New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter III - Policy and Certificate Provisions
Subchapter B - Property and Casualty Insurance
Part 70 - Medical Malpractice Insurance Rate Modifications, Provisional Rates, Required Policy Provisions And Availability Of Additional Coverages
Section 70.21 - Physicians and surgeons medical malpractice policy provisions for the period commencing July 1, 1999; established rates
Universal Citation: 11 NY Comp Codes Rules and Regs ยง 70.21
Current through Register Vol. 46, No. 39, September 25, 2024
(a) Section 40 of chapter 266 of the Laws of 1986, as amended by section 9 of chapter 147 of the Laws of 1999, requires the superintendent to establish rates for physicians and surgeons medical malpractice policies for the policy period July 1, 1999, through June 30, 2000, and establish a surcharge, of up to eight percent, on the rates for such medical malpractice policies for the policy period July 1, 1999, through June 30, 2000, if required to satisfy any deficiency for the policy periods July 1, 1985, through June 30, 1998.
(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 9 of chapter 147 of the Laws of 1999, 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, 1998.
(c) Rates and surcharges for occurrence policies providing primary coverage, up to $1 million/$3 million, issued or renewed during the period July 1, 1999, through June 30, 2000, shall be as follows:
(1) For Academic Health Professionals
Insurance Association, the rate adjustments shall be as indicated in paragraph
(8) of this subdivision, which also reflects territory 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 Frontier Insurance Company, the rate adjustments shall be as indicated in
paragraph (9) of this subdivision, which also reflects territory modifications
approved by the superintendent in accordance with section
2307
(a) of the Insurance Law. No surcharge shall
be collected for this insurer.
(3)
For Group Council Mutual Insurance Company, rates shall be those established
pursuant to section
70.20(c)(3) of
this Part. In addition, a surcharge of four percent shall be collected for this
insurer.
(4) For Medical Liability
Mutual Insurance Company, the rate adjustments shall be as indicated in
paragraph (8) of this subdivision, which also reflects territory modifications
approved by the superintendent in accordance with section
2307
(a) of the Insurance Law. No surcharge shall
be collected for this insurer.
(5)
For the Medical Malpractice Insurance Association, the rate adjustments shall
be as indicated in paragraph (8) of this subdivision, which also reflects
territory 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 Physicians Reciprocal Insurers, the rate adjustments shall be as indicated
in paragraph (10) of this subdivision, which also reflects classification and
territory modifications approved by the superintendent in accordance with
section
2307
(a) of the Insurance Law. No surcharge shall
be collected for this insurer.
(7)
For all other insurers, rates shall be those established by paragraph (4) of
this subdivision, modified by the difference between the insurer's expenses and
those of the Medical Liability Mutual Insurance Company, 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.
(8) Rate adjustments for the Academic Health
Professionals Insurance Association, the Medical Liability Mutual Insurance
Company and the Medical Malpractice Insurance Association:
(9) Rate
adjustments for the Frontier Insurance Company:
(10) Rate
adjustments for Physicians Reciprocal Insurers:
(d) Rates for policies providing excess coverage issued or renewed during the period July 1, 1999, through June 30, 2000, 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 11.7
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 147 of
the Laws of 1999, the rate shall be 12.4 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.
(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 6.2 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.
(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 147
of the Laws of 1999, 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, 1999, through June 30, 2000. 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, 1999, 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 January 10, 2000, 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 January
10, 2000.
(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 January 10,
2000.
(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 January 10,
2000.
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