Wisconsin Administrative Code
Office of the Commissioner of Insurance
Chapter Ins 17 - Health Care Liability Insurance Patients Compensation Fund
Section Ins 17.25 - Wisconsin health care liability insurance plan
Universal Citation: WI Admin Code ยง Ins 17.25
Current through August 26, 2024
(1) FINDINGS.
(a) Legislation has been enacted authorizing
the commissioner to promulgate a plan to provide health care liability
insurance and liability coverage normally incidental to health care liability
insurance for risks in this state which are equitably entitled to but otherwise
unable to obtain such coverage, or to call upon the insurance industry to
prepare plans for the commissioner's approval.
(b) Health care liability insurance,
liability coverage normally incidental to health care liability insurance or
both are not readily available in the voluntary market for the persons
specified in sub. (5) (a).
(c) A
plan for providing health care liability insurance and liability coverage
normally incidental to health care liability insurance should be enacted
pursuant to ch. 619, Stats.
(2) PURPOSE. This section implements ss. 619.01 and 619.04, Stats., by establishing procedures and requirements for a mandatory risk sharing plan to provide health care liability insurance coverage and liability coverage normally incidental to health care liability insurance on a self-supporting basis for the persons specified in sub. (5) (a) and for their employees acting within the scope of their employment and providing health care services. This section is also intended to encourage improvement in reasonable loss prevention measures and to encourage the maximum use of the voluntary market.
(3) COVERAGE; EXCLUSIONS.
(a) Each policy of health care liability
insurance coverage issued by the plan shall provide occurrence coverage for all
of the following:
1. Providing or failing to
provide health care services to a patient.
2. Peer review, accreditation and similar
professional activities in conjunction with and incidental to the provision of
health care services, when conducted in good faith by the insured or an
employee of the insured.
3.
Utilization review, quality assurance and similar professional activities in
conjunction with and incidental to the provision of health care services, when
conducted in good faith by the insured or an employee of the insured.
(b) Each policy issued by the plan
shall also provide for supplemental payments in addition to the limits of
liability under par. (d), including attorney fees, litigation expenses, costs
and interest.
(c) The health care
liability insurance coverage issued by the plan shall exclude coverage for all
of the following:
1. Criminal acts.
2. Intentional sexual acts and other
intentional torts.
3. Restraint of
trade, anti-trust violations and racketeering.
4. Defamation.
5. Employment, religious, racial, sexual, age
and other unlawful discrimination.
6. Pollution resulting in injury to a 3rd
party.
7. Acts that occurred before
the effective date of the policy of which the insured was aware or should have
been aware.
8. Incidents occurring
while and insured's license to practice is suspended, revoked, surrendered or
otherwise terminated.
9. Criminal
and civil fines, forfeitures and other penalties.
10. Punitive and exemplary damages.
11. Liability of the insured covered by other
insurance, such as worker's compensation, automobile, fire or general
liability.
12. Liability arising
out of the ownership, operation or supervision by the insured of a hospital,
nursing home or other health care facility or business enterprise.
13. Liability of others assumed by the
insured under a contract or agreement.
(d) The maximum limits of liability for
coverage under par. (a) are the following:
1.
For all occurrences before July 1, 1987, $200,000 for each occurrence and
$600,000 per year for all occurrences in any one policy year.
2. For occurrences on or after July 1, 1987,
and before July 1, 1988, $300,000 for each occurrence and $900,000 for all
occurrences in any one policy year.
3. Except as provided in subds. 4. and 5.,
for occurrences on or after July 1, 1988, and before July 1, 1997, $400,000 for
each occurrence and $1,000,000 for all occurrences in any one policy
year.
4. Except as provided in
subd. 5., for occurrences on or after July 1, 1997, $1,000,000 for each
occurrence and $3,000,000 for all occurrences in any one policy year.
