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JOSEPH G. MURPHY

ACTING COMMISSIONER OF INSURANCE



February 1, 2010






Acknowledgements



This report was prepared by Kevin Beagan, Gerald Condon, Caleb Huntington, Cara Blank, Matthew Mancini and Walter Horn, staff from both the Health Care Access Bureau and State Rating Bureau within the Division of Insurance ("Division") - to report on the market for medical malpractice insurance in Massachusetts.



In the financial section of the report, the Division does rely on the insurance companies, the National Association of Insurance Commissioners and other regulatory agencies for the accuracy of all reported information.















TABLE OF CONTENTS

Page Title

ii Acknowledgments

iii Table of Contents

iv Included Figures

1 Executive Summary

3 Massachusetts Health Care Professionals

3 Number of Professionals

4 Liability Coverage Requirements

5 Market for Medical Malpractice Coverage

5 History

6 Licensed Insurance Companies

7 Surplus Lines Carriers

8 Risk Retention Groups

10 Shares of the Market

11 Financial Results for Insurance Carriers

11 Premiums

11 Costs

12 Loss Ratios

14 Combined Ratios and Operating Ratios

15 Premiums for Medical Malpractice Coverage

15 Factors Affecting the Cost of Coverage

16 Massachusetts Premium Changes in the 2000s

19 Premiums Compared to Those of Other States



20 Conclusion



21 Appendix A-1: Medical Malpractice Insurance Companies

22 Appendix A-2: Medical Malpractice Surplus Lines Carriers

23 Appendix A-3: Medical Malpractice Risk Retention Groups

Included Figures





Page Figure

6 Figure 1 2008 Property and Casualty Premium by Line of Coverage
7 Figure 2 Share of 2007 and 2008 Insurance Company Market
8 Figure 3 Share of 2007 and 2008 Surplus Lines Carrier Market
9 Figure 4 Share of 2007 and 2008 Risk Retention Group Market
10 Figure 5 Shares of 2007 and 2008 Combined Medical Malpractice Market
10 Figure 6 Total Market 2002, 2005 and 2008 (Combined Medical Malpractice Market)
11 Figure 7 Total Market Premiums Earned (by Type of Company [2002, 2005 and 2008])
12 Figure 8 Total Market Losses (by Type of Company [2002, 2005 and 2008])
13 Figure 9 Total Market Loss Ratios
13 Figure 10 Total MA Market Loss Ratios by Type of Company
14 Figure 11 Calculation of Adjusted Combined Ratios - Licensed Companies
16 Figure 12 ProMutual Annual Rate Changes for Physicians/Surgeons (2001-2008)
18 Figure 13 NPDB 2006 Annual Report - Table 13
19 Figure 14 ProMutual's Rates for Claims Made Policies for Northeast States



Executive Summary



Health care professionals make daily decisions about treatment where they balance the need to use new procedures with the need to contain costs and avoid errors that may harm patients. When an error may have occurred and malpractice is claimed, medical malpractice insurance covers the cost to defend professionals and pay claims for damages.

Massachusetts law requires that doctors have medical malpractice coverage 1 and that insurance companies make medical malpractice coverage available on an equal basis to all doctors and certain other licensed healthcare providers willing to pay for it 2 . Despite the availability of coverage, some providers have indicated that the cost of coverage is forcing them to think about dropping their practices or moving to other states to practice.

Among the material presented in this report:

• Massachusetts medical malpractice premiums written through insurers, Risk Retention Groups and surplus lines insurers increased from $239 million in 2002 to $311 million in 2008; an increase of over 30% in six years. Risk Retention Groups account for 36.5% of the market; 13.5% more of the market in 2008 than in 2002.



During the first half of the 2000's, the market for medical malpractice coverage was in disarray nationally and in Massachusetts. Some national companies were dropping coverage and others were filing for double digit rate increases. Over the past few years, Massachusetts licensed medical malpractice insurers' net operating ratios - company expenditures compared to premiums - declined from 147.9% in 2002 to 87.2% in 2008.

