Bills Digest no. 36 2006–07
Legislation Amendment Bill 2006
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Contact Officer & Copyright Details
Medical Indemnity Legislation
Amendment Bill 2006
Date introduced: 13 September 2006
House: House of
Portfolio: Health and Ageing
Commencement: Schedule 1 items 1, 20 and 21 are taken to have
commenced on 1 July 2004, other parts of the schedule commence
on Royal Assent.
This Bill makes some amendments
to the Run Off Cover Scheme (ROCS). ROCS is one of a suite of
measures that was implemented by the Federal Government at the
height of the medical indemnity crisis to improve the affordability
of medical indemnity insurance. The Bill also makes some minor
amendments to other aspects of the medical indemnity regime.
Background to the medical indemnity
crisis and the medical indemnity regime generally can be found in
the following bills digests:
- Medical Indemnity Bill 2002 Bills Digest No. 71
- Medical Indemnity (Prudential Supervision and Product
Standards) Bill 2002 Bills Digest No. 121
- Medical Indemnity Amendment Bill 2003 and Medical Indemnity
(IBNR Indemnity) Contribution Amendment Bill 2003 Bills
Digest No. 64-65 2003-04(3)
- Medical Indemnity Amendment Bill 2004 and Medical Indemnity
(IBNR Indemnity) Contribution Amendment Bill 2004 Bills
Digest No. 99-100 2003-04(4)
- Background to ROCS can be found in the Medical Indemnity
Legislation Amendment (Run-off Cover Indemnity and Other Measures)
Bill 2004 Bills Digest No. 157 2003-04(5)
Level of cover under ROCS
This Bill changes the eligibility criteria for health care
professionals to the ROCS scheme. Item 1 deletes
paragraph 34ZB(1)(c). This removes the requirement currently in the
Act for a health care professional to have had medical indemnity
cover at the time of the incident to be covered by ROCS.
Items 20 and 21 also make the same amendment to
the Medical Indemnity (Prudential Supervision and Product
Standards) Act 2003. This amendment was necessary as insurers
and medical practitioners have often not kept complete records of
their insurance history and hence could not produce evidence to
substantiate the requirement that they held medical indemnity cover
at the time of the incident.
Persons entitled to ROCS are set out in 34ZB(2). They
- a person aged 65 years or over who has retired permanently from
private medical practice;
- a person who has not engaged in private medical practice at any
time during the preceding period of 3 years;
- a person who has ceased (temporarily or permanently) their
practice as a medical practitioner because of maternity;
- person who has ceased their practice as a medical practitioner
because of permanent disability;
- a person who is the legal personal representative of a deceased
person who had been a medical practitioner; and
- a person who is included in a class of persons that the
regulations specify as persons to whom this subsection
Item 3 makes it clear that the time for
determining whether a person falls within one of these categories
is the time the claim is first notified to the MDO or medical
The Bill makes a series of amendments to clarify that the
entitlements to reimbursements under the Medical Indemnity Act
2002 is linked to the ROCS regime which is set up under the
Medical Indemnity (Prudential Supervision and Product
Standards) Act 2003. The amendments are contained in
items 2, 4, 5, 6, 7 and 8.
The Bill amends the Medicare notification period that MDOs and
medical indemnity insurers have when a health care professional
ceases to be covered by ROCS, increasing the period from 28 days to
61 days (item 9).
The period that insurers have to notify Medicare that a
practitioner is covered by the ROCS regime is also increased from
28 days to 61 days (items 22 and 23).
Item 18 changes the offence provisions for
written acceptance of retroactive cover so that where an offer for
insurance does not include retroactive cover, the contract cannot
be entered into until the practitioner has given a response in
writing regarding retroactive cover. The explanatory memorandum to
the bill notes that
The effect of this will be that where doctors
refuse the retroactive component, they must do so in writing, but
where the doctor accepts the retroactive component, there is no
requirement for consent to be in writing. (in practice this will
often be indicated by payments of the invoice).
This will ensure that doctors who take out medical
indemnity insurance without a retroactive component do not do so
The Bill contains a series of other minor technical amendments
and some minor consequential changes needed as a result of the
commencement of the Legislative Instruments Act 2003.
This Bill contains some technical amendments to the medical
indemnity regime. In particular, the Bill makes some changes to the
operation of the run off cover scheme. The changes are
- Susan Dudley, Medical Indemnity Bill 2002 , Bills
Digest, No. 71 2002-03, http://www.aph.gov.au/library/pubs/bd/2002-03/03bd071.htm.
- Susan Dudley, Medical Indemnity (Prudential Supervision and
Product Standards) Bill 2002 , Bills
Digest, No. 121 2002-03, http://www.aph.gov.au/library/pubs/bd/2002-03/03bd121.htm.
- Susan Dudley, Medical Indemnity Amendment Bill 2003 and Medical
Indemnity (IBNR Indemnity) Contribution Amendment Bill 2003
, Bills Digest, No. 64-65 2003-04,
- Susan Dudley, Medical Indemnity Amendment Bill 2004 and Medical
Indemnity (IBNR Indemnity) Contribution Amendment Bill 2004 ,
Bills Digest, No. 99-100 2003-04, http://www.aph.gov.au/library/pubs/bd/2003-04/04bd099-100.htm.
- Susan Dudley, Medical Indemnity Legislation Amendment (Run-off
Cover Indemnity and Other Measures) Bill 2004 , Bills
Digest, No. 157 2003-04, http://www.aph.gov.au/library/pubs/bd/2003-04/04bd157.pdf.
- Medical Indemnity Legislation Amendment Bill 2006,
Explanatory Memorandum, p. 5.
11 October 2006
Bills Digest Service
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