NSW doctors are contemplating setting up a class action against failed mutual insurer United Medical Protection, which is in liquidation. Several groups of doctors are openly discussing legal action against the UMP board, alleging it may have made false and misleading statements.

Four weeks before its collapse, UMP sent a letter to its members saying that “United has never functioned better”. The letter urged them to stay with the company and not jump ship to other insurers.

But UMP’s collapse has left 32,000 doctors, most of them in NSW, without insurance cover. According to provisional liquidator David Lombe, a partner with Deloitte Touche Tohmatsu, UMP might not be able to renew policies coming up for renewal after June 30.

The Federal Government has pledged to cover the affected doctors until June 30, but its guarantee states only doctors with valid policies, or policies that fall due and are renewed by the liquidator, are covered. Doctors are worried this means that if their policy falls due soon and isn’t renewed, they won’t be covered by the guarantee.