EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010
Midwife Professional Indemnity (Commonwealth Contribution) Scheme
Rules 2010 (No. 2)
Section 90 of the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 (the Act) provides that the Minister may, by legislative instrument, make rules providing for matters required or permitted by the Act to be provided for in the Rules or necessary or convenient to be provided for in order to carry out or give effect to the Act.
Background
The Act and the Midwife Professional Indemnity (Run-off Cover Support Payment) Act 2010 give effect to the Government’s professional indemnity scheme for eligible midwives which provides for Commonwealth support for professional indemnity insurance for a certain class of midwives who have been unable to access insurance since 2002 and opens the way forward for improving access to maternity services.
Under Part 2 of Chapter 2 of the Act, a contribution will be paid by the Commonwealth to an insurer if certain criteria, set out in, or under, the Act, are met. One of the criteria that must be met for a Level 1 or Level 2 Commonwealth contribution to be paid is that the Medicare Australia CEO must certify that the claim is a qualifying claim under section 11 of the Act. A claim must satisfy the common requirements in subsection 11(3) for a Level 1 or Level 2 qualifying claim certificate to be issued by the Medicare Australia CEO.
Part 3 of Chapter 2 of the Act deals with run-off cover Commonwealth contributions. Section 31 sets out the eligibility requirements for an eligible run-off claim.
These Rules are required to ensure that certain self-employed midwives are included in the definition of 'eligible midwives' for the purposes of meeting the common requirements for a qualifying claim set out in Section 11(3) of the Act. Section
11(3) (g) of the Act provides that a Commonwealth Contribution cannot be paid in relation to claims made against midwives who are employees where the claim relates to an incident occurring in the course of, or in connection with, their employment (employed midwives are generally covered by the vicarious liability insurance arrangements of their employers).
These Rules allow for midwives who are employed via a company that they own, either solely or jointly with other midwives, to access the Commonwealth schemes. If these Rules did not have effect, self employed midwives may have claims against them, which are otherwise eligible claims, refused. This would mean that any resulting liability would fall to the midwife, instead of the insurer and the Commonwealth. This outcome was not intended when the Act was originally drafted.
The Rules commenced on 1 July 2010.
The Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Details of the Rules are set out in the Attachment.
Consultation
The government has consulted with Medicare Australia, the Chief Nurse and Midwifery Officer, the Medical Insurance Group Australia and representatives of midwives’ organisations.
ATTACHMENT
DETAILS OF THE MIDWIFE PROFESSIONAL INDEMNITY (COMMONWEALTH CONTRIBUTION) SCHEME RULES 2010 (No. 2)
1. Name of Rules
Rule 1 sets out the name of the Rules.
2. Commencement
Rule 2 sets out that the Rules commence on 1 July 2010.
3. Interpretation
Rule 3 sets out the definitions used in the Rules.
4. Claims by eligible midwives
Rule 4 clarifies that claims made in relation to eligible midwives who practise effectively as self employed midwives through a company, are not excluded from eligibility from either the Level 1 and Level 2 contribution or the run-off cover contribution because of that practise. The rule relates only to companies where all owners and directors are practising midwives.
Overview
The Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 was enacted to address the problem of midwives being unable to access professional indemnity insurance since 2002, thus affecting their ability to provide maternity services. This legislation was introduced by the Australian Parliament and aims to provide Commonwealth support for professional indemnity insurance for eligible midwives. Through the Act, a contribution will be paid by the Commonwealth to an insurer if specific criteria are met, including certification by the Medicare Australia CEO that the claim is a qualifying claim. The accompanying Midwife Professional Indemnity (Commonwealth Contribution) Scheme Rules 2010 (No. 2) further refine the eligibility of midwives for these contributions, particularly clarifying that midwives who are employed through a company they own are still eligible for the Commonwealth schemes.
These Rules ensure that self-employed midwives, who are effectively practising through a company owned by practising midwives, are included in the definition of 'eligible midwives'. This clarification prevents otherwise eligible claims from being refused, which would otherwise place the financial liability on the midwife rather than the insurer and the Commonwealth. The Rules were developed following consultations with various stakeholders, including Medicare Australia, the Chief Nurse and Midwifery Officer, the Medical Insurance Group Australia, and representatives of midwives’ organisations, and they commenced on 1 July 2010.
Scope and Application
The Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010, as amended by the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Rules 2010 (No. 2), is designed to support professional indemnity insurance for midwives who have been unable to access insurance since 2002, thereby improving access to maternity services. The Act applies to eligible midwives, which now includes those who practise effectively as self-employed midwives through a company, provided all owners and directors are practising midwives. This expansion of eligibility ensures that midwives who might otherwise be excluded due to their employment status can still access the Commonwealth's support for professional indemnity insurance. The scheme provides for Commonwealth contributions to insurers if certain criteria are met, including certification by the Medicare Australia CEO that the claim is a qualifying claim. The geographic reach of the Act is national, applying across all states and territories of Australia. Notably, the Act excludes claims made by employed midwives in relation to incidents occurring in the course of their employment, as these midwives are generally covered by their employers' vicarious liability insurance. The Rules, which came into effect on 1 July 2010, are legislative instruments under the Legislative Instruments Act 2003 and have been developed following consultations with relevant stakeholders including Medicare Australia, the Chief Nurse and Midwifery Officer, the Medical Insurance Group Australia, and representatives of midwives’ organisations.
Key Provisions
The Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 (the Act) along with the Midwife Professional Indemnity (Run-off Cover Support Payment) Act 2010, facilitates the Commonwealth’s support for professional indemnity insurance for eligible midwives who have faced difficulties in accessing insurance since 2002. The Act specifically includes provisions for the payment of Commonwealth contributions to insurers under certain conditions, detailed in Part 2 of Chapter 2 (Section 90). For instance, a Level 1 or Level 2 Commonwealth contribution can be made if the Medicare Australia CEO certifies that the claim is a qualifying claim under section 11 of the Act. These contributions are contingent on meeting the common requirements outlined in subsection 11(3), which mandates that claims must be certified by the Medicare Australia CEO as qualifying claims.
The Midwife Professional Indemnity (Commonwealth Contribution) Scheme Rules 2010 (No. 2) were created to address specific eligibility criteria for midwives to access the Commonwealth support schemes. These Rules, which commenced on 1 July 2010, were formulated to ensure that certain self-employed midwives are included in the definition of 'eligible midwives'. Rule 4 of the Rules explicitly states that claims made by eligible midwives who practice effectively as self-employed midwives through a company are not excluded from eligibility for either the Level 1 and Level 2 contribution or the run-off cover contribution, provided that all owners and directors of the company are practising midwives. This ensures that midwives who operate through a company they own or co-own are not inadvertently excluded from the support schemes, which was an unintended outcome of the original Act.
The Rules impose specific obligations on the parties involved, primarily ensuring that the definition of 'eligible midwives' is correctly applied and that claims meeting the criteria set out in the Act and the Rules are eligible for Commonwealth contributions. This involves the certification process by the Medicare Australia CEO and the adherence to the common requirements set forth in section 11(3) of the Act. These obligations ensure that the intended support is provided to the appropriate class of midwives without inadvertently excluding those who are self-employed but operate through a company.
Breach of the provisions set out in the Act and the Rules could result in legal consequences. While the Act and the Rules themselves do not specify particular offences or penalties for non-compliance, any failure to adhere to the eligibility criteria or the certification process could potentially lead to claims being denied. Such denials could result in midwives facing personal liability for claims that would otherwise be covered by the Commonwealth and the insurer. Therefore, adherence to the rules and obligations is critical to avoid unintended personal financial exposure for midwives.