Members of Perth-based MDA National have voted against a merger with the Medical Defence Association of SA.

The proposed merger was announced in March and would have created a new group known as Medical Defence Australia.

The group would have had combined annual premium and subscription revenue of about $115 million and improved economies of scale, according to a scheme booklet.

However, it required members of both groups to vote in favour of a merger. While the SA vote was in favour, the WA group voted against.

Last month Australian Medical Association (AMA) WA President Michael Gannon circulated an email raising concerns about the effective move of the head office to Adelaide and an inability to guarantee savings for MDA National members.

The email prompted Federal Court action by MDA National, which needed permission to send out additional late information responding to the AMA concerns before the vote. 

“Uncertainty in the international insurance and reinsurance industry forms a large part of the stated reasons for the merger,” Dr Gannon said in his email, according to court transcripts.

“A bigger merged organisation may well be more resilient if there are threats to the industry in the future.

“A merger seems to be a good idea. We remain unsure whether this merger is a good idea.”

Note: This article corrects an earlier report that said the Medical Defence Association of SA members had voted against the merger. We have since been able to establish that the SA members in fact voted in favour of the merger.