Glossary

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Actuary	A person professionally trained in mathematical and statistical methods of the calculation of risk, especially as it relates to insurance calculations, such as premiums etc..
Adverse Outcome	A result from treatment contrary to the expectation of the patient and/or the medical practitioner.
APRA	Australian Prudential Regulation Authority. The insurance industry regulator.
ASIC	Australian Securities and Investments Commission. ASIC is Australia’s financial services regulator and they license and monitor financial services businesses, such as Insurers, to ensure that they operate efficiently, honestly and fairly.
Audit	A survey of processes, files and data to ensure compliance with regulations, legislation, protocols, policies and procedures; it is also an examination and verification of a company’s financial and accounting records, tax returns and supporting documents by a professional, such as a Certified Practising Accountant
Benefits	Sums of money or other benefits which, under the terms of the indemnity or insurance policy, are to be paid or made available.
Broker	A representative of the insured who arranges for policies of insurance to be provided by insurance companies.
Call	Sometimes referred to as a "Backfunding Contribution". It is the compulsory imposition by an MDO of an extra subscription (usually equivalent to one annual subscription) on Members or groups of Members. MDA National has never made a ‘call’.
Case	A matter which may involve an adverse outcome, incident, patient complaint, investigation, or claim for damages.
Case Handler	A Claims Manager, Medico-Legal Adviser, or other appointee who is responsible for the management of a case or matter.
Claim	A verbal or written demand for, or an assertion of a right to, compensation or damages or an intimation of an intention to seek compensation or damages, which is usually made by or on behalf of a patient.
Claimant	The person (or their representative) making a claim for damages.
Claims Incurred	Provides access to indemnity providing the doctor was a financial member of an MDO at the time an incident giving rise to a claim occurred. If a claim were to arise many years later from an incident which occurred during that period of membership, the Member can still seek indemnity, even if the Member only pays one subscription and then leaves. This type of indemnity is no longer provided by MII’s in Australia.
Claims Made	MDA National Insurance only issues claims made contracts of insurance. This means that a policy will only respond to incidents which arise from medical services provided on or after the retroactive date (see definition of Retroactive Cover) and which are notified to us during the period of insurance.
Cover	The scope of the protection provided by an insurance contract or indemnity.
Damages	Monetary compensation which may be recovered by way of legal proceedings or through agreed settlement, by any person or entity who has suffered loss as a result of the omission or negligence of another person/party.
Deed of Release	An agreement, in the form of a deed, finalising a claim brought by a plaintiff (patient) against a defendant (medical practitioner). A deed prevents a further claim for damages being brought against the medical practitioner.
Exceptional Claims Scheme (ECS)	Under this scheme, the Australian Government agrees to indemnify medical practitioners for certain claims, either individually or in the aggregate, for any civil liabilities and claims costs that exceed $20 million.
Endorsement	A written amendment attached to a policy that modifies the terms of the insurance contract.
Estimate	An estimation of the total costs which may be incurred in respect of a claim, including damages and legal professional costs.
Excess	The amount you must pay to us for each and every claim made under the policy, excluding defence costs. An excess will not apply where the claim only relates to defence costs. If an excess has been applied to your policy, the amount will be set out in your policy schedule.
Exposure	The measurement of the extent of a risk assumed by an insurer or indemnifier.
Extended Reporting Benefit (ERB)	The provision for ensuring there are continuing benefits of membership for IBNR claims after a Member leaves an MDO or MII. Following the introduction of insurance policies in July 2003, MDA National Insurance no longer offers ERBs, instead cover is provided through the Run-off Professional Indemnity Insurance Policy or ROCS (see Run-off Cover and ROCS)
Fully Funded	Having reserves which are greater than both known (reported) claims and actuarially assessed IBNR liabilities.
High Cost Claims Scheme (HCCS)	The HCCS provides for the Australian Government to make a contribution to the insurer in respect of claims above a certain threshold. Currently, the Government has agreed to pay 50% of claims costs between $300,000 and $20,000,000.
