New York Codes, Rules and Regulations, Part 70, Section 70.14 - Physicians and surgeons medical malpractice policy provisions for the period commencing July 1, 1992; established rates | New York Codes, Rules and Regulations

(a) Section 40 of chapter 266 of the Laws of 1986, as amended by section 58 of chapter 165 of the Laws of 1991, requires the superintendent to establish rates for physicians and surgeons medical malpractice policies for the policy period July 1, 1992 through June 30, 1993 and establish a surcharge, of up to 25 percent, on the rates for such medical malpractice policies for the policy period July 1, 1992 through June 30, 1993, if required to satisfy any deficiency for the policy periods July 1, 1985 through June 30, 1991.

(b) The superintendent has reviewed the reports mandated by section 70.8(h) and former section 70.9(f) of this Part, taken into account the factors set forth for consideration in section 58 of chapter 165 of the Laws of 1991, and evaluated the financial condition of insurers issuing policies of medical malpractice insurance, as reflected by examinations conducted in accordance with section 310 of the Insurance Law and has determined that a deficiency exists in one instance.

(c) Rates and surcharges for occurrence policies providing primary coverage, up to $1 million/$3 million, issued or renewed during the period July 1, 1992 through June 30, 1993, shall be as follows:

(1) For Frontier Insurance Company, the rate adjustments shall be as indicated in paragraph (7) of this subdivision, which also reflects territorial and speciality modifications approved by the superintendent in accordance with section 2307 (a) of the Insurance Law. No surcharge shall be collected for this insurer.

(2) For Group Council Mutual Insurance Company, rates shall be five percent greater than those established pursuant to section 70.12(c)(2) of this Part. In addition, a surcharge of four percent shall be collected for this insurer.

(3) For Medical Liability Mutual Insurance Company, rates shall be those established pursuant to section 70.12(c)(3) of this Part. No surcharge shall be collected for this insurer.

(4) For the Medical Malpractice Insurance Association, rates shall be those established pursuant to section 70.12(c)(4) of this Part. No surcharge shall be collected for this insurer.

(5) For Physicians Reciprocal Insurers, the rate adjustments shall be as indicated in paragraph (8) of this subdivision, which also reflects territorial and specialty modifications approved by the superintendent in accordance with section 2307 (a) of the Insurance Law. No surcharge shall be collected for this insurer.

(6) For all other insurers, rates shall be those established by paragraph (3) of this subdivision, unless the insurer can demonstrate to the satisfaction of the superintendent that another rate is appropriate. No surcharge shall be collected for any such insurer unless specifically required by the superintendent.

(7) Rate and territory changes for Frontier Insurance Company.

*Territory 00 Remainder of State*	*Territory 01 New York Orange Ulster Westchester*	*Territory 02 Bronx Kings Queens Richmond Rockland Sullivan*	*Territory 03 Nassau Suffolk*	*Territory 04 Putnam Dutchess Columbia Greene*	*Territory 05 Erie Niagara*
*Old Class*	*New Class*
1	1	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
3	2[DAGGER]	-14.3	+8.6	+8.6	+8.6	+8.6	-2.4
2	3[DAGGER]	-20.5	+0.7	+0.7	+0.7	+0.7	-9.6
4	4	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
5	5	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
6	6	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
7	7	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
8	8	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
9	9	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
10	10	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
11	11	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
12	12	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
13	13	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1
14	14	-13.3	+9.8	+9.8	+9.8	+9.8	-1.4
14	15*	-17.4	+4.6	+4.6	+4.6	+4.6	-6.1

[DAGGER] Obstetrician/gynecologists previously in Class 3 are now in Class 2 and orthepedic surgeons previously in Class 2 are now in Class 3.

* Class 15 now includes all specialties previously in Class 14 except neurologists (excluding the supervision, direction, or performance of myelography, angiography and/or pneumoencephalography) who remain in Class 14.

(8) Rate and territory changes for Physicians Reciprocal Insurers.