5. For podiatrists licensed under ch. 448,
Stats., for occurrences on and after November 1, 1989, $1,000,000 for each
occurrence and $1,000,000 for all occurrences in any one policy year.
(e) The plan may also issue
liability coverage normally incidental to health care liability insurance
including all of the following:
1. Owners,
landlords and tenants liability insurance.
2. Owners and contractors protective
liability insurance.
3. Completed
operations and products liability insurance.
4. Contractual liability insurance.
5. Personal injury liability
insurance.
(f) The
maximum limits of liability for coverage under par. (e) are $1,000,000 per
claim and $3,000,000 aggregate for all claims in any one policy year.
(5) ELIGIBILITY FOR PLAN COVERAGE. All of the following are eligible for insurance under the plan:
(a) A medical or osteopathic physician or
podiatrist licensed under ch. 448, Stats.
(b) A nurse anesthetist or nurse midwife
licensed under ch. 441, Stats.
(c)
A nurse practitioner licensed under ch. 441, Stats., who meets at least one of
the requirements specified under s.
DHS 105.20(1).
(d) A partnership comprised of, and organized
and operated in this state for the primary purpose of providing the medical
services of, physicians, podiatrists, nurse anesthetists, nurse midwives, nurse
practitioners or cardiovascular perfusionists.
(e) A corporation or general partnership
organized and operated in this state for the primary purpose of providing the
medical services of physicians, podiatrists, nurse anesthetists, nurse
midwives, nurse practitioners or cardiovascular perfusionists.
(f) An operational cooperative sickness care
plan organized under ss.
185.981 to
185.985,
Stats., which directly provides services through salaried employees in its own
facility.
(g) An accredited
teaching facility conducting approved training programs for medical or
osteopathic physicians licensed or to be licensed under ch. 448, Stats., or for
nurses licensed or to be licensed under ch. 441, Stats.
(h) A hospital, as defined in s.
50.33(2) (a) and (c), Stats., but excluding facilities
exempted by s.
50.39(3),
Stats., except as provided in par. (k).
(i) An entity operated in this state that is
an affiliate of a hospital and that provides diagnosis or treatment of, or care
for, patients of the hospital.
(j)
A nursing home, as defined in s.
50.01(3),
Stats., whose operations are combined as a single entity with a hospital,
whether or not the nursing home operations are physically separate from the
hospital operations.
(k) A health
care facility owned or operated by a county, city, village or town in this
state, or by a county department established under s.
51.42 or
51.437,
Stats., if the facility would otherwise be eligible for coverage under this
subsection.
(L) A corporation
organized to manage approved training programs for medical or osteopathic
physicians licensed under ch. 448, Stats.
(m) A cardiovascular perfusionist.
(n) An ambulatory surgery center, as defined
in s.
DHS 101.03(10).
(6) DEFINITIONS.
(a) In this subsection:
1. "Personal injury liability insurance"
means any insurance coverage against loss by the personal injury or death of
any person for which loss the insured is liable. "Personal injury liability
insurance" includes the personal injury liability component of multi-peril
policies, but does not include steam boiler insurance authorized under s.
Ins 6.75(2)
(a), worker's compensation insurance
authorized under s.
Ins 6.75(2)
(k) or medical expense coverage authorized
under s.
Ins 6.75(2) (d) or
(e).
2. "Premiums written" means gross direct
premiums less return premiums, dividends paid or credited to policyholders and
the unused or unabsorbed portions of premium deposits, with respect to personal
injury liability insurance covering insureds or risks residing or located in
this state.
(b)
1. Each insurer authorized in this state to
write personal injury liability insurance, except a town mutual organized under
ch. 612, Stats., is a member of the plan.
2. An insurer's membership in the plan
terminates if the insurer is no longer authorized to write personal injury
liability insurance in this state. The effective date of termination shall be
the last day of the plan's current fiscal year. A terminated insurer shall
continue to be governed by this subsection until it completes all of its
obligations under the plan.
3.
