Medical Indemnity Rules 2020
10Applicable interest rate for working out total run‑off cover credits
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10 Applicable interest rate for working out total run‑off cover credits
(1) For the purposes of subsection 34ZS(4) of the Act, the rate of interest, for a financial year, is the rate as worked out using the following formula: Start formula start fraction index number for the latest March quarter over index number for the earlier March quarter end fraction end formula where:
index number, in relation to a quarter, means the All Groups Consumer Price Index number that is the weighted average of the 8 capital cities and is published by the Australian Statistician in respect of that quarter.
earlier March quarter, in respect of a financial year, means the index number for the March quarter before the latest March quarter in respect of that financial year.
latest March quarter, in respect of a financial year, means the index number for the March quarter before the beginning of the financial year.
Note: Example: For the 2020–21 financial year, the index number for the latest March quarter is the index number for the quarter ending March 2020 and the index number for the earlier March quarter is the index number for the quarter ending March 2019.
(2) A rate of interest is to be worked out to 3 decimal places. (3) If a rate of interest worked out under subsections (1) and (2) would, if it were worked out to 4 decimal places, end in a number that is greater than 4, the rate is to be increased by 0.001. (4) If a rate of interest worked out under subsections (1), (2) and (3) would be less than 1, the rate is to be increased to 1. (5) Subject to subsection (6), if at any time (whether before or after the commencement of this section), the Australian Statistician publishes an index number for a quarter in substitution for an index number previously published by the Statistician for that quarter, the publication of the later index number is to be disregarded for the purposes of this section. (6) If at any time (whether before or after the commencement of this section) the Australian Statistician changes the index reference period for the Consumer Price Index, regard is to be had, for the purposes of applying this section after the change takes place, only to index numbers published in terms of the new index reference period.