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Independents' Day

GPs who took up MDU 'half-price' indemnity offer will not need run-off cover

Exclusive GPs who took up the Medical Defence Union's 'half-price' indemnity offer will not need to buy run-off cover when the new state-backed indemnity scheme is introduced in April, as long as they remain with the union until they retire.

The MDU has clarified the issue, following confusion around the future arrangements, after the union slashed it costs immediately after the Government announced its new state indemnity scheme in 2017.

It has said that any GP who stays with the MDU until NHS pensions scheme retirement age will be covered for any historic liabilities, but anyone who leaves the union will have to purchase seven years' worth of run off cover.

An official NHS England letter this week seen by Pulse revealed the new GP indemnity scheme will not pick up historic liabilities, pointing out that GPs with claims made or claims paid cover will require run-off cover.

The letter, sent by NHS England director of primary care commissioning Dr David Geddes, said GPs with occurrence based cover 'do not need to take any further action in respect of "run-off" cover'.

However, those with 'claims made or claims paid cover' - which only covers incidents either reported or reported and concluded during a specific period, and includes the MDU's current offering - will require run-off cover to ensure 'complete historic cover', unless their current indemnity provider says otherwise.

The MDU halved its fees in 2017, after then health secretary Jeremy Hunt announced a new state-backed indemnity scheme, saying it expected claims arising since the announcement to be picked up by the new NHS scheme. 

The Government disputed this almost immediately, stating that it 'does not currently plan to include this run-off cover in a state-backed scheme' and warning GPs against leaving themselves uncovered for this period.

However, the MDU has now told Pulse that its members who are benefiting from the half-price deal have 'sufficient membership' and will not need to buy run-off cover as long as they remain with the organisation until the retirement age for the NHS pension scheme. 

GPs will have to continue to purchase indemnity for private work, and to receive medico-legal advice.

An MDU spokesperson said: 'The vast majority [of our members] will not need to contact us to arrange run off cover at present. Where members have been on transitional benefits - that is all our English GP members - as long as they stay in membership they continue to notify claims from that period and there is no need for them to contact us to pay run off at this time.

'It’s only in very specific circumstances at present that members would need to pay run-off. Provided that people remain in membership there is nothing they need to do in terms of run off cover.'

According to the spokesperson, the MDU - alongside other medical defense organisations -  is currently in discussion with the Government over the introduction of an 'existing liability scheme', which would pick up the historic claims against GPs.

However, even if this existing liability scheme does not come into effect, the current MDU subscription 'would be sufficient to mean that people could continue to notify claims from the period when they were on transitional benefits', the spokesperson said.

'If they chose to leave the MDU at that stage and the Government agreed existing liability had not been put in place then GPs would start paying run-off payments, but as long as they remain in membership through to their retirement there will be nothing further to pay, being just part of the normal subscription,' they added.

The MDU said if run-off cover is required - in the case that a GP wanted to leave the MDU - then it would be for a maximum of seven years, after which there would be no additional subscription to pay.

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Readers' comments (11)

  • Peter Swinyard

    Careful here - this was announced a few days ago. The cover is valid if you retire AT YOUR NORMAL PENSION AGE. For members of the 2015 scheme, that could mean you have to work to 68 to be safe or pay 7 years' run-off cover premium. How many of us will stay in this job until the age of 68???

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  • 'nothing for nothing'
    I'd like to see a comparison the MPS and MDU rates from 01.04.19

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  • In two days time it will be the second anniversary of the introduction of the new, dodecagonal, £! coin (28 03 2017). PULSE might consider celebrating the occasion by updating the image.

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  • Feeling a bit stung by this.

    As an MDU member for several years who did not like the new occurrence based ‘transitional benefits’ I asked MDU to remain on existing scheme to be told that was not an option.

    MPS were so swamped with new applications that despite starting 3 months before my renewal they were not able to offer me a policy in time so I had to renew with MDU or cancel booked work.

    Now I have to stay with MDU until I retire in 20+ years? Feels like a trap?

    Shame MPS couldn’t sort out their membership- they would have had a new customer...

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  • Clever MDU the Evil monsters.

    So they reduced the premium for 1year then whacked it back up to nearly the same as full cover, and now they have us trapped so we either pay the run off fee which will be huge I bet or stay with them.

    Come on bma do something for a change.

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  • I spoke to the MDU earlier and they told me that the run off cover would be the same as the difference between the full cover and the lower rate. So i am confused what this 7 year run off cover relates to. Does that mean the 5k less they charged us would be payable over 7 years..?

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  • Shah Ali, yes, this is what is means. If you leave early you need to pay back the discount that you received. So you are better off if you stay with the MDU but you might need to stay until 67 (if in 2015 scheme) or they charge you the discount you received over a 7 year period- not sure if you can just pay it as a lump sum in one go.

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  • Does this just mean we can't move from MDU to another provider as if we do we will be stung with run off cover? Feels like we are now over a barrel and can no longer shop around for cheaper cover.

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  • I will tell you what it means the sneaky buggers. For 7 years you will pay £1200 every year in case a claim is made. Add this whopping £8400 penalty to the cost of the transitional year and it come to £14k.

    If you dare to leave that is........

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  • What happens if you intend working for more than 7 years but then retiring earlier than 68? Will that time period be enough for any historical claims to have occurred and therefore not need run off cover?

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