Commonwealth Consolidated Acts

MEDICAL INDEMNITY ACT 2002 - SECT 3

             (1)  An object of this Act is to contribute towards the availability of medical services in Australia by providing Commonwealth assistance to support access by medical practitioners to arrangements that indemnify them for claims arising in relation to their practice of their medical professions.

             (2)  The Commonwealth provides that assistance under this Act by:

                     (a)  meeting part of the costs of large settlements or awards paid by organisations that indemnify medical practitioners (but only for claims notified on or after 1 January 2003); and

                    (aa)  meeting the amounts by which settlements and awards exceed insurance contract limits, if those contract limits meet the Commonwealth's threshold requirements; and

                   (ab)  meeting the amounts payable in relation to certain claims (notified on or after 1 July 2004) against medical practitioners who are no longer in private medical practice; and

                     (b)  providing for a subsidy scheme to help certain medical practitioners meet the cost of their indemnity arrangements; and

                     (c)  meeting the cost associated with certain IBNR liabilities of organisations that indemnify medical practitioners to the extent to which those organisations had not made adequate provision for those liabilities as at 30 June 2002.

Note:          The acronym "IBNR" is used in this Act for "incurred but not reported".

             (3)  The Commonwealth provides further assistance in relation to members and former members of UMP under a Medical Indemnity Agreement referred to in the Medical Indemnity Agreement (Financial Assistance--Binding Commonwealth Obligations) Act 2002 .

             (4)  Another object of this Act (together with the medical indemnity payment legislation) is to allow the Commonwealth:

                     (a)  to recover the costs of providing the assistance referred to in paragraph (2)(c) by requiring payments from persons who were members of relevant organisations on 30 June 2000; and

                     (b)  to recover the costs of providing the assistance referred to in paragraph (2)(ab) by requiring payments from medical indemnity insurers; and

                     (c)  to require a payment from medical indemnity insurers to ensure that the assistance referred to in paragraph (2)(c) does not give a competitive advantage to the organisations that receive that assistance.