*Territory 00 Remainder of State*	*Territory 01 New York Orange Ulster Westchester*	*Territory 02 Bronx Kings Queens Richmond Rockland Sullivan*	*Territory 03 Nassau Suffolk*	*Territory 04 Putnam Dutchess Columbia Greene*	*Territory 05 Erie Niagara*
*Class*
1	0.0	0.0	3.0	8.0	5.0	8.0
2	0.0	0.0	3.0	8.0	5.0	8.0
3	0.0	0.0	3.0	8.0	5.0	8.0
4	0.0	0.0	3.0	8.0	5.0	8.0
5	0.0	0.0	3.0	8.0	5.0	8.0
5A	0.0	0.0	3.0	8.0	5.0	8.0
6	0.0	0.0	3.0	8.0	5.0	8.0
6A	0.0	0.0	3.0	8.0	5.0	8.0
8	0.0	0.0	3.0	8.0	5.0	8.0
8A	0.0	0.0	3.0	8.0	5.0	8.0
9	0.0	0.0	3.0	8.0	5.0	8.0
9A	10.0	10.0	13.3	18.8	15.5	18.8
9B*	0.0	0.0	3.0	8.0	5.0	8.0
10	0.0	0.0	3.0	8.0	5.0	8.0

* Class 9B now includes all specialties previously in Class 9A except pediatricians who remain in Class 9A.

(d) Rates for policies providing excess coverage issued or renewed during the period July 1, 1992 through June 30, 1993 shall be as follows, and no surcharges shall be collected on these policies:

(1) For a first excess layer providing $1 million/$3 million of excess coverage above $1 million/$3 million primary coverage, and purchased directly by a physician, the rate shall be 30 percent of the $1 million/$3 million rate for primary coverage established for the Medical Malpractice Insurance Association in accordance with subdivision (c) of this section.

(2) For a first excess layer providing $1 million/$3 million of excess coverage above $1 million/$3 million primary coverage, and purchased by a hospital in accordance with section 18 of chapter 184 of the Laws of 1988 as amended by section 60 of chapter 165 of the Laws of 1991 and chapter 277 of the Laws of 1992, the rate shall be 32.2 percent of the $1 million/$3 million rate for primary coverage established for the Medical Malpractice Insurance Association in accordance with subdivision (c) of this section.

(3) For a second excess layer providing $1 million/$3 million of excess coverage above the underlying primary coverage and the first layer of excess coverage described in paragraph (1) or (2) of this subdivision, the rate shall be 22.5 percent of the $1 million/$3 million rate for primary coverage established for the Medical Malpractice Insurance Association in accordance with subdivision (c) of this section.

(e) Claims-made primary and excess coverage rates.

(1) Claims-made coverage rate. The rate for a claims-made policy shall be the corresponding occurrence rate multiplied by the appropriate claims-made factor, as follows:

*Year in Claims-Made Program*	*Claims-Made Factor*
First	31%
Second	64
Third	85
Fourth	94
Fifth	99
Sixth	102
Seventh	104
Eighth and later	105

(2) Optional extended reporting period (tail) rates:

(i) The rate for optional tail coverage required to be offered for a claims-made policy shall be the corresponding occurrence rate multiplied by the appropriate tail factor, as follows:

*Number of years completed in Claims-Made Program*	*Tail Factor*
One	74.8%
Two	122.1
Three	146.4
Four	162.4
Five	173.3
Six	181.0
Seven	186.7
Eight or more	190.6

(ii) For a policy terminated on a date other than its anniversary date, the tail factor shall be obtained by interpolation, on a daily basis, between the tail factors applicable to the preceding and following policy anniversaries.

(iii) For any policy written at a reduced rate because the insured was eligible for a new-doctor discount, the tail premium shall be reduced by the percentage that the current year's rate (exclusive of any surplus contributions) was reduced as a result of such new-doctor discount.

(f) Rates for claims-made policies where the physician, while receiving coverage under a claims-made policy, changes classification or territory.

(1) When a physician insured under a claims-made policy changes either classification, territory or both, the rate applicable to such physician shall be adjusted to reflect the fact that claims made under the policy after the change could include claims for occurrences which took place under the former classification or territory. The presence of a loading for pre-paid extended reporting period coverage in the rate structure complicates what would otherwise be a relatively simple calculation, in that the amount of such loading applicable to the difference in rates before and after the change must be considered. Accordingly, all insurers shall use the procedure established by paragraph (2) of this subdivision.

(2) The rates applicable to a physician who changes classification or territory shall, for a period of eight years following the effective date of such change, be calculated in accordance with the following procedure:

(i) Calculate the annual rate that would have applied had the physician made no change in classification or territory.

(ii) Subtract from the amount calculated above, the annual rate for the former classification or territory, corresponding to the appropriate claims-made step which would have applied had the insured physician initially entered the claims-made program when the change became effective. (Note: The first year step on the first year this calculation is done; the second year step on the second year, etc.)

(iii) Add to the result in subparagraph (ii) of this paragraph, the annual rate for the new classification or territory, corresponding to the appropriate claims-made step which would have applied had the insured physician initially entered the claims-made program when the change became effective. (Note: The first year step on the first year this calculation is done; the second year step on the second year, etc.)

