Total run‑off cover credits
34ZS Total run‑off cover credits
This is how to work out an affected practitioner’s total run‑off cover credit:
Method statement
Step 1. For the first financial year after 30 June 2004 in which a medical indemnity insurer provided medical indemnity cover for the practitioner under a contract of insurance, multiply:
the practitioner’s run‑off cover credit for the financial year; by
the interest rate adjustment for the financial year (see subsection (4)).
Step 2. For each subsequent financial year (if any) until the financial year in which the termination date occurs, multiply:
the sum of the practitioner’s run‑off cover credit for the financial year and the amount worked out, under Step 1 or this Step, for the immediately preceding financial year; by
the interest rate adjustment for the financial year (see subsection (4)).
Step 3. Add together:
the practitioner’s run‑off cover credit for the financial year in which the termination date occurs; and
the last of the amounts worked out under Step 1 or Step 2.
The result is the practitioner’s total run‑off cover credit.
The practitioner’s run‑off cover credit for a financial year is the sum of all run‑off cover support payments paid or payable to the extent that they are attributable, under subsection (3), to the practitioner in relation to the financial year.
Run‑off cover support payments are attributable to the practitioner in relation to the financial year to the extent that they relate to premiums paid during the financial year to a medical indemnity insurer for medical indemnity cover provided for the practitioner by one or more contracts of insurance with the insurer.
The interest rate adjustment for a financial year is the number worked out as follows:
Start formula 1 plus Applicable interest rate end formula
where:
applicable interest rate is the rate of interest, for the financial year, specified in the rules for the purposes of this subsection.
This Act’s bill:Explanatory memorandumSecond reading speech
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