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No co-sponsors yet.
History
- Referred to insurance
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S7388
Title of bill
An act to amend the insurance law, in relation to reciprocal insurance companies, and medical malpractice premium rates and surcharges; and to amend chapter 266 of the laws of 1986, amending the civil practice law and rules and other laws relating to malpractice and professional medical conduct, in relation to medical malpractice premium rates and surcharges
Purpose
The purpose of this legislation is to facilitate the ability at domestic medical malpractice insurers to adjust their premium rates up to an aggregate of plus or minus five percent without prior regulatory approval, permit domestic reciprocal medical malpractice insurers that provide coverage to teaching faculty to convert more easily to domestic stock insurance companies, and to reform the Medical Malpractice Insurance Pool.
Read the full memo (729 words)
Summary of provisions
This bill pen11its domestic medical malpractice insurers to adjust their premium rates up to an aggregate of plus or minus five percent without prior regulatory approval, permit domestic reciprocal medical malpractice insurers that provide coverage to teaching physicians and dentists to convert more easily to domestic stock insurance companies, authorizes the superintendent of financial services to impose surcharges in the event the Medical Malpractice Insurance Pool has an actuarially projected deficiency for policy years through June 30, 2015, and requires the Property/Casualty Insolvency Fund to apply to policies issued by the Medical Malpractice Insurance Pool.
Existing law
The insurance law currently requires the superintendent of financial services to establish all medical malpractice insurance premium rates, requires domestic reciprocal insurers to obtain a super majority approval of its subscribers to convert to a domestic stock company, and places the burden of any projected deficiency of the Medical Malpractice Insurance Pool solely on the member companies of such pool notwithstanding that they were mandated by law to become its members.
Justification
The current business environment for medical malpractice is very restrictive of competition and innovation. Small reciprocal insurers in particular are constrained by their governing structure in their ability to take advantage of business opportunities without time consuming and expensive subscriber approval. The value of the subscribers' equity in such a company is zero or close to zero because of a history of operating deficits. The proposed legislation will permit a reciprocal insurer that writes medical malpractice insurance for teaching staff at SUNY and other academic facilities to convert to stock companies without subscriber approval, but with oversight of the Department of Financial Services. The revised
procedures will improve competition in the marketplace and improve carrier solvency.
Legislation enacted in 1986 provided that the superintendent of insurance is required to establish medical malpractice insurance premium rates. Over the quarter century since the legislation was enacted, private carriers have left the market and competition among the few remaining carriers is very limited. The proposed legislation will encourage competition and improve carrier solvency by permitting insurance carriers that write medical malpractice insurance to adjust their rates for different medical specialties, and in differing geographical territories, provided that the overall effect does not increase or decrease their rates by more than five percent in the aggregate. In addition to increasing competition, this bill will address the regulatory delays and burden to the state that arises from the current legislation.
The legislation enacted in 2001 to dissolve the Medical Malpractice Insurance Association ("MMIA") continued the authority of the superintendent of insurance to impose premium surcharges on physicians and surgeons who were insured by MMIA in the event of an actuarially projected deficiency attributable to the premium levels for policies providing coverage for physicians and surgeons medical malpractice prior to July 1, 2001, but did not provide for such surcharges in the event of a deficit attributable to the MMIA's successor, the Medical Malpractice Insurance Pool ("MMIP"). The proposed legislation clarifies that the superintendent of financial services shall have authority to impose surcharges in respect of policies issued by MMIP through June 30,2015, and also clarifies that if such surcharges are inadequate to meet any deficit in the MMIP the Property/Casualty Guaranty Fund will be primarily responsible to cover unpaid claims before the individual member companies of MMIP will be exposed to liability. The proposed legislation will have create an immediate benefit to the financial condition of the members of the MMIP, some of which are experiencing financial distress in part due to their MMIP potential exposure.
Legislative history
New bill.
Fiscal implications
None.
Effective date
Effective immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.