IBNR	Incurred But Not Reported (IBNR) liabilities are those matters or incidents which have occurred and may result in a liability, but which have not yet been reported to the indemnifier (or the doctor). In a ‘long tail’ business like medical indemnity, IBNR liabilities can make up a significant proportion of the total liabilities.
Incident	An event which may or may not result in a claim or complaint being made.
Indemnity	An undertaking to reimburse and/or compensate a person, or to make a payment to a third party on a person’s behalf, in respect of damage, loss or liability.
Insurance	A contractual relationship whereby one party (the insurer), in return for consideration (the premium), agrees to indemnify another party (the insured) against specified damage, loss or liability.
Insurance Policy	A written contract of insurance.
Insured	Party to an insurance contract to whom the insurer agrees to indemnify losses, provide benefits or render services.
Liability	1. Condition of being bound to do something which may be enforced in the courts. 2. Probable cost of meeting an obligation.
MDA WA	The Medical Defence Association of Western Australia (Incorporated) ARBN 055 801 771 incorporated in Western Australia. MDA National is a registered business name of MDA WA.
MDO	Medical Defence Organisation
Mediation	An alternative to litigation designed to assist the parties to settle a dispute by structured negotiation. A mediator acts as a neutral and independent party, and facilitates negotiations between the parties.
MII	Medical Indemnity Insurer
MIIAA	Medical Indemnity Industry Association of Australia
Negligence	A breach of the duty of care owed to another. The negligence must cause injury, loss, or damage in order for compensation or damages to be payable.
Reinsurance	A contract of insurance taken out by the original insurer (the reinsured) with another insurer, to cover the reinsured for its liability (in whole or in part) under the original contract of insurance.
Reserve	Funds set aside for the purpose of meeting obligations as they fall due.
Retroactive cover	Retroactive cover is cover for claims, investigations or inquiries which arise from medical services provided prior to the inception date of the policy, where you first become aware of such a matter during the period of insurance. The retroactive date on the policy determines how much of your prior practice is covered under your policy. The retroactive date is specified on the policy schedule.If you do not acquire adequate retroactive cover and a claim arises from your work prior to the retroactive date, you will not have cover from us for that claim and may have to pay the claim (or your proportion of the liability) including all associated defence/legal costs personally.
Retroactive Date	The retroactive date on the policy determines how much of your prior practice is covered under your policy (see Retroactive Cover). The retroactive date is specified on the policy schedule.
Risk	The chance of an event occurring. It is measured in terms of consequence and likelihood.
Risk Management	The systematic application of management policies, practices and procedures to the task of analysing, assessing, treating, monitoring and communicating risk.
Run-off Cover	A form of cover generally taken out by professionals when they retire or in the event they stop practising for a significant period of time. Medical negligence claims can be made against a medical practitioner years after the medical services were provided. Run-off Cover provides cover for claims that first come to light and are notified to us after a nominated cessation date but only in respect of medical services provided during the period from your retroactive date to your cessation date. The cessation date is normally the day after your last day of practice for which you cover.
Run-off Cover Scheme (ROCS)	From 1 July 2004, the Australian Government introduced a Run-off Cover statutory indemnity scheme for doctors who practise in Australia. The scheme provides Run-off Cover to certain eligible doctors without the requirement for premiums to be paid once the doctor is eligible. You are eligible for ROCS if you:a) are aged 65 years and have retired permanently from private medical practice;b) have not engaged in private medical practice at any time during the preceding period of 3 years;c) have only ever worked in public medical practice and have not undertaken any paid medical practice at any time during the preceding period of 3 years;d) have ceased (temporarily or permanently) medical practice because of maternity;e) have ceased medical practice because of a permanent disability; orf) have left Australia permanently having practiced in Australia on a Visa sub-class 422 or 457.A doctor’s estate will also be eligible for ROCS after the doctor’s death.More information on this scheme is available on request or from the Department of Health and Ageing at http://www.health.gov.au/ .
Settlement	An agreement, resolution or payment which finalises legal proceedings or a claim for damages.
Subrogation	The statutory or legal right of an insurer to recover from a third party who is wholly or partially responsible for a loss paid by the insurer under the terms of a policy.
Underfunded	Having insufficient reserves for both known (reported) claims and actuarially assessed IBNR liabilities.