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2002
THE
PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
MEDICAL INDEMNITY
BILL 2002
SUPPLEMENTARY EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister
for Health and Ageing,
Senator the Hon. Kay
Patterson)
MEDICAL INDEMNITY BILL
2002
SUPPLEMENTARY EXPLANATORY
MEMORANDUM
This set of amendments addresses a technical problem with the provisions
of the Bill which include a reference to a person being a member of a medical
defence organisation (MDO) at a time when an incident forming part of the
incurred but not reported (IBNR) liability of the MDO occurred.
Following introduction of the Bill it became apparent that at least one
MDO has a liability in relation to IBNR claims against persons who are now
members of the MDO but who were not members of the MDO when the incident
occurred. This circumstance has arisen because the persons were members of
other MDOs, the membership or business of which was subsequently transferred to
the MDO which now has the liability.
The amendments to affected clauses
generally have the effect of replacing the requirement that a person was a
member of the MDO when the incident occurred with the requirement that the
person has incident-occurring based cover with the MDO for the incident.
The amendments also change the definition of incident-occurring based
cover to include cover provided under an arrangement between the MDO and a
person other than the person who is covered. This deals with the case
where:
• there was an arrangement between a person and another MDO
which has transferred its business to the MDO providing the cover
• the
person has not become a member of the MDO providing the cover, and
• the cover is effectively provided under an arrangement between the
two MDOs.
These amendments have no financial impact.
Item 1
This item amends clause 7, which defines
incident-occurring based cover with an MDO on 30 June 2002, to include cover
provided to a person under an arrangement between an MDO and someone else as
well as cover provided under an arrangement between an MDO and a
person.
Item 2
This item amends clause 8, which defines the
IBNR exposure of an MDO at a particular time, to provide that the IBNR exposure
is the amount that the MDO is likely to have to pay in respect of claims
relating to:
• incidents occurring before 30 June
2002
• in the course of the practice of a medical profession
• by a person covered on 30 June 2002 by incident-occurring
based cover with the MDO for the incident
• which had not been notified
to the MDO at 30 June 2002.
Item 3
This item amends
clause 10, setting out where in the Division particular provisions may be found,
to replace the reference to incidents occurring when a person was a member of a
participating MDO with a reference to incidents covered by incident-occurring
based cover.
Item 4
This item amends clause 14, which
defines which incidents are covered by the IBNR indemnity scheme. It provides
that an incident is covered by the scheme if:
• it took place
before 30 June 2002
• in the course of the practice of a medical
profession
• by a person who had incident-occurring based cover in
relation to the incident with a participating MDO on 30 June 2002, and
• was not notified to the MDO before 30 June 2002.
Item
5
This item amends paragraph 16 (1) (c) to replace the condition of
payability of an IBNR indemnity that the practitioner was a member of a
participating MDO when the incident covered by the scheme occurred with the
requirement that the practitioner had incident-occurring based cover on 30 June
2002 for the incident with a participating MDO.
Item 6
This
item amends paragraph 17 (1) (c) to replace the condition of payability of an
IBNR indemnity that the practitioner was a member of a participating MDO when
the incident covered by the scheme occurred, with the requirement that the
practitioner had incident-occurring based cover on 30 June 2002 for the incident
with a participating MDO.