(iv) Subtract from the result in subparagraph (iii) of this paragraph the annual rate for the new classification or territory which corresponds to the appropriate claims-made step applicable to this physician. (Note: This would be the same claims-made step as used in subparagraph [i] of this paragraph applied to the new classification or territory.)

(v) Determine the Change in Risk (CIR) factor applicable to this insured from the following table. Multiply the result in subparagraph (iv) of this paragraph by the appropriate CIR factor. (Note: The CIR factor is determined only once, when the insured makes a change in classification or territory. Once the CIR factor has been determined, it is used for all future calculations applicable to the subject change.)

*Last Completed Claims-Made Step Prior to Change*	*Change in Risk Factor*
One	.65
Two	.58
Three	.49
Four	.41
Five	.32
Six	.24
Seven	.16
Eight	.08
Nine or more	.00

(vi) Add the result in subparagraph (v) of this paragraph to the annual rate for the new classification or territory which corresponds to the appropriate claims-made step applicable to this physician. (Note: This is the same figure used in sub-paragraph [iv] of this paragraph.)

(3) All insurers providing claims-made coverage subject to this Part shall:

(i) amend their policy applications to require the applicant to identify every insurer which previously provided coverage on a claims-made basis and to indicate if and how any classification or territory has been modified since first entry into the claims-made program;

(ii) confirm the classification or territory information with the previous insurer or insurers; and

(iii) furnish, upon the written request of an insurer, or former or current insured, classification or territory information relative to such insured or former insured.

(4) For the purposes of this subdivision, the term classification shall include changes from full-time to part-time or part-time to full-time practice.

(g) Excess coverage-types of policies; required tail.

(1) Pursuant to chapter 277 of the Laws of 1992, excess coverage policies providing $1 million/$3 million of excess coverage above $1 million/$3 million of primary coverage, purchased by general hospitals on behalf of physicians, shall cover occurrences from July 1, 1992 through June 30, 1993. Accordingly, all physicians' and surgeons' medical malpractice liability insurers, and only such insurers, that issue such an excess policy on a claims-made basis shall simultaneously issue full tail coverage.

(2) Except where required to be issued on a claims-made basis pursuant to section 5504 (f) of the Insurance Law, excess coverage policies issued or renewed on and after July 1, 1992 shall provide coverage on either an occurrence or claims-made basis, subject to paragraph (1) of this subdivision, provided that:

(i) an excess coverage policy shall be renewed on the same basis (occurrence or claims-made) as issued, except that the insured may choose to substitute claims-made for occurrence coverage;

(ii) if the insured so requests, an excess coverage policy issued by the same insurer that issued the underlying primary coverage shall be issued with the same type of coverage (occurrence or claims-made) as the primary coverage; and

(iii) the provisions of section 70.7(b)(2) of this Part continue to apply to all medical malpractice liability insurers.

(h) Rates for claims-made and tail excess coverage policies purchased by hospitals.

The aggregate rate for a claims-made excess policy and its simultaneously issued tail, purchased by a general hospital on behalf of physicians, shall equal the corresponding occurrence excess coverage rate.

(i) Required filings.

(1) No later than August 17, 1992, all physicians' medical malpractice liability insurers shall file required amended rate manual pages with the superintendent in accordance with the rates established by this Part. Insurers writing, or required to write, coverage for which rates are not specifically established by this Part shall file proposed rates with supporting documentation by August 17, 1992.

(2) A physicians' medical malpractice liability rate filed by a rate service organization on behalf of its members and subscribers shall be established in accordance with this Part and any such organization shall make appropriate filings by August 17, 1992.

(3) The rates and rating plans for medical malpractice liability insurance issued by an insurer to a Federal purchasing group and its members shall be established in accordance with the provisions of this Part, except that, if the insurer and purchasing group have complied with all applicable provisions of the Liability Risk Retention Act, 15 USC 3901 et seq. and Part 301 of this Title, and if the insurer submits rates or a rating plan affording advantages, based upon the purchasing group's loss and expense experience, not afforded to other persons, the superintendent shall review such submission, and thereafter establish rates or a rating plan, as appropriate, reflecting such advantages. Any such insurer presently issuing such coverage shall file proposed rates with adequate documentation by August 17, 1992.

Footnotes

[DAGGER] Obstetrician/gynecologists previously in Class 3 are now in Class 2 and orthepedic surgeons previously in Class 2 are now in Class 3.

* Class 15 now includes all specialties previously in Class 14 except neurologists (excluding the supervision, direction, or performance of myelography, angiography and/or pneumoencephalography) who remain in Class 14.