Australian insurers are close to finalising a scheme which will ensure victims of the Bali terrorist attacks are not left out of pocket due to terrorism exclusions.

According to the Sydney Morning Herald, The Insurance Council of Australia said insurance companies would take a "flexible approach" and cover death, repatriation and medical expenses.

A spokeswoman for the council said: "The policy wording stands, but insurers have said they would look at each individual case."

Federal government officials have urged insurance companies to take a generous view on claims. Most insurance companies had indicated so far that they would cover all costs incurred by the attacks.

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