Insurance - PricewaterhouseCoopers

5.4
Pricing and competition
Trade Practices Act 1974
The Trade Practices Act (TPA) 1974 was enacted to address:
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anti-competitive and unfair market practices;
mergers and acquisitions of companies;
product safety and liability; and
third-party access to facilities of national significance.
All state and territory governments have their own fair trading and consumer laws
that mirror, or are based on the TPA, thereby extending the same principles to
workers compensation and CTP insurers.
Medical indemnity insurers
Only registered APRA-authorised general insurers, including those owned by Medical
Defence Organisations (MDOs), are permitted to offer medical indemnity insurance.
Under the Medical Indemnity (Prudential Supervision and Product Standards)
Act 2003, the provision of medical indemnity products has been regulated to require
minimum coverage of $5 million on a claims-made basis.
The Run-off Cover Scheme (ROCS) was introduced in 2004 to provide affordable
medical indemnity cover to medical practitioners upon retirement. ROCS is
funded by a levy on medical indemnity insurers (MIIs) who are then expected to
on-charge the levy to practitioners (the “funding levy”), with appropriate disclosure
on premium notices.
MIIs receive fees from Medicare Australia to cover:
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claims handling costs for eligible retirement claims;
the cost of issuing practitioner eligibility certificates for ROC; and
the cost of implementing systems to administer ROCS.
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