The Australian Prudential Regulation Authority (APRA) today met with the nations Medical Defence Organisations (MDOs) as part of a long-term commitment by the industry to ensure the security of medical indemnity coverage.

Todays meeting was part of an ongoing series - prompted by an industry initiative - to develop and road-test options for bringing unregulated medical indemnity business under APRAs new prudential regime for general insurance, which takes effect from July 2002 with a transition period to July 2004. Ultimately, any reform proposals will need to be submitted for consideration by the Government.

It is widely accepted that the medical defence industrys safety and soundness is important not only for the protection of member doctors and injured patients, but also confidence in the medical system more generally.

"APRAs role at todays meeting was to highlight the benefits of bringing medical indemnity business under the protection of the Insurance Act, and to coordinate the quantitative modelling required to assess the viability of alternative reform options", said Dr Darryl Roberts, APRA General Manager, Central Region and convenor of the meeting.

Currently, MDOs are not licensed or regulated under the Insurance Act as they are mutual aid schemes whereby members pool resources to provide coverage to the membership on a discretionary basis. This differs from an insurance company, as there are no contractual terms and conditions governing payment of a claim. Claims are paid only at the discretion of the organisation and if there is sufficient capital.

"APRA has a long term commitment to maximise policyholders confidence in the insurance market. Our on-going program of discussions with the MDOs is part of that work and their cooperation is commendable and appreciated," said Dr Roberts.

Talks between the regulator and the industry are focussed on the commercial implications of the new regulatory requirements for general insurance companies that come into effect this July. These new requirements include risk-based capital reserving, upgraded corporate governance standards, including Directors meeting a suitability test, and whistle-blowing responsibilities for auditors and actuaries.

The industry has agreed to meet in the future for further discussions on moving reform of MDOs forward - the next meeting is scheduled for 3 July 2002.

For further information:	Media Enquiries only:
APRA Call Centre	David Van
1300 131 060	APRA - Public Affairs
	02 9210 3143
	0418 649 474