, particularly in the context of the run-off period, which is the phase when insurers cease to write new business and focus on settling existing claims. The objective of these regulations is to ensure that medical indemnity insurers, including Australasian Medical Insurance Limited (AMIL), receive adequate support payments to maintain their financial viability during this critical transition phase. The regulations are administered by the relevant federal authority and are intended to provide a structured financial relief system to protect both the insurers and the medical practitioners they insure.
Scope and Application
The Medical Indemnity (Run-off Cover Support Payment) Regulations 2004 apply to medical indemnity insurers within Australia, specifically targeting Australasian Medical Insurance Limited (AMIL) and other medical indemnity insurers. These regulations were made under the Medical Indemnity (Run-off Cover Support Payment) Act 2004 and came into effect on 1 July 2004. They provide specific details on the amount of run-off cover support payments for different insurers over designated contribution years. For AMIL, the regulation specifies a percentage of 9.5625% for the contribution years starting from 1 January 2005 to 1 January 2008, while for other insurers, the percentage is 8.5% for years starting from 1 July 2004 to 1 July 2007. These regulations also outline the reduction in premium income by the amount of refund payable to medical practitioners for overpayments of premiums. The application of these regulations is limited to Australia and is subject to amendments as indicated in the Statutory Rules 2004 and subsequent Select Legislative Instruments.
Key Provisions
The Medical Indemnity (Run-off Cover Support Payment) Regulations 2004, which were made under the Medical Indemnity (Run-off Cover Support Payment) Act 2004, provide specific details on the implementation and administration of the support payments for medical indemnity. Regulation 4 defines a "contribution year" for Australasian Medical Insurance Limited (AMIL) as each calendar year starting from 1 January 2005 (Reg. 4). Regulation 5 specifies that for AMIL, the support payment for a contribution year is calculated over the 12 months ending on 30 November and is set at 9.5625% for the years 2005 to 2008 (Reg. 5(2)-(3)). For other medical indemnity insurers, the support payment percentage is set at 8.5% for the contribution years beginning on 1 July 2004 to 1 July 2007 (Reg. 6(2)).
The Regulations impose specific obligations on medical indemnity insurers, requiring them to calculate and remit the specified run-off cover support payments within the defined periods. For AMIL, this entails ensuring that the payments are calculated over the 12-month period ending on 30 November and that the correct percentage is applied for each of the specified years. Other insurers must similarly ensure that they adhere to the 8.5% rate for their respective contribution years. Regulation 7 specifies that the premium income of a medical indemnity insurer is reduced by the amount of any refund made to a medical practitioner for overpayments of premiums (Reg. 7(2)).
The Regulations do not explicitly detail offences, penalties, or consequences for non-compliance. However, given the legislative framework under which these Regulations were made, any breach of the Act or its Regulations could potentially result in civil or criminal penalties, depending on the nature and severity of the breach. Under Australian law, non-compliance with legislative instruments can attract fines and other sanctions, and in more severe cases, criminal charges. The specific penalties would be determined by the courts, taking into account the circumstances of the breach.