New York Codes, Rules and Regulations, Part 70, Section 70.17 - Physicians and surgeons medical malpractice policy provisions for the period commencing July 1, 1995; established rates | New York Codes, Rules and Regulations

(a) Section 40 of chapter 266 of the Laws of 1986, as amended by section 4 of chapter 256 of the Laws of 1993, requires the superintendent to establish rates for physicians and surgeons medical malpractice policies for the policy period July 1, 1993 through June 30, 1996 and establish a surcharge, of up to eight percent, on the rates for such medical malpractice policies for the policy period July 1, 1995 through June 30, 1996, if required to satisfy any deficiency for the policy periods July 1, 1985 through June 30, 1994.

(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 4 of chapter 256 of the Laws of 1993, 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. As a result of review and consideration, the superintendent has determined that a deficiency exists, in one instance, for the policy periods July 1, 1985 through June 30, 1994.

(c) Rates and surcharges for occurrence policies providing primary coverage, up to $1 million/$3 million, issued or renewed during the period July 1, 1995 through June 30, 1996, shall be as follows:

(1) For Academic Health Professionals Insurance Association, Frontier Insurance Company, Medical Liability Mutual Insurance Company and the Medical Malpractice Insurance Association, the rate adjustments shall be as indicated in paragraph (5) of this subdivision, which also reflects classification modifications approved by the superintendent in accordance with section 2307 (a) of the Insurance Law. No surcharges shall be collected for these insurers.

(2) For Group Council Mutual Insurance Company, rates shall be those established pursuant to section 70.16(c)(3) of this Part. In addition, a surcharge of four percent shall be collected for this insurer.

(3) For Physicians' Reciprocal Insurers, the rate adjustments shall be as indicated in paragraph (6) of this subdivision, which also reflects classification modifications approved by the superintendent in accordance with section 2307 (a) of the Insurance Law. No surcharge shall be collected for this insurer.

(4) For all other insurers, rates shall be those established by paragraph (1) 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.

(5) Rate and classification changes for Academic Health Professional Insurance Association, Frontier Insurance Company, Medical Liability Mutual Insurance Company and Medical Malpractice Insurance Association:

PREMIUM CLASS		DESCRIPTION OF CLASS	RATE CHANGE
Old	New
1	1	Neurosurgery	0.0%
2	2	Obstetrics and Gynecology	0.0%
3	3	Orthopedic Surgery	-5.0%
4	4	Gynecology Only (does not provide coverage for pre-natal care, obstetrical deliveries of any kind except for assistance at Cesarean Section, induced abortions or treatment of spontaneous abortions except for those in the first trimester); Otolaryngology (incl. otolaryngological, cosmetic plastic surgery); Plastic and Reconstructive Surgery; and Vascular Surgery	-5.0%
5	5	General Surgery	0.0%
6	6	Colon and Rectal Surgery and/or Proctology; Urology (incl. major surgery); Family/General Practice and Limited Major Surgery and/or Anesthesiology;	0.0%
7	6	Otolaryngology (excl. cosmetic plastic surgery);	0.4%*
8	6	Family/General Practice and Limited Major Surgery (no referred, surgery or abortions other than treatment of spontaneous abortions);	3.1%*
9	6	Neurology and/or Psychiatry (incl. the supervision, direction and/or performance of myelography, and/or angiography)	8.4%*
7	7	Anesthesiology	-5.0%
10	8	ENT (with surgery limited to minor procedures not including T&A); Industrial Medicine and Minor Surgery; and Family/General Practice with Minor Surgery	0.0%
11	9	Internal Medicine (incl. cardiac catheterization); and Ophthalmology (incl. major surgery)	0.0%
12	10	Computerized Tomography; Diagnostic Radiology Only; and Diagnostic Radiology and Radiotherapy	0.0%
13	11	Dermatology (incl. dermabrasion, hair transplants, micro-lipo injections, liposuction, face peels using Phenol, Mohs microsurgery and all procedures listed in Class 16, Dermatology); Internal medicine (excl. cardiac catheterization but incl. cardiology, gastroenterology, rheumatology, TB and lung diseases, endocrinology and medical oncology); Pediatrics (excl. T&A, other major surgery or general or spinal anesthesia); Radiotherapy Only; and Urology (incl. minor surgery)	0.0%
14	12	Emergency Medicine	10.0%*
14	13	Industrial Medicine (excl. surgery); Ophthalmology (with surgery limited to minor procedures); and Family/General Practice (no surgery)	0.0%
15	14	Neurology (excl. the supervision, direction or performance of myelography and/or angiography)	10.0%
16	15	Pathology/Hematology	0.0%
17	16	Allergy (incl. pediatric allergy); Dermatology (incl. the use of laser, face peels with agents other than Phenol, collagen injections and aclerotherapy, but excl. all procedures listed in Class 11, Dermatology); Ophthalmology (excl. surgery); Physical medicine, rehabilitation, preventive medicine, public health; and Psychiatry (excl. the supervision, direction or performance of myelography and/or angiography)	-5.0%