Subject to the approval of the commissioner, the board may charge a reasonable
annual membership fee, not to exceed $50.00.
(c) If the funds available to the plan at any
time are not sufficient for the sound financial operation of the plan, the
board shall assess the members an amount sufficient to remedy the
insufficiency. Each member shall contribute according to the proportion that
that member's premiums written during the preceding calendar year bears to the
aggregate premiums written by all members during the preceding calendar year.
The amounts of premiums written shall be determined on the basis of the annual
statements and other reports filed by the members with the commissioner.
Assessments are subject to any credit plan developed under sub. (8) (a) 4. When
the amount of the assessment is recouped under s.
619.01(1) (c) 2, Stats., each member shall be
reimbursed the amount of that member's assessment.
(d) The board shall report to the
commissioner the name of any member that fails to pay within 30 days any
assessment levied under par. (c).
(7) BOARD MEETINGS; QUORUM. The board shall meet as often as required to perform the general duties of supervising the administration of the plan, or at the call of the commissioner. Seven members of the board shall constitute a quorum.
(8) POWERS AND DUTIES OF THE BOARD. The board may do any of the following:
(a)
1. Invest, borrow and disburse funds, budget
expenses, levy assessments and cede and assume reinsurance.
2. Appoint a manager or one or more agents to
perform the duties designated by the board.
3. Appoint advisory committees of interested
persons, not limited to members of the plan, to advise the board in the
fulfillment of its duties and functions.
4. Develop an assessment credit plan subject
to the approval of the commissioner, by which a member of the plan receives a
credit against an assessment levied under sub. (6) (c), based on voluntarily
written health care liability insurance premiums in this state.
5. Take any action consistent with law to
provide the appropriate examining boards or the department of health services
with appropriate claims information.
6. Perform any other act necessary or
incidental to the proper administration of the plan.
(b) The board shall do all of the following:
1. Develop rates, rating plans, rating and
underwriting rules, rate classifications, rate territories and policy forms for
the plan.
2. Ensure that all
policies written by the plan are separately coded so that appropriate records
may be compiled for purposes of calculating the adequate premium level for each
classification of risk, and performing loss prevention and other studies of the
operation of the plan.
3. Subject
to the approval of the commissioner, determine the eligibility of an insurer to
act as a servicing company to issue and service the plan's policies. If no
qualified insurer elects to be a servicing company, the board shall assume
these duties on behalf of member companies.
4. Enter into agreements and contracts as
necessary for the execution of this section.
5. By May 1 of each year, report to the
members of the plan and to the standing committees on insurance in each house
of the legislature summarizing the activities of the plan in the preceding
calendar year.
(10) APPLICATION FOR INSURANCE.
(a) Any person specified in sub. (5) may
submit an application for insurance by the plan directly or through any
licensed agent. Each application shall request coverage for the applicant's
partnership or corporation, if any, and for the applicant's employees acting
within the scope of their employment and providing health care services, unless
the partnership, corporation or employees are covered by other professional
liability insurance.
(b) The plan
may bind coverage.
(c) Within 8
business days after receiving an application, the plan shall notify the
applicant whether the application is accepted, rejected or held pending further
investigation. Any applicant rejected by the plan may appeal the decision to
the board as provided in sub. (16).
(cm) The board may authorize retroactive
coverage by the plan for a health care provider, as defined in s.
655.001(8),
Stats., if the provider submits a timely request for retroactive coverage
showing that the failure to procure coverage occurred through no fault of the
provider and despite the fact that the provider acted reasonably and in good
faith. The provider shall furnish the board with an affidavit describing the
necessity for the retroactive coverage and stating that the provider has no
notice of any pending claim alleging malpractice or knowledge of a threatened
claim or of any occurrence that might give rise to such a claim.
(d) If the application is accepted, the plan
shall deliver a policy to the applicant upon payment of the premium.
(12) RATES, RATE CLASSIFICATIONS AND FILINGS.
