Current through Register Vol. 46, No. 12, March 20, 2024
(a) Pending
enactment of chapter 266 of the Laws of 1986, which was signed into law on July
8, 1986, all physicians medical malpractice liability insurers were directed by
the Fifth Amendment to Part 70 of this Title (section
70.8 repealed by the eighth
amendment of this Part) that the rates for the policy period commencing July 1,
1986 and ending June 30, 1987 would continue to be, on a provisional basis, the
rates last approved by the department for said insurers. All insurers that
issued policies of medical malpractice liability insurance, as defined in
section 70.1(a) of this
Part, and all insurers with special licenses under section 6302 of the
Insurance Law that issued policies including such coverage were directed to
furnish their insureds with the following endorsement in connection with all
such policies in effect on and after July 1, 1986:
"THE PREMIUMS ON THIS POLICY FOR THE PERIOD OF COVERAGE
COMMENCING ON OR AFTER JULY 1, 1986 THROUGH JUNE 30, 1987 ARE PROVISIONAL AND
ARE SUBJECT TO UPWARD OR DOWNWARD ADJUSTMENT. INSUREDS MAY BE REQUIRED TO PAY
AN AMENDED PREMIUM RETROACTIVE TO JULY 1, 1986, OR THE ANNIVERSARY DATE OF THE
POLICY, WHICHEVER IS LATER, OR BE ENTITLED TO A CREDIT IF IT IS DETERMINED THAT
A DOWNWARD ADJUSTMENT IS NECESSARY IN ORDER TO MEET STATUTORY RATING
STANDARDS."
(b) Pursuant to
section 40 of chapter 266 of the Laws of 1986, the superintendent was directed
to establish rates for policies providing coverage for physicians medical
malpractice liability insurance for the periods commencing July 1, 1985 and
ending June 30, 1988. The rates established herein for policies issued or
renewed during the year July 1, 1985 through June 30, 1986 supersede the
provisional rates mandated by section
70.5 of this Part for primary
coverage and by section
70.6 of this Part for excess
coverage, and interim rate increases, if any, approved by the superintendent
for such policy year, and the rates established by prior amendment of this
section, where inconsistent with this amendment. The rates established herein
for policies issued or renewed during the year July 1, 1986 through June 30,
1987 supersede the rates established by prior amendment of this section, where
inconsistent with this amendment. Insurers shall charge a rate for physicians
medical malpractice liability insurance only as established by the
superintendent.
(c)
Base year
occurrence rates.
(1) For the purposes
of this Part, the base year occurrence rate shall be the occurrence rate
approved for the insurer by the superintendent for policies issued or renewed
during the year July 1, 1984 through June 30, 1985, as reduced by the
15-percent downward modification mandated by section
70.5(c)(1) of
this Part.
(2) For any insurer that
had no base year occurrence rate as provided in paragraph (1) of this
subdivision, but had a claims-made rate approved, the base year occurrence rate
shall be the third year claims-made rate approved by the superintendent, as
reduced by the 15-percent downward modification mandated by section
70.5(c)(1) of
this Part, multiplied by 1.158.
(3)
For any insurer that utilized a rate which has not been approved by the
superintendent, and for any insurer that has not previously written policies
subject to this Part, the base year occurrence rate shall be the approved rate
of another insurer, that is most appropriate for that insurer, together with
any modification which can be adequately supported. Such rate shall not be used
until established by the superintendent.
(d)
Rating plans.
(1) For any insurer that utilized a rating
plan which has not been approved by the superintendent, and for any insurer
that has not previously written policies subject to this Part, the rating plan
shall be the approved rating plan of another insurer that is most appropriate
for that insurer, together with any modification which can be adequately
supported. Such plan may not be used until it is approved by the
superintendent.
(e)
Occurrence primary and excess coverage rates.
(1) Rates for occurrence policies issued or
renewed during the year July 1, 1985 through June 30, 1986:
(i) For primary coverage, up to $1 million/$3
million, the rate shall be 14 percent greater than the base year occurrence
rate.
(ii) For a first excess layer
providing $1 million/$3 million of excess coverage above $1 million/$3 million
primary coverage the rate shall be 30 percent of the $1 million/$3 million rate
for primary coverage established in subparagraph (i) of this
paragraph.
