17IBNR indemnity for MDO or insurer in external administration

#### 17 IBNR indemnity for MDO or insurer in external administration Basic payability rule (1) An IBNR indemnity is payable under this section to an MDO or insurer that is a Chapter 5 body corporate if: (a) the MDO or insurer is liable to pay an amount in relation to a claim against or by a person (the practitioner); and (b) the claim relates to: (i) an incident that is covered by the IBNR indemnity scheme (see section 14); or (ii) a series of related incidents that includes an incident that is covered by the scheme; and (c) the practitioner had, on 30 June 2002, incident‑occurring based cover with the participating MDO for the incident that is covered by the IBNR indemnity scheme; and (d) the amount that the MDO or insurer is liable to pay is provable; and (e) if it is an MDO that is liable to pay the amount—the MDO could pay the amount: (i) consistently with its constitution and the indemnity arrangement between the MDO and the practitioner; and (ii) in the ordinary course of its business; if it were not a Chapter 5 body corporate; and (f) if it is an insurer that is liable to make the payment—the insurer could make the payment: (i) consistently with the terms of the insurance contract between the insurer and the practitioner; and (ii) in the ordinary course of its business; if it were not a Chapter 5 body corporate; and (g) the MDO or insurer applies to the Chief Executive Medicare for the IBNR indemnity in accordance with section 36. (2) Subsection (1) has effect subject to: (a) subsections (5) and (6) of this section; and (b) sections 19 and 20. Basis for liability to pay (3) The IBNR indemnity is payable to the MDO or insurer regardless of the basis on which the amount is payable by the MDO or insurer. > Note: If the criteria for the indemnity set out in subsection (1) are met, the indemnity may be payable to the MDO or insurer even if the MDO or insurer is liable to pay on the basis of claims made cover the practitioner has with the MDO or insurer. Person liable to pay need not be participating MDO (4) If an MDO is liable to pay the amount, the MDO that is liable to pay the amount may be the participating MDO or may be a different MDO. Participating MDO liable to pay (5) If the amount is one that the participating MDO is liable to pay, the IBNR indemnity is payable only if the participating MDO could have paid the amount in relation to the claim in relation to the incident covered by the IBNR indemnity scheme on the basis of incident‑occurring based cover the practitioner had with the participating MDO on 30 June 2002. Someone else liable to pay (6) If the amount is not one that the participating MDO is liable to pay, the IBNR indemnity is payable only if the participating MDO could have paid an amount in relation to the claim in relation to the incident covered by the IBNR indemnity scheme: (a) consistently with its constitution and the indemnity arrangement between the participating MDO and the practitioner; and (b) in the ordinary course of its business; and (c) on the basis of incident‑occurring based cover the practitioner had with the participating MDO on 30 June 2002; if the practitioner made a proper claim in relation to the incident. Indemnity to be paid on trust (7) An IBNR indemnity paid to an MDO or insurer under this section is paid on trust for the benefit of the person to whom the MDO or insurer is liable to make the payment referred to in paragraph (1)(a).