18Minimum annual cover—incident‑occurring based cover

#### 18 Minimum annual cover—incident‑occurring based cover Circumstances in which section applies (1) This subsection applies to a person if: (a) under a contract of insurance (the relevant contract), the person provides medical indemnity cover for a health care professional; and (b) the health care professional is: (i) a medical practitioner; or (ii) a registered health professional prescribed by the regulations; and (c) the relevant contract provides for incident‑occurring based cover. > Note: For incident‑occurring based cover, see subsection 6(4). For the purposes of this section, extended reporting benefit cover and death, disability and retirement cover are not incident‑occurring based cover. (2) For the purposes of this section: (a) the qualifying incident period is the period during which a health care incident must occur for the person to provide medical indemnity cover under the relevant contract in relation to the incident; and (b) there is only one relevant period and it is the qualifying incident period if the qualifying incident period is a year or shorter than a year; and (c) the year starting at the beginning of the qualifying incident period, and each succeeding year or part of a year in the qualifying incident period, is a relevant period if the qualifying incident period is longer than a year. Offence (3) A person (the insurer) commits an offence if: (a) subsection (1) applies to the insurer; and (b) the relevant contract is entered into, comes into effect or is renewed at a particular time on or after 1 July 2003; and (c) the maximum amount payable, in aggregate, by the insurer under the relevant contract in relation to all the compensation claims that are made against the health care professional in relation to health care incidents that occur during a particular relevant period would, but for subsection (5), be less than the minimum cover amount applicable at that time. Penalty: Imprisonment for 12 months. (4) Subsection (3) does not apply if it would be reasonable to assume, at the time the relevant contract is entered into, comes into effect or is renewed, that every health care incident to which the compensation claims would relate would be one occurring outside Australia and the external Territories. > Note: A defendant bears an evidential burden in relation to the matter in this subsection (see subsection 13.3(3) of the Criminal Code). Maximum amount payable for multiple claims (5) If: (a) subsection (1) applies to a person (the insurer); and (b) the relevant contract is entered into, comes into effect or is renewed at a particular time on or after 1 July 2003; and (c) amounts are payable by the insurer under the relevant contract in relation to 2 or more compensation claims (the multiple claims) that are made against the health care professional in relation to health care incidents that occur in a particular relevant period; and (d) the maximum amount payable by the insurer under the relevant contract in relation to the multiple claims would, but for this subsection, be less than the minimum cover amount applicable at that time; the maximum amount payable, in aggregate, by the insurer under the relevant contract in relation to the multiple claims is the minimum cover amount applicable at that time (instead of the maximum amount provided for in the relevant contract). (6) Subsection (5) does not apply if every health care incident to which the multiple claims relate is one occurring outside Australia and the external Territories. (7) To avoid doubt, subsection (5) applies whether or not the insurer is convicted of an offence against subsection (3).