New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter V - Rates And Rating Organizations
Subchapter B - Commercial And Industrial Risks
Part 152 - Physicians And Surgeons Professional Insurance Merit Rating Plan
Section 152.1 - Preamble

(a) Section 2343(d) of the Insurance Law requires that the Insurance Department promulgate a regulation establishing a Physicians and Surgeons Professional Liability Merit Rating Plan to take effect on January 1, 1986. A merit rating plan is a system of rules for imposing rate surcharges or credits, within the existing class and territory matrix, based upon an individual's past history of claims or disciplinary actions. The plan is intended to produce a more accurate individual premium by using past claim history to predict the likelihood of future claims.

(b) At the time this regulation was first promulgated some insurers had a formal merit rating plan, while others imposed surcharges and credits on an ad hoc judgmental basis. The department believed it was in the best interests of insurers, physicians, and the public to maintain stability in the rating system by requiring all insured physicians to be experience-rated under the same set of criteria. A physician's merit rating plan was established by section 152.3 of this Part and all insurers were required to utilize that plan, unless the superintendent approved the use of an alternative plan pursuant to section 152.4 of this Part. The plan, which applies to all claims-made and occurrence policies, is intended to be revenue-neutral: i.e., any additional funds generated by surcharges must be offset by a rate discount factor that is applied to the base rates: over the long term and for all insurers within the entire system. After reviewing the use of the plan established by the Insurance Department and approved alternative merit rating plans, the superintendent has determined that the use of alternative merit rating plans may be expanded and that insurers need not be restricted to the use of the plan established in this Part.

(c) Section 2343(e) of the Insurance Law provides that the superintendent may approve an appropriate premium reduction for an insured physician who successfully completes a risk management course. Standards for the risk management course must be prescribed by the superintendent by regulation, and the course must be approved by the superintendent.

(d) The superintendent has determined that a premium credit as hereinafter permitted may be appropriate for all physicians who successfully complete an approved risk management program meeting the standards contained in section 152.6 of this Part (qualified risk management program).

(e) Section 42 of part A of chapter 1 of the Laws of 2002, as amended by section 16 of part J of chapter 82 of the Laws of 2002 and chapter 420 of the Laws of 2005, requires all physicians, surgeons and dentists participating in the Excess Medical Malpractice Insurance Program established by the Legislature in 1986 to participate in a proactive risk management program. Section 42 authorizes the superintendent to promulgate regulations that provide for the establishment and administration of proactive risk management programs.