(a)
1. In developing rates and rate
classifications, as provided under sub. (8) (b) 1., the board shall ensure that
the plan complies with ss.
619.01(1) (c) 2 and
619.04(5) and ch. 625, Stats.
2. Rates shall
be calculated in accordance with generally accepted actuarial principles, using
the best available data.
3. Rates
shall be calculated on a basis which will make the plan self-supporting but may
not be excessive. Rates shall be presumed excessive if they produce long-term
excess funds over the total of the plan's unpaid losses, including reserves for
losses incurred but not yet reported, unpaid loss adjustment expenses,
additions to the surplus established under s.
619.01(1)
(c) 2, Stats., and s.
Ins 51.80(3) and (4), the premium
assessment under s.
619.01(8m),
Stats., and other expenses.
4. The
board shall annually determine if the plan has accumulated excess funds as
described under subd. 3. and, if so, the board shall return the excess funds to
the insureds by means of refunds or prospective rate decreases according to a
distribution method and formula established by the board.
5. Rates shall be calculated in accordance
with generally accepted actuarial principles, using the best available data.
a. In establishing the plan's rates, the
board shall use loss and expense experience in this state to the extent it is
statistically credible supplemented by relevant data from outside this state
including, but not limited to, data provided by other insurance companies, rate
service organizations or governmental agencies.
b. The board shall annually review the plan's
rates using the experience of the plan, supplemented first by the experience of
coverage provided in this state by other insurers and, to the extent necessary
for statistical credibility, by relevant data from outside this
state.
6. The loss and
expense experience used in establishing and revising rates shall be adjusted to
indicate as nearly as possible the loss and expense experience which will
emerge on policies issued by the plan during the period for which the rates
were being established. For this purpose loss experience shall include paid and
unpaid losses, a provision for incurred but not reported losses and both
allocated and unallocated loss adjustment expenses, giving consideration to
changes in estimated costs of unpaid claims and to indications of trends in
claim frequency, claim severity and level of loss expense.
7. Expense provisions included in the plan's
rates shall reflect reasonable prospective operating costs of the
plan.
(b) The board
shall establish and annually review plan classifications which, in addition to
the requirements under s.
619.04(5),
Stats., do all of the following to the extent possible:
1. Measure variations in exposure to loss and
in expenses based upon the best data available.
2. Reflect the past and prospective loss and
expense experience of risks insured in the plan and other relevant experience
from this and other states.
(c) With each rate and classification filing,
the board shall submit supporting information including, in the case of rate
filings, the existence, extent and nature of any subjective factors in the
rates based on the judgment of technical personnel, such as consideration of
the reasonableness of the rates compared with the cost of comparable available
coverage.
(12m) PREMIUM SURCHARGE TABLES.
(a) This subsection
implements s.
619.04(5m) (a), Stats., requiring the establishment of
an automatic increase in a provider's plan premium based on loss and expense
experience.
(b) In this subsection:
1. "Aggregate indemnity" has the meaning
given under s.
Ins 17.285(2)
(a).
2. "Closed claim" has the meaning given under
s.
Ins 17.285(2)
(b).
3. "Provider" has the meaning given under s.
Ins 17.285(2)
(d).
4. "Review period" has the meaning given
under s.
Ins 17.285(2)
(e).
(c) The following tables shall be used in
making the determinations required under s.