Massachusetts' Health Care Professionals

Number of Professionals

In 2009 3 , there were over 237,000 individual health care professionals were licensed by state agencies to practice in the following licensing categories: 4

133,544 Nurses
22,078 Social Workers
20,740 Medical and Osteopathic Doctors
19,563 Allied Health Providers (Therapists and Athletic Trainers)
7,235 Dentists
6,329 Allied Mental Health Providers
5,358 Psychologists
8,450 Audiologists and Speech Pathologists
3,093 Respiratory Care Specialists (full and limited licenses)
2,114 Chiropractors
2,171 Dietitians/Nutritionists
1,662 Dispensing Opticians
2,003 Physician Assistants
1,553 Optometrists
980 Acupuncturists
570 Podiatrists
164 Hearing Instrument Specialists
117 Certified Health Officers
96 Perfusionists (full and provisional licenses)

In addition to the above-noted individual professionals, almost 1, 800 facilities and programs were licensed to operate under the following types of entities: 5

529 Nursing Homes/Rest Homes
298 Clinics
213 Home Health Care Agencies
181 Mammography Facilities
156 Hospitals (acute care, non-acute and virtual)
318 Ambulance services
74 Hospices



In order to practice in the Commonwealth of Massachusetts, a health care professional must be licensed or registered by agencies such as the Board of Registration in Medicine, 6 the Division of Professional Licensure, 7 Boards of Registration, 8 the Department of Mental Health 9 or the Department of Public Health. 10 A health care professional may also need to satisfy additional training to represent that he or she is specially trained or board-certified in a specialty and may need to meet other requirements to practice in a hospital or to be included in a health plan network.



Liability Coverage Requirements

Almost all working healthcare professionals have professional liability coverage to protect them from claims for damages if work is not completed according to agreed-upon standards or expected outcomes. Health care professionals require special liability coverage because of the special risk involved in treating living bodies.



Even when a health care professional's decision may be appropriate based upon available information, there adverse outcomes may occur with long-term financial consequences. Medical malpractice coverage pays the cost to defend the health care professional's reputation and cover the potential cost of damages.



In Massachusetts, insurance companies that offer medical malpractice coverage are required to make coverage available on a "take all comers" basis - without declining the coverage of any one professional - for all who fall within the following statutorily identified categories when that insurance company is making coverage available to anyone else who is in that category:

Doctor of Medicine;
Doctor of Osteopathy;
Doctor of Dental Science;
Physical Therapists and Physical Therapist Assistants, licensed under M.G.L. c. 112;
Doctor of Podiatry;
Doctor of Chiropractic;
Registered Nurses, licensed under the provisions of M.G.L. c. 112;
Interns, fellows or medical officers; and Licensed hospitals, clinics, or nursing homes, and their agents and employees. 11

All other health care professionals outside the statutorily identified categories may apply for coverage with insurance companies, but the company has the right to decline coverage for these other health care professionals if they do not meet the insurer's underwriting standards.

It is a specific requirement of licensure that medical doctors have medical malpractice coverage sufficient to protect against claims of at least $100,000 per claim and $300,000 per year 12 and that chiropractors are required to have coverage of at least $500,000 per claim and $1 million per year. 13 Hospitals and health plans may impose additional requirements to permit health care professionals to practice in the hospital or to be part of a health plan network.







Market for Medical Malpractice Coverage

History

Medical malpractice insurance has gone through a number of national and regional "crises" over the past 35 years, with years of stability and available coverage, followed by years of rate increases and decreased availability. Following the departure of a number of medical malpractice insurers from the Commonwealth in the 1970s, the Massachusetts Legislature created the Medical Malpractice Joint Underwriting Association ("MMJUA") to offer access to coverage for certain medical professionals and authorized the MMJUA to assess other medical malpractice carriers for certain losses. 14



During the 1980s, the medical malpractice insurance industry developed new types of policies to stabilize losses and premiums. Policies written before the 1980s were "occurrence-based" policies (covering all claims filed for an incident that occurred during a coverage year); many insurers switched to "claims-made" policies (covering only claims filed during a coverage year.) 15 Since losses under claims-made policies are more predictable, the new products enabled companies to stabilize their rating practices. 16



In 1994, Massachusetts passed legislation to transform the MMJUA into the Medical Professional Mutual Insurance Company ("ProMutual") with a board composed mainly of practicing or retired healthcare providers. 17 of practicing or retired healthcare providers.of practicing or retired healthcare providers.



Licensed Insurance Companies

Medical malpractice insurance companies must be licensed by the Division of Insurance with a designation for "medical malpractice" and are required to participate in the state's guaranty fund for property and casualty writers that provides some protection to policyholders in the event of an insurer's insolvency. In 2008, licensed medical malpractice insurance companies wrote $168.8 million in direct written premium; this is about 1.6% of the premium written for all property and casualty coverage. (Figure 1)

Figure 1



The Division of Insurance maintains a list of medical malpractice insurance companies on its website 18 identifying the "take all comers" classes of health care professionals written by the company. The list of licensed insurance companies writing medical malpractice coverage in 2008 is in A-1 on page 21 .




