Doctors medical indemnity insurance – how does the “insurer of last resort” scheme work ?

Medical indemnity insurers who have entered into a Premium Support Scheme contract with the Commonwealth are
required to meet universal cover obligations. Universal cover requires an insurer to make an offer of insurance cover to any privately practising medical practitioner whose primary place of practice is the State or Territory in which that insurer is the ‘insurer of last resort’. This guarantees that every medical practitioner in private practice can access indemnity insurance.

The insurer of last resort is determined by the historic market share of these insurers in each State and Territory. Currently the insurers of last resort in each jurisdiction are:

• Avant – New South Wales, Victoria and Queensland
• MDA National Insurance (MDA) – Western Australia
• Medical Insurance Australia (MIGA) – South Australia and the Northern Territory, and
• Medical Indemnity Protection Society (MIPS) – Tasmania and the Australian Capital Territory.

Under the universal cover provisions, insurers are able to impose a range of sanctions or risk limiting conditions of insurance on medical practitioners who they consider to be high risk. These include:

• imposing a financial sanction, such as a deductible or risk surcharge (capped at 100% of the applicable premium)
• excluding certain procedures from cover
• requiring that the insured medical practitioner be chaperoned or supervised when performing certain procedures, and
• refusing to offer cover or renew cover in certain situations where a medical practitioner has not provided correct or accurate information.

If a dispute arises between an insurer and a medical practitioner in relation to the universal cover arrangements, the matter may be referred to the Financial Ombudsman Service.

It is estimated that fewer than 120 medical practitioners across Australia are insured under universal cover arrangements. This represents less than 0.2% of the total number of privately practising medical practitioners.

Source : First Principles Review of the Medical Indemnity Insurance Fund. Report prepared for the Department of Health April 2018