(iii) For a second
excess layer providing $1 million/$3 million of excess coverage above the
underlying primary coverage and first layer of excess coverage described in
subparagraph (ii) of this paragraph, the rate shall be 20 percent of the $1
million/$3 million rate for primary coverage established in subparagraph (i) of
this paragraph.
(2)
Rates for occurrence policies issued or renewed during the year July 1, 1986
through June 30, 1987:
(i) For primary
coverage, up to $1 million/$3 million, the rate shall be nine percent greater
than that established pursuant to subparagraph (1)(i) of this
subdivision.
(ii) For a first
excess layer providing $1 million/$3 million of excess coverage above $1
million/$3 million primary coverage, the rate shall be 35 percent of the $1
million/$3 million rate for primary coverage established in subparagraph (i) of
this paragraph.
(iii) For a second
excess layer providing $1 million/$3 million of excess coverage above the
underlying primary coverage and first layer of excess coverage, described in
subparagraph (ii) of this paragraph, the rate shall be 24 percent of the $1
million/$3 million rate for primary coverage established in subparagraph (i) of
this paragraph.
(3)
Rates for occurrence policies issued or renewed during the year July 1, 1987
through June 30, 1988:
(i) For primary
coverage, up to $1 million/$3 million, the rate shall be nine percent greater
than that established pursuant to subparagraph (2)(i) of this
subdivision.
(ii) For a first
excess layer providing $1 million/$3 million of excess coverage above $1
million/$3 million primary coverage, the rate shall be 40 percent of the $1
million/$3 million rate for primary coverage established in subparagraph (i) of
this paragraph.
(iii) For a second
excess layer providing $1 million/$3 million of excess coverage above the
underlying primary coverage and first layer of excess coverage, described in
subparagraph (ii) of this paragraph, the rate shall be 28 percent of the $1
million/$3 million rate for primary coverage established in subparagraph (i) of
this paragraph.
(4) The
rates for the excess layers apply to policies purchased directly by physicians
and to policies purchased by general hospitals on behalf of their eligible
physicians, as required by section 19 of chapter 294 of the Laws of 1985 and by
section 18 of chapter 269 of the Laws of 1986.
(5) The rates for occurrence excess layer
policies providing coverage other than as specifically established herein shall
be established by the superintendent after a review of proposed rates and
supporting documentation to be submitted by each insurer writing such coverage,
in accordance with paragraph (j)(3) of this section. The superintendent shall
consider such submissions, as well as any other relevant factors, and will
thereafter establish a rate for each such excess layer.
(f)
Claims-made primary and excess
coverage rates.
(1) Claims-made primary
coverage rates. The claims-made rate for a particular primary coverage 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 |
(2) Optional extended reporting period (tail)
primary coverage rates.
(i) The rate for
optional tail coverage that is required to be offered for a particular
claims-made primary coverage 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 |
(ii) For a policy terminated on a date other
than the policy anniversary date, the tail factor shall be obtained by
interpolating, on a daily basis, between the tail factors applicable to the
last and next policy anniversaries.
(iii) For any policy that was written at a
reduced rate because the insured was eligible for a new doctor discount, the
tail premium shall be reduced by a percentage equal to the percentage that the
current year's rate (exclusive of any surplus contributions) was reduced as a
result of such new doctor discount.
(3) Rates for claims-made and tail excess
coverage policies purchased by hospitals. The aggregate rate for a claims-made
excess coverage policy and its simultaneously issued tail (as mandated by
subdivision [g] of this section) purchased by a general hospital on behalf of a
physician, shall be equal to the corresponding occurrence excess coverage
rate.
(4) Rates for claims-made and
tail excess coverage policies purchased by physicians directly. The rates for
the claims-made and tail first and second excess layers required to be offered
when purchased directly by a physician, and the rates for any other claims-made
and tail excess layer other than as specified herein, shall be established by
the superintendent after a review of proposed rates and supporting documents to
be submitted by each insurer writing, or required to write, such coverage, in
accordance with paragraph (j)(3) of this section. The superintendent shall
consider such submissions, as well as any other relevant factors, and will
thereafter establish a rate for each such excess layer.
(g)
Excess coverage-types of policies;
required tail.
(1) Pursuant to section
19 of chapter 294 of the Laws of 1985, and as established in section
70.7(c) of this
Part, excess coverage policies providing $1 million/$3 million of excess
coverage above $1 million/$3 million primary coverage, purchased by general
hospitals on behalf of physicians, afforded such coverage for "occurrences"
between July 1, 1985 through June 30, 1986 and were issued on an "occurrence"
basis.