Figure 2



As noted in figure 2, the ProMutual Insurance Group - composed of Medical Professional Mutual Insurance Company and ProSelect Insurance Company - had the predominant share of the 2008 insurance market collecting approximately 81.4% of total premium. This is a slight decrease from its 82.7% market share in 2007.



Surplus Lines Carriers

Separate from the licensed insurance companies, health care professionals may also turn to surplus lines carriers for medical malpractice coverage. Surplus lines carriers are not licensed in Massachusetts but are licensed as an insurer in another jurisdiction and can issue coverage through specially licensed brokers to those who cannot obtain coverage from insurers licensed to do business in Massachusetts. Surplus lines carriers are not subject to Massachusetts insurance law - such as the "take all comers" requirements - and do not participate in state's guaranty fund. The Division of Insurance maintains a list of surplus lines carriers on its website. 19 The list of surplus lines carriers writing medical malpractice coverage in 2008 is in Appendix A-2 on page 22.



Figure 3

The largest surplus lines medical malpractice carrier in 2008 was the American International Group (including Lexington Insurance Company) accounting for 49.6% of the 2008 medical malpractice surplus lines market. In 2007, American International Group accounted for 28.3% of the market for surplus lines insurers. (Figure 3)



Risk Retention Groups

Separate from both insurance companies and surplus lines carriers, medical malpractice coverage may also be offered through Risk Retention Groups ("RRG") which under federal law 20 may offer liability coverage in any state provided the RRG is licensed as an insurance company in at least one state. RRGs are specifically exempted by federal law from participation in state guaranty funds and are not subject to the "take all comers" requirements that apply to licensed insurance companies.



Under federal law,

1. An RRG can be formed and owned only by members who are engaged in a similar business or activity and with similar liability risk exposure; and.
2. An RRG cannot exclude eligible members solely to reduce the RRG's risk of loss.









Figure 4


The Controlled Risk Insurance Company of Vermont RRG - also known as CRICO - has the predominant share of the RRG medical malpractice market collecting 88% of premium in 2008 and 87% in 2007. CRICO was created in 1979 to provide professional liability coverage to the physicians and employees of Harvard-affiliated medical institutions. 21 According to CRICO's business plan, physician applicants must meet CRICO underwriting criteria and are assigned to one of 80 underwriting specialties based on level of risk exposure.





The three next largest RRGs collectively account for about 10% of the market, and some of them write coverage for specialty providers. The list of RRGs that were writing medical malpractice coverage in 2008 is in Appendix A-3 on page 23.

Shares of the Market

During 2008, the different carriers together wrote $311.4 million of medical malpractice premium with 54.2% written by insurance companies, 36.5% written by RRGs and 9.3% written by surplus lines carriers. In 2007 the different carriers together wrote $301.4 million of medical malpractice premium with 57.5% written by insurance companies, 35.6% written by RRGs and 6.9% written by surplus lines carriers. (Figure 5)



Figure 5

In 2002, 64.5% was written by insurance companies, 23.8% was written by RRGs and 11.7% was written by surplus lines carriers. (Figure 6)



Figure 6

Financial Results for Insurance Carriers

Premiums

The $309.1 million earned in 2008 by insurance companies, surplus lines carriers and RRGs was 3.4% more than the $298.8 million earned in 2005 and 35.9% more than the $227.5 million earned in 2002. (Figure 7)



On an industry basis, licensed insurance companies earned $168.42 million in premiums in 2008 - 5.5% lower than the $178.1 million earned in 2005 and 10.0% more than the $153.0 million earned in 2002. RRGs earned $113.7 million in 2008 - 34.1% higher than the $84.8 million earned in 2005 and 106.7% more than the $55.0 million earned in 2002. Surplus lines carriers earned $27.0 million - 24.6% less than the $35.9 earned in 2005 and 39.2% more than the $19.4 million earned in 2002. (Figure 7)





Figure 7

Costs

When setting premiums, companies need to account for projected medical malpractice claims, as well as loss adjustment expenses (designed to settle or defend claims), general administrative expenses, producer commissions, and reinsurance expenses. Claims dollars are important drivers of overall costs, but examining claims dollars on financial reports may not present a true picture of losses to compare with company premiums. In Massachusetts medical malpractice claims are resolved an average of 6 years 22 following

the malpractice incident. Reported losses may be associated with premiums that were collected 6 years ago.



Figure 8



Massachusetts licensed insurance companies reported total claims losses of $165.6 million in 2002, greater than the $153.0 million collected in premiums.



