Many factors are involved in the current problems with medical indemnity insurance, including the increasing costs of providing long term care and regulatory requirements for insurers. Most claims are small but the very small number of high value claims substantially increases the total claims value.
During the past couple of months the primary topic for doctors must have been the medical indemnity crisis. At the time of press, United Medical Protection (UMP) had announced that it would go into liquidation and the 29,000 doctors it covered in New South Wales and Queensland were not confident that they would be covered for claims that had not yet come to light. The Commonwealth Government agreed to provide a capital guarantee up to $35 million until 30 June 2002, to allow UMP’s captive insurer, Australian Medical Insurance Limited (AMIL) to maintain acceptable prudential margins. Yet neither that Government nor the NSW Government gave an assurance that it would back claims after that time, nor cover ‘the tail’ of claims incurred but not yet reported. Doctors are justifiably worried. It has been suggested that UMP has unfunded liabilities up to $500 million; the exact figure will not be known for years.
Most readers will be at least as familiar with these circumstances as I am, either from their own experience or from the media reports. As a lawyer, however, I want to question the widely expressed opinion, especially among doctors, that the current medical indemnity crisis has been brought about by ‘the law’ and ‘the lawyers’.