(2) Pursuant to section 18
of chapter 266 of the Laws of 1986, excess coverage policies providing $1
million/$3 million of excess coverage above $1 million/$3 million primary
coverage, purchased by general hospitals on behalf of physicians, shall provide
such coverage for "occurrences" between July 1, 1986 and June 30, 1987.
Accordingly, all physicians medical malpractice liability insurers which issue
such an excess policy on a claims-made basis shall simultaneously issue full
tail coverage.
(3) Except where
required to be issued on a claims-made basis pursuant to section 5504(f),
excess coverage policies issued or renewed on and after July 1, 1986 shall
provide coverage on either an occurrence or claims-made basis, subject to
paragraph (2) of this subdivision, provided that:
(i) An excess coverage policy shall be
renewed on the same basis (occurrence or claims- made) as it was previously
issued, except that the insured may choose to substitute claims- made coverage
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.
(4) The provisions of section
70.7(b)(2) and
(d) of this Part continue to be applicable to
all medical malpractice liability insurers.
(h)
Segregated accounts and surcharge
accounts.
(1) Physicians medical
malpractice insurers shall establish:
(i)
policy year segregated accounts for premiums, reserves, and investment income
attributable to each policy year period; and
(ii) separate surcharge accounts for revenue
received from surcharges established by the superintendent.
(2) Reports concerning the
segregated and surcharge accounts required by paragraph (1) of this subdivision
shall be furnished on a prescribed form as set forth in section
70.9(l) of this
Part in accordance with the instructions set forth in section
70.9(m) of this
Part.
(3) No transfer shall be made
from a surcharge account to a segregated account:
(i) unless the segregated account for that
policy year falls below $1 million; or
(ii) if such transfer increases the
segregated account balance, at the end of that policy year, to more than $1.5
million.
(4) No
transfers shall be made from any segregated account or surcharge account to the
insurer"s unassigned surplus.
(5)
Each insurer shall collect and retain or remit any required surcharges, in
accordance with the criteria set forth herein, and shall be responsible for
determining, with regard to any insured for which it provides primary coverage
on or after July 1, 1989, the identity of each insurer that had provided that
insured primary coverage with a policy inception or renewal date on or after
July 1, 1985, and on or before June 30, 1999:
(i) If the insured has had coverage with a
policy inception or renewal date on or after July 1, 1985, and on or before
June 30, 1999, from an insurer that is entitled to a surcharge, in accordance
with section
70.22(c) of this
Part, the surcharge shall be collected from that insured by the insurer that
provides coverage on or after July 1, 1999, and shall then be retained by, or
remitted to, the insurer entitled thereto.
(ii) If the insured had coverage with a
policy inception or renewal date on or after July 1, 1985, and on or before
June 30, 1999, from two or more insurers entitled to a surcharge in accordance
with section
70.22(c) of this
Part, the surcharge shall be collected from that insured by the insurer that
provides the coverage on and after July 1, 1999, and shall then be retained by,
or remitted to, the insurers entitled thereto in proportion to the number of
policy inception or renewal dates for each insurer on or after July 1, 1985,
and on or before June 30, 1999.
(iii) If the insured had coverage with a
policy inception or renewal date on or after July 1, 1985, and on or before
June 30, 1999, only with insurers not entitled to a surcharge in accordance
with section
70.22(c) of this
Part, no surcharge shall be collected from that insured.
(iv) If the insured did not have coverage on
or after July 1, 1985, and on or before June 30, 1999, and is insured on or
after July 1, 1999, with an insurer entitled to a surcharge in accordance with
section 70.22(c) of this
Part, a surcharge shall be collected from the insured by that insurer, and then
remitted to the following insurers in the following proportions:
Medical Liability Mutual Insurance
Company |
55.85% |
Physicians Reciprocal Insurers |
20.90% |
Frontier Insurance Company |
5.90% |
Group Council Mutual Insurance
Company |
5.50% |
Medical Malpractice Insurance
Association |
3.45% |
HANYS |
2.65% |
Healthcare Underwriters Mutual Insurance
Company |
2.55% |
Academic Health Professionals Insurance
Association |
2.00% |
Legion Insurance Company |
1.15% |
(v) No surcharge shall be collected from an
insured with a policy inception or renewal date on or after July 1, 1985, and
on or before June 30, 1996, from an insurer entitled to a surcharge in
accordance with section
70.22(c) of this
Part, if the insured has not been insured on or after July 1, 1996, by an
insurer entitled to a surcharge.
