DPL has been supporting and protecting the dental health profession in Australia continuously for almost 40 years. But because DPL is not an insurance company, the July 2003 changes in the legislation affecting medical indemnity throughout Australia made it necessary for DPL members to obtain a policy of medical indemnity insurance from a regulated general insurer licensed for this purpose in Australia. DPL members are able to obtain such a policy from a number of providers, including MDA National Insurance Pty Ltd. This insurance company is wholly owned by the Medical Defence Association of Western Australia Pty Ltd (“MDA National”), and DPL Australia Pty Ltd has agreed to act as a Corporate Authorised Representative of MDA National Insurance, and to provide a range of case management and other services to DPL members on behalf of MDA National Insurance. DPL has no such relationship with any other medical indemnity insurer in Australia.
This opening section explains the background to these changes.
Professional indemnity never seems to be out of the news in Australia over the past few years. The collapse of the insurance giant HIH left many thousands uninsured, including thousands in other professions. Medicine and dentistry were only minimally affected by HIH, but when UMP ("United") was placed into provisional liquidation in February 2002, the shock waves ran from individual surgeries, clinics and hospitals across Australia, right up to Canberra. At the time, United had been the largest indemnifier of the medical profession in Australia, as well as indemnifying some dentists - mostly in NSW.
The Government's response was twofold:
1. Firstly, to commission an inquiry under the leadership of Justice Ipp, to make recommendations on the legal framework for clinical negligence, the legal remedies when it occurs, and the management of damages and the associated legal costs. The Ipp Report made many recommendations in the hope that these would result in a uniform Federal approach to this question. Following this, most States have now implemented legislative changes ('Tort Law' reforms) - these have been conveniently summarised in various issues of DPL's risk management publication Riskwise Australia.
2. Secondly, to introduce the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 - ("the Act"). This required all new arrangements for professional indemnity for healthcare professionals in Australia (including all renewals of existing arrangements) made on or after July 1st 2003, to be arranged through regulated contracts of insurance..
Many of the MDOs (mutual discretionary organisations) which had traditionally provided professional indemnity for the Australian medical profession, were outspokenly critical of the Government's chosen solution to the medical indemnity crisis, as was the Australian Medical Association (AMA) which effectively threatened the Government with strike action by its members. With the Government also coming under fierce parliamentary criticism from the Opposition, there was hardly overwhelming support for the changes that were introduced.
It is perfectly understandable, in the wake of the UMP crisis, that the Government would wish to see more regulatory control and safeguards in place to prevent a repeat of the events at United, and hitherto the MDOs had remained outside the jurisdiction of the insurance regulators (APRA). But it was more difficult to understand the Government’s logic in choosing the very model (ie contracts of insurance from a regulated insurer) that had failed so dismally in respect of HIH. Even if they had concluded that this was necessary and desirable in the case of medical practitioners, the decision to impose the same insurance requirement upon all registered dental healthcare professionals – dentists, hygienists, therapists, oral health therapists, technicians and prosthetists alike – was certainly difficult to comprehend. More recently, a Government review of the scope of the Medical Indemnity Act considered this very question, but decided that there was no pressing need to amend the legislation that it had introduced four years earlier.
Forcing well run, well funded and successful MDOs (including DPL, and several of Australia's medical MDOs) either to become insurance companies, or to set up an insurance company, or to outsource a suitable insurance policy, simply penalised these organisations (and their members) for the failures of others. There are additional costs involved in the provision of insurance which do not arise in mutual discretionary organisations, and these additional costs have to be paid by members (and ultimately, by their patients).
DPL serves and protects almost 62,000 dental members in 70 countries worldwide. One in ten of these members are in Australia and New Zealand. We firmly believe that occurrence-based indemnity, provided by a well funded and well managed mutual (not for profit) discretionary organisation remains the gold standard for dental professional indemnity, and this is what we continue to provide for our members throughout the rest of the world. It is only the action of the Australian Government that has required DPL, by law, to change its traditional arrangements since July 1st 2003. But we are still committed to work within the constraints of the Australian legislation, to provide the best alternative package for our members.
We have explained what we have done, and why, and what this means in practical terms. Click below to access this information.
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