Ins 17.285 as
to the percentage increase in a provider's plan premium:
1. For a class 1 and class 8 physician,
podiatrist, nurse anesthetist, nurse midwife, nurse practitioner or
cardiovascular perfusionist:
|
Aggregate Indemnity During Review Period |
Number of Closed Claims During Review Period |
||||
|
1 |
2 |
3 |
4 or more |
||
|
Up to |
$ 118,000 |
0% |
0% |
0% |
0% |
|
$118,001 to |
$ 585,000 |
0% |
10% |
25% |
50% |
|
$585,001 to |
$1,571,000 |
0% |
25% |
50% |
100% |
|
Greater Than |
$1,571,000 |
0% |
50% |
100% |
200% |
2. For
a class 2 physician:
|
Aggregate Indemnity During Review Period |
Number of Closed Claims During Review Period |
||||
|
1 |
2 |
3 |
4 or more |
||
|
Up to |
$ 193,000 |
0% |
0% |
0% |
0% |
|
$193,001 to |
$ 779,000 |
0% |
10% |
25% |
50% |
|
$779,001 to |
$1,836,000 |
0% |
25% |
50% |
100% |
|
Greater Than |
$1,836,000 |
0% |
50% |
100% |
200% |
3. For
a class 3 physician:
|
Aggregate Indemnity During Review Period |
Number of Closed Claims During Review Period |
||||
|
1 |
2 |
3 |
4 or more |
||
|
Up to |
$ 211,000 |
0% |
0% |
0% |
0% |
|
$211,001 to |
$ 852,000 |
0% |
10% |
25% |
50% |
|
$852,001 to |
$ 2,215,000 |
0% |
25% |
50% |
100% |
|
Greater Than |
$ 2,215,000 |
0% |
50% |
100% |
200% |
4. For
a class 4 physician:
|
Aggregate Indemnity During Review Period |
Number of Closed Claims During Review Period |
||||
|
1 |
2 |
3 |
4 or more |
||
|
Up to |
$ 302,000 |
0% |
0% |
0% |
0% |
|
$302,001 to |
$1,012,000 |
0% |
10% |
25% |
50% |
|
$1,012,001 to |
$2,886,000 |
0% |
25% |
50% |
100% |
|
Greater Than |
$2,886,000 |
0% |
50% |
100% |
200% |
5. For
a class 5 A physician:
|
Aggregate Indemnity During Review Period |
Number of Closed Claims During Review Period |
||||
|
1 |
2 |
3 |
4 or more |
||
|
Up to |
$ 244,000 |
0% |
0% |
0% |
0% |
|
$244,001 to |
$ 892,000 |
0% |
10% |
25% |
50% |
|
$892,001 to |
$2,328,000 |
0% |
25% |
50% |
100% |
|
Greater Than |
$2,328,000 |
0% |
50% |
100% |
200% |
6. For
a class 5 physician:
|
Aggregate Indemnity During Review Period |
Number of Closed Claims During Review Period |
|||||
|
1 |
2 |
3 |
4 |
5 or more |
||
|
Up to |
$ 676,000 |
0% |
0% |
0% |
0% |
0% |
|
$676,001 to |
$1,033,000 |
0% |
0% |
10% |
25% |
50% |
|
$1,033,001 to |
$1,769,000 |
0% |
0% |
25% |
50% |
75% |
|
$1,769,001 to |
$3,923,000 |
0% |
0% |
50% |
75% |
100% |
|
Greater Than |
$3,923,000 |
0% |
0% |
75% |
100% |
200% |
7. For
a class 6 physician:
|
Aggregate Indemnity During Review Period |
Number of Closed Claims During Review Period |
|||||
|
1 |
2 |
3 |
4 |
5 or more |
||
|
Up to |
$ 731,000 |
0% |
0% |
0% |
0% |
0% |
|
$731,001 to |
$1,163,000 |
0% |
0% |
10% |
25% |
50% |
|
$1,163,001 to |
$1,982,000 |
0% |
0% |
25% |
50% |
75% |
|
$1,982,001 to |
$4,215,000 |
0% |
0% |
50% |
75% |
100% |
|
Greater Than |
$4,215,000 |
0% |
0% |
75% |
100% |
200% |
8. For
a class 7 physician:
|
Aggregate Indemnity During Review Period |
Number of Closed Claims During Review Period |
|||||
|
1 |
2 |
3 |
4 |
5 or more |
||
|
Up to |
$ 804,000 |
0% |
0% |
0% |
0% |
0% |
|
$804,001 to |
$1,292,000 |
0% |
0% |
10% |
25% |
50% |
|
$1,292,001 to |
$2,194,000 |
0% |
0% |
25% |
50% |
75% |
|
$2,194,001 to |
$4,482,000 |
0% |
0% |
50% |
75% |
100% |
|
Greater Than |
$4,482,000 |
0% |
0% |
75% |
100% |
200% |
9. For
a class 9 physician:
|
Aggregate Indemnity During Review Period |
Number of Closed Claims During Review Period |
|||||
|
1 |
2 |
3 |
4 |
5 or more |
||
|
Up to |
$1,861,000 |
