The Minister for Revenue and Assistant Treasurer Senator Helen Coonan welcomed the decision of the NSW Supreme Court to approve the Government's extension to the guarantee for doctors covered by UMP/AMIL.
In May the Prime Minister announced a series of measures to address some of the difficulties being experienced in the medical indemnity insurance market.
Since the announcement of this extension, doctors have been able to continue to provide services while the Government and others address the longer-term issues the industry.
"Although the problems facing the medical indemnity insurance industry are not of the Federal Government's making, but the Government has moved quickly and responsibly to assist with a solution," Senator Coonan said.
"The provisional liquidator, Mr David Lombe, should now be able to begin renewing policies on a claims made basis."
"The Commonwealth's guarantee and the court's approval allowing the provisional liquidator to renew policies means UMP members can continue practicing, with the assurance that they are covered under the terms of their policy, until the end of the year.
"Earlier action by the Commonwealth means the provisional liquidator is also able to pay out claims that were notified before April 29 and properly payable during the guarantee period."
The Government is also in the process of addressing the issue of unfunded claims that have been incurred but not reported (IBNRs) to improve the financial viability of the medical indemnity industry going forward.
The Government will underwrite all IBNRs where they have not been adequately provisioned for and recoup this liability from members of the relevant MDOs over an extended timeframe.
"Details of the levy arrangements will be developed in consultation with affected medical practitioners and Medical Defence Organisations," Senator Coonan said.
"If doctors belong to an MDO without unfunded IBNRs, they will not be required to pay a levy.
"I will be working with the States, doctors and the insurance industry as to the best way of implementing longer term solutions to the issue during the breathing space provided by the Prime Minister's announcement."