Glossary

Glossary

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Actuary

A specialist in mathematical and statistical methods of the calculation of risk, especially as it relates to insurance calculations, such as premiums etc.
Adverse OutcomeA result from treatment contrary to the expectation of the patient and/or the medical practitioner.
APRAThe Australian Prudential Regulation Authority. The prudential regulator of the Australian financial services industry. Its responsibilities include the oversight of general insurance companies.
ASICThe 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.
AuditA survey of files, processes 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.
BenefitsSums of money or other benefits which, under the terms of the indemnity or insurance policy, are to be paid or made available.
BrokerA representative of the insured who arranges for policies of insurance to be provided by insurance companies.
CallSometimes 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’ on its Members.
CaseA matter which may involve an adverse outcome, incident, patient complaint, investigation or claim for damages.
Case HandlerA Claims Manager, Medico-Legal Adviser or other appointee who is responsible for the management of a case or matter.

Claim

A demand for or an assertion of, a right to, compensation, damages or injunctive relief from you; or
An intimation of an intention to seek compensation, damages or injunctive relief from you.
ClaimantThe person (or their representative) making a claim for damages.
Claims IncurredMDO or insurance cover which provides indemnity for any incident which occurs between the inception date and the expiry date, regardless of when a claim is made or notified, even if the policy has not been renewed. The indemnity was provided on an unlimited, discretionary basis. This type of indemnity is no longer provided by MII’s in Australia.
Claims Made This means that the policy will only respond to claims made against a policyholder and notified to us during the period of insurance arising from the provision of healthcare services provided on or after the retroactive date (see definition of Retroactive Cover). Claims Made policies do not cover matters that a Member was aware of or matters that have been notified to a previous insurer prior to the commencement of the period of insurance.  

MDA National Insurance only issues claims made contracts of insurance.
CoverThe scope of the protection provided by an insurance contract or indemnity.
DamagesMonetary 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 ReleaseAn 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) (Formerly known as the Blue Sky Scheme)The ECS was established under the Medical Indemnity Act 2002 (Cth) 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. The ECS does not cover the treatment of public patients in public hospitals, (as this is covered by State and Territory Government indemnity arrangements) or claims arising from the treatment of patients overseas (other than voluntary aid work) provided overseas or corporate bodies, even if they are run by a doctor.
EndorsementA written amendment attached to a policy that modifies the terms of the insurance contract.
EstimateAn 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. An excess is not standard on MDA National policies. If an excess has been applied to your policy, the amount and conditions 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 a Run Off Category through the Professional Indemnity Insurance Policy or ROCS (see Run-off Cover and ROCS)
 Field of practiceThe field of practice in which you ordinarily provide healthcare services as set out in the schedule and any other field of practice notified to us for which we have agreed to extend cover in writing.
Fully FundedHaving reserves which are greater than both known (reported) claims and actuarially assessed IBNR liabilities.
Healthcare Services(a) healthcare treatment, services or advice or a report of those things provided to a patient or in relation to a patient in a professional capacity; (b) supervision, training or direction of a healthcare student or registered healthcare professional who is undertaking a recognised healthcare training program; (c) supervision or direction of a person who is not a medical practitioner to assist you in providing healthcare treatment, services or advice to a patient; (d) supervision, training or direction of a medical practitioner whose registration or licence is conditional upon such supervision; (e) a healthcare report or opinion not for the purpose of treatment; (f) healthcare advice to a person or organisation in relation to a person’s fitness to carry out certain duties or activities; or (g) writing an academic paper or an article in a peer reviewed, refereed healthcare journal;Provided that the activity is of a type that a qualified registered healthcare professional would ordinarily provide if he or she were carrying out your field of practice.
High Cost Claims Scheme (HCCS)The HCCS was established under the Medical Indemnity Act 2002 (Cth), and 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.
IBNRIncurred 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 professional indemnity, IBNR liabilities can make up a significant proportion of the total liabilities.
IncidentAn event which may or may not result in a claim or complaint being made.
IndemnityAn 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.
InsuranceA 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 PolicyA written contract of insurance.

Insured

Party to an insurance contract to whom the insurer agrees to indemnify losses, provide benefits or render services.
Liability1. Condition of being bound to do something which may be enforced in the courts.
2. Probable cost of meeting an obligation.
MDA WAThe 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.
MDOMedical Defence Organisation
MediationA method of dispute resolution which promotes the discussion and settlement of disputes. A mediator acts as a neutral and independent party and facilitates negotiations between the parties.
Medical practitionerAn individual registered or licensed as a medical practitioner under a law of Australia or any State or Territory of Australia.
MII  Medical Indemnity Insurer
MIIAA Medical Indemnity Industry Association of Australia
NegligenceRequires the existence of a duty of care owed to another. The duty must be breached and cause injury, loss or damage in order for compensation or damages to be payable.
PolicyPolicy wording, schedule and any endorsements.
ProposalAll documentation comprising an application for or renewal of, a policy including and pre-renewal questionnaire.
Registered healthcare professional A medical practitioner or an individual who practices a healthcare related vocation and who is registered under a law of Australia or any State or Territory of Australia to practice as a health care professional. 
ReinsuranceA 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.
ReserveFunds set aside for the purpose of meeting obligations as they fall due.
Retroactive cover Retroactive cover is cover for civil liability claims, investigations or inquiries which arise from the provision of healthcare services 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.

Additional retroactive cover can be purchased for discrete past periods of practice if required.
Retroactive DateThe 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 ManagementThe systematic application of management policies, practices and procedures to the task of analysing, assessing, treating, monitoring and communicating risk.
Run-off CoverA form of cover generally taken out by professionals when they retire or in the event they stop practising for a significant period of time. Civil liability claims arising from the provision of healthcare services can be made against a medical practitioner years after the healthcare 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 healthcare services provided during the period from your retroactive date to your nominated cessation date. The cessation date is normally the day after your last day of practice for which you require 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 or over and have retired permanently from remunerated private medical practice;b) are aged 65 years or over and have retired permanently from all remunerated medical practice;c) have not engaged in any remunerated private medical practice at any time during the preceding period of 3 years;d) have not engaged in any (including public sector) remunerated medical practice in the preceding 3 years; e) have ceased all remunerated (temporarily or permanently) medical practice because of maternity; f) have ceased all remunerated (temporarily or permanently) medical practice because of a permanent disability; or g) have left Australia permanently having practiced in Australia on a Visa sub-class 422 or 457.

A medical practitioner’s estate will also be eligible for ROCS after the medical practitioner’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/ .
ScheduleCurrent schedule to a policy
SettlementAn agreement, resolution or payment which finalises legal proceedings or a claim for damages.
SubrogationThe 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.
UnderfundedHaving insufficient reserves for both known (reported) claims and actuarially assessed IBNR liabilities.