EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
Midwife Professional Indemnity (Run-off Cover Support Payment) Act 2010
Midwife Professional Indemnity (Run-off Cover Support Payment) Rules 2010
The Midwife Professional Indemnity (Run-off Cover Support Payment) Act 2010 and the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 give effect to the Government’s new professional indemnity scheme for certain midwives. The package was announced during the 2009 Budget by the Government.
The Acts provide Commonwealth support for professional indemnity insurance for midwives who have been unable to access insurance since 2002 and open the way forward for improving access to maternity services.
The Commonwealth has contracted with an insurer to provide affordable insurance to eligible midwives and to develop and maintain a database that the wider insurance market will be able to use in developing longer-term insurance products.
The insurance will be available so that eligible midwives can be insured from 1 July 2010, in line with proposed new arrangements of the National Accreditation and Registration Scheme.
Section 6 of the Midwife Professional Indemnity (Run-off Cover Support Payment) Act 2010 (the Act) sets out the percentage of the insurer's premium income that is imposed as a tax on an eligible insurer in a particular contribution year. The Act defines all relevant terms including terms used in section 6 such as 'premium income', 'eligible insurer', and 'contribution year'.
In paragraph 6(2)(a) of the Act, the percentage of the premium income which an eligible insurer is to pay as a tax is stated to be 15%. Paragraph 6(2)(b) allows a lower percentage to be specified in the Rules.
Rule 4 of the Midwife Professional Indemnity (Run-off Cover Support Payment) Rules 2010 (the Rules), the Minister will change that percentage from 15% to 10% of the eligible insurer's premium income.
The Rules commence on the day after they are registered on the Federal Register of Legislative Instruments.
The Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Consultation
The government has consulted with the insurer (after a national open tender process), the Nursing and Midwifery Board of Australia, the Department of the Treasury and the Australian Government Actuary.