* The above schedule includes the following revised or new classifications:

* A revised Class 6 adding Otolaryngology (excl. cosmetic plastic surgery) previously Class 7, Family/General Practice and Limited Major Surgery (no referred, surgery or abortions other than treatment of spontaneous abortions) previously in Class 8 and Neurology and/or Psychiatry (incl. the supervision, direction and/or performance of myelography, and/or angiography) previously in Class 9; the rate increases for these specialties resulted solely from the movement of these specialties from lower rated classes to a higher rated class.

* A new Class 12, consisting of Emergency Medicine, previously in Class 14; rates for new Class 12 are 10.0% higher than old Class 14 (which has now been renumbered as Class 13).

(6) Rate and classification changes for Physicians' Reciprocal Insurers:

PREMIUM CLASS		DESCRIPTION OF CLASS	RATE CHANGE
Old	New
1	1A	Neurosurgery	16.1%*
1	1B	Obstetrics and Gynecology; and Open heart surgery	6.1%
2	2	Orthopedic Surgery	2.3%
3	3	Emergency Medicine; and Gynecology (incl. gynecological surgery)	2.3%
4	4	Surgeon Specialists	6.1%
5	5	General Surgery	11.1%
5A	5A	Otolaryngology; Proctology; Urology; Physicians with limited major surgery	11.1%
6A	6A	Neonatology	11.1%
6B	6B	Anesthesiology	-3.1%
8	8	Neurology	11.1%
8A	8A	Physicians, minor surgery or assisting in major surgery	11.1%
8B	8B	Radiology	25.0%
9	9	Internal medicine, no surgery	11.1%
9C	9C	Family and general practice (excluding Ophthalmology, no surgery)	11.1%
9D	9D	Pediatrics	25.0%
9E	9E	Allergy; Dermatology; General Practice; and Public Health, no surgery	11.1%
9C	9E	Ophthalmology, no surgery	-18.7%*
10	10	Administrative Medicine; and Physical Medicine and rehabilitation	11.1%

* The above schedule includes the following new or revised classifications:

* A new Class 1A, consisting of Neurosurgery, previously in Class 1; rates for new Class 1A are 16.1% higher than old Class 1.

* A revised Class 9E adding Ophthalmology (no surgery), previously in Class 9C; the overall rate decrease for this specialty resulted from the movement of the specialty from a higher rated class to a lower rated class coupled with an increase in the class relativity for Class 9E.

In addition, the following specialties, which were previously not written by the company, are being added:

Full-time surgical assistant	Class 5A
Physical Medicine and Rehabilitation with invasive procedures	Class 8A
Neurology excluding invasive procedures	Class 9

(d) Rates for policies providing excess coverage issued or renewed during the period July 1, 1995 through June 30, 1996 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 24.3 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 chapter 81 of the Laws of 1995, the rate shall be 26.2 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 17.4 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 should use the procedure established by section 70.14(f)(2) of this Part.

(2) 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.

(3) 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.

(1) Pursuant to chapter 81 of the Laws of 1995, excess coverage policies providing $1 mi1lion/$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, 1995 through June 30, 1996. Accordingly, all physicians' and surgeons' medical malpractice liability insurers, and only such insurers, shall issue such an excess policy on an occurrence basis.

(2) Excess coverage policies issued or renewed on and after July 1, 1995 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) Required filings.

(1) No later than August 15, 1995, 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 15. 1995.

(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 15, 1995.

(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., (see section 70.1[m] of this Part) 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 15, 1995.