Creates the medical liability insurance association to replace the medical malpractice insurance pool, as the provider of medical malpractice insurance; repealer

BILL NUMBER:A8811

Title of bill

An act to amend the insurance law, in relation to estab- lishing the medical liability insurance association; and repealing certain provisions of such law relating thereto

Purpose

To establish the medical liability insurance association to replace the medical malpractice insurance pool of New York State as the provider of medical malpractice insurance.

Summary of provisions

* Establishes the Medical Liability Insurance Association (MLIA): It also explains the powers and duties of the MLIA.

* Plan of operation: This plan will contain provisions including but not limited to establishment of necessary facilities, management of the association, assessment of members to defray losses and expenses, service charges, acceptance and cession of reinsurance, appointment of servicing carriers or other servicing arrangements and procedures for determining amounts of insurance to be provided by the association.

* Policies: Sets forth the policies in which the association is governed.

* Rates: MLIA will assume and utilize the rates, rating plans, rating rules, rating classifications territories and statistics that are currently being used by the medical malpractice insurance pool of New York State.

* Procedures: Outlines the procedures in which an applicant may apply to the association.

* Participation: Sets guidelines for each member's participation in the association.

* Directors: This section provides a framework for creating a board of directors. It also outlines the powers and duties of the board of direc- tors.

* Appeals: This section provides the framework to appeal to the super- intendent.

* Annual Statement: The association shall annually file a statement in the office of the superintendent. This section outlines what shall be contained in the annual statement, along with the time that it is due.

* Examinations: This section authorizes the superintendent to conduct an examination into the affairs of the association at least annually.

* Immunity: Provides that the association is free from liability or cause of action for any statements made in good faith during any

proceedings or concerning any matters within the scope of this article. * Evaluation: Provides that the superintendent shall report to the governor and the legislature evaluating the operation of this article.

Existing law

Repeals current Article 55 of the Insurance Law.

Justification

The structure of the present Medical Malpractice Insurance Pool of New York State (MMIP) is causing significant and rapidly worsening problems to the members of the pool. The Superintendent was granted the authority in 1985 to establish medical malpractice rates for physicians and surgeons at the lowest possible level consistent with solvency. In recent years, insurers have requested rate increases in excess of those actually granted, and as a result, the surplus of medical malpractice insurers has steadily declined to the point where it has become more likely that some of the insurers could, in the near future, be statuto- rily impaired were it not for earlier legislation exempting them from the liquidation provisions of the New York Insurance Law. MMIP's signif- icant losses have exacerbated the pressures on insurers in New York and are further weakening their financial position. This bill, in effect, changes MMIP to a separate association, required to meet reporting and other requirements of the New York Insurance Law. This will allow medical malpractice insurers better footing and allow medical malprac- tice insurers to stay in the market.

Legislative history

A.6471 (2007-2008)

Fiscal implications

None.

Local fiscal implications

None.

Effective date

This act shall take effect on the first of September next succeeding the date on which it shall have become a law.