(6) Any hospital, health maintenance
organization or other institution in this State that employs or otherwise is
associated with any physician who was insured by an insurer which is entitled
to receive a surcharge in accordance with section
70.22(c) of this
Part, having a policy inception or renewal date on or after July 1, 1985, and
on or before June 30, 1999 and which is responsible for responding in damages
for liability arising out of such physician's practice of medicine, shall
continue to ascertain the amount of the surcharge to be remitted and remit such
amount to that insurer in accordance with section 10 of part JJ of chapter 407
of the Laws of 1999.
(7) Amounts
received for a surcharge account shall be allocated in accordance with any
deficiencies recorded in the reports required by paragraph (2) of this
subdivision. If no deficiencies exist, the amount shall be paid directly into a
segregated surcharge account in the proportion that premiums for that year bear
to the total premiums for all policies with policy inception or renewal dates
on or after July 1, 1985, and on or before June 30, 2000. All surcharge
revenues collected by an insurer required to be remitted to another insurer
shall be remitted within 90 days of receipt by the first insurer.
(i)
Required filings-primary
coverage.
(1) All physicians medical
malpractice liability insurers were required to file by August 1, 1986 amended
rate manual pages with the superintendent in accordance with the primary
coverage rates established by prior amendments of this Part. Any such insurer
not previously issuing a policy on a claims-made form was required to file such
form for approval at the same time.
(2) All such insurers are required to file by
December 31, 1986, amended rate manual pages with the superintendent in
accordance with the primary coverage rates established by the eighth amendment
of this Part.
(3) All such insurers
are required to file by July 15, 1987 amended rate manual pages with the
superintendent in accordance with the primary coverage rates established by the
10th amendment of this Part.
(j)
Required filings-excess
coverage.
(1) All physicians medical
malpractice liability insurers were required to file by August 22, 1986 amended
rate manual pages with the superintendent in accordance with the excess
coverage rates established by prior amendments of this Part.
(2)
(i) All
such insurers are required to file by December 31, 1986 amended rate manual
pages with the superintendent in accordance with the excess coverage rates
specifically established by the eighth amendment of this Part.
(ii) All such insurers are required to file
by July 15, 1987 amended rate manual pages with the superintendent in
accordance with the excess coverage rates specifically established by the 10th
amendment of this Part.
(3) Insurers writing, or required to write
excess layers other than for which rates are specifically established herein
shall file, by December 31, 1986, proposed rates with supporting documentation.
For the policy year 1987-1988, such insureds shall file by July 15, 1987
proposed rates with supporting documentation.
(k)
Rate service organization.
(1) A physicians medical malpractice
liability insurance rate filed by a rate service organization on behalf of its
members and subscribers shall be established in accordance with this section.
Any such organization shall make the appropriate rate filing required by
subdivisions (i) and (j) of this section by December 31, 1986. For the policy
year 1987-1988, such organization shall make the appropriate rate filing by
July 15, 1987.
(2) A member or
subscriber of a rate service organization may adopt the established rates and
approved rating plan filed by the organization if said member or subscriber
notifies the department by December 31, 1986 and the department determines that
such filing is not inappropriate. For the policy year 1987-1988 the member or
subscriber shall notify the department by July 15, 1987 that it is adopting
such rates.
(l)
Purchasing groups.
The rates and rating plan for medical malpractice liability
insurance issued to a purchasing group and its members shall be established in
accordance with the provisions of this Part, except that, where the insurer and
the purchasing group have complied with all applicable provisions of the LRRA,
if an insurer submits rates or a rating plan affording advantages, based on 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
shall file by July 15, 1987 proposed rates adequately supported.
(m)
Required filing-rating
plans.
(1) All physicians medical
malpractice liability insurers shall file with the superintendent by August 15,
1987 adequate support for their rating plans (as defined in this Part, but
excluding the merit rating plan). Such insurers shall include actuarial data
and other relevant considerations.
(2) Any insurer who has adopted the rating
plan of another insurer, pursuant to subdivision (d) of this section, may
instead submit to the superintendent a statement to that effect. Such statement
will be deemed to be compliance with paragraph (1) of this
subdivision.