0% |
0% |
0% |
0% |
0% |
|
$1,861,001 to |
$2,616,000 |
0% |
0% |
10% |
25% |
50% |
|
$2,616,001 to |
$4,467,000 |
0% |
0% |
25% |
50% |
75% |
|
$4,467,001 to |
$10,294,000 |
0% |
0% |
50% |
75% |
100% |
|
Greater Than |
$10,294,000 |
0% |
0% |
75% |
100% |
200% |
(14) PLAN BUSINESS; CANCELLATION AND NONRENEWAL.
(a) The plan may not cancel or
refuse to renew a policy except for one or more of the following reasons:
1. Nonpayment of premium.
2. Revocation of the license of the insured
by the appropriate licensing board.
3. Revocation of accreditation, registration,
certification or other approval issued to the insured by a state or federal
agency or national board, association or organization.
4. If the insured is not licensed,
accredited, registered, certified or otherwise approved, failure to provide
evidence that the insured continues to provide health care services in
accordance with the code of ethics applicable to the insured's profession, if
the board requests such evidence.
(b) Each notice of cancellation or nonrenewal
under par. (a) shall include a statement of the reason for the cancellation or
nonrenewal and a conspicuous statement that the insured has the right to a
hearing as provided in sub. (16).
(15) COMMISSION.
(a) If the application designates a licensed
agent, the plan shall pay the agent a commission for each new or renewal policy
issued, as follows:
1. To a health care
provider specified in sub. (5) (a) to (e) or (m), 15% of the premium or $150,
whichever is less.
2. To a health
care provider specified in sub. (5) (f) to (L) or (n), 5% of the annual premium
or $2,500 per policy period, whichever is less.
(b) An agent need not be listed by the
insurer that acts as the plan's servicing company to receive a commission under
par. (a).
(c) If the applicant does
not designate an agent on the application, the plan shall retain the
commission.
(16) RIGHT TO HEARING. Any person satisfying the conditions specified in s. 227.42(1), Stats., may request a hearing under ch. Ins 5 within 30 days after receiving notice of the plan's action or failure to act with respect to a matter affecting the person.
(18) INDEMNIFICATION.
(a) The plan shall indemnify
against any cost, settlement, judgment and expense actually and necessarily
incurred in connection with the defense of any action, suit or proceeding in
which a person is made a party because of the person's position as any of the
following:
1. A member of the board or any of
its committees or subcommittees.
2.
A member of or a consultant to the peer review council under s.
655.275,
Stats.
3. A member of the
plan.
4. The manager or an officer
or employee of the plan.
(b) Paragraph (a) does not apply if the
person is judged, in the action, suit or proceeding, to be liable because of
willful or criminal misconduct in the performance of the person's duties under
par. (a) 1. to 4.
(c) Paragraph (a)
does not apply to any loss, cost or expense on a policy claim under the
plan.
(d) Indemnification under
par. (a) does not exclude any other legal right of the person
indemnified.
(19) APPLICABILITY. Each person insured by the plan is subject to this section as it existed on the effective date of the person's policy. Any change in this section during the policy term applies to the insured as of the renewal date.
See the table of Appellate Court Citations for Wisconsin appellate cases citing s. Ins 17.25.
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