The medical indemnity crisis is far from over. Tasmania’s largest indemnity provider says it will probably fold within three months because it is struggling to raise enough capital to satisfy new regulatory reforms.

If the Medical Protection Society of Tasmania (MPS) – which covers 90% of the state’s doctors – does fold, doctors across the state will face a new crisis. MPS Company Secretary Rob Walters says the changes to the structure of doctors’ insurance is running them out of business.

MPS wants the Government to allow the “discretionary” model to run parallel with the new insurance model.

But Australian Prudential Regulation Authority (APRA) GM Enforcement Darryl Roberts says it is a commercial decision how MPS chooses to reinvent itself. He said MPS currently shares the same insurance arrangements with several other doctors’ insurers, so, “there could be logic in a merger”.

According to APRA, the best way to restore certainty in the medical community is for everyone to “get behind its reform measures”.

The MPS problems come less than a year after the collapse of Australia’s largest doctors’ insurer, United Medical Protection, with a loss of about $450 million.