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Wednesday, 9 March 2005
Page: 13

Senator ABETZ (Special Minister of State) (10:29 AM) —I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—


This bill refines the legislation implementing the Government’s medical indemnity support system.

This system provides doctors with increased access to affordable and secure insurance that can be maintained through retirement. It helps to stabilise the medical indemnity insurance market so insurers can continue to offer viable products into the future. Patients also benefit from the security offered to doctors and the medical indemnity insurance industry.

All of the measures in the medical indemnity package announced in December 2003 have been implemented. However, the Government has continued to work closely with doctors and insurers to improve their operation. This bill is the result of these ongoing consultations.

The bill amends the definition of when a medical indemnity insurer knows of a claim so that this is treated consistently. The definition of a claim is amended to ensure that costs incurred by insurers in managing future claims can be paid as intended. This change will mean that insurers can be sure of reimbursement by the Government for the costs of the retirement cover they are required to provide under ROCS.

Ongoing funding for the scheme is achieved through a payment by insurers called the Run-Off Cover Support Payment. Insurers have indicated that the current formulation of the payment makes administration of the support payment difficult. To address this concern the definition of insurers’ premium income will be changed so that it is considered net rather than inclusive of the Run-Off Cover Support Payment.

Doctors will also have the proportion of their premium payment that represents the insurers’ Run-Off Cover Support Payment clearly and consistently identified on their invoice. This change will make apparent to doctors the contribution their insurer is making toward the provision of their free retirement cover under ROCS.

Further, to help insurers more accurately predict the level of reinsurance they require the applicable threshold for a claim will be tied to when the incident was notified, not when a claim is paid.

As in other medical indemnity schemes, a protocol for dealing with claim payments, costs associated with incidents notified and other matters has been introduced for the High Cost Claims Scheme. A regulation making power has also been introduced so that any further changes to the scheme’s payability rules can be made if required.

This bill demonstrates the ongoing commitment of the Government to the medical indemnity industry, doctors and patients. The Government will continue to consult with insurers and doctors to ensure the effective operation of the medical indemnity industry insurance support system into the future.