On an industry basis, licensed insurance companies had incurred losses - those amounts that were reserved for claims that were open in the current year as well as amounts paid out for claims during a year - of $69.1 million 2008 - 34.7% less than the $105.8 million incurred in 2005 and 58.3% less than the $165.6 million incurred in 2002.



RRGs incurred $59.5 million in 2008 - 43.9% less than the $106.0 million incurred in 2005 and 1.7% less than the $60.5 million incurred in 2002. Surplus lines carriers incurred $4.3 million in claims in 2008 - 74.2% less than the $16.9 million incurred in 2005 and 70.4% less than the $14.7 million collected in 2002. (Figure 8)



Loss Ratios

Loss ratios (incurred losses divided by earned premium) are used to evaluate the underwriting success or failure of property and casualty insurance companies and assume that the lower the loss ratio, the higher the company's profit.

The calculated loss ratios for Massachusetts medical malpractice companies (licensed insurers, RRGs and surplus lines carriers) declined from 105.9% in 2002 to 43.0% in 2008. The loss ratios on a national basis for all medical malpractice companies declined from 92.6% in 2002 to 34.9% in 2008. (Figure 9)



Figure 9



When examining each of the types of medical malpractice carriers in Massachusetts, the loss ratios decline for each. The licensed insurance companies' loss ratios declined from 108.2% in 2002 to 41.1% in 2008. The RRGs' loss ratios declined during this period from 110.1% in 2002 to 52.3% in 2008. The surplus lines carriers' loss ratios declined from a 75.5% in 2002 to 16.1% in 2008. (Figure 10)



Figure 10



Combined Ratios and Operating Ratios

An adjusted combined ratio (the combination of company expenses and incurred claims divided by earned premium) can be a more effective measure of the overall experience of a property and casualty insurance company since it factors in other costs required to run an insurance company, including loss adjustment, acquisition and general expenses, as well as the costs of taxes, licensing fees, and mutual fund dividends.

Since companies do not report company-by-company expense experience, the following table - Figure 11 - derives general and other expenses based on aggregate reported financial information for licensed insurers - not including the RRGs and surplus lines carriers. The adjusted combined ratio with dividends calculation - column (L) - presents a more complete picture of company experience in the medical malpractice market. While the loss ratio for 2008 was 41.1%, the net operating ratio was 87.2%.

Figure 11



Figure 11 includes one more calculation to derive a net operating ratio that is more reflective of medical malpractice insurance experience. Since medical malpractice is considered a "long-tailed line" where payments may not be made for many years after a claim has been filed, the net operating ratio considers the net investment income on reserves held to pay future claims. As illustrated in column (N) of Figure 11 when factoring in the net investment income ration the net operating ratio for licensed medical malpractice insurers was 147.9% in 2002, 84.5% in 2005 and 87.2% in 2008.



The above analysis does not reflect the net cost of reinsurance because this information is not readily available within the aggregate financial statements for Massachusetts medical malpractice business. Based upon industry information, reinsurance is estimated to account for an additional 2-5% of a company's premiums. 23

Premiums for Medical Malpractice Coverage

Factors Affecting the Cost of Coverage

Insurance company actuaries develop premiums to pay future expected claims losses and expenses, while also meeting company profit expectations and staying competitive with other insurance companies.



Claims
Actuaries examine prior losses and loss adjustment expenses to estimate trends in both frequency (the number of lawsuits filed) and severity (average claims payments per claim). Projecting future losses for medical malpractice is complicated because in such a "long-tailed line," claims may not be settled for 5-7 years after an initial claim is filed. 24



Defense Costs
Medical malpractice claims may involve substantial legal costs to investigate and defend health care professionals from alleged negligence. Actuaries factor in projected cost of legal work leading up to and including the trying of a case.



Acquisition Costs, General Administrative Expenses and Taxes
In the course of doing business, companies pay commissions to producers ( i.e., agents or brokers) to acquire business, general administrative expense to operate their business and premium taxes and assessments.



Dividends
Insurance companies that are owned by investors (stock companies) or by policyholders (mutual companies) share their surpluses with their owners through dividend distributions. The level of dividends depends on ownership's expectations of surpluses.



Reinsurance
Medical malpractice insurance carriers protect themselves from the financial risk of severe medical malpractice claims by purchasing reinsurance. This will vary based upon the availability of reinsurance and the risk of the reinsured coverage.



Investment Returns
Medical malpractice insurers depend on investment earnings on claims reserves to pay future claims. When investment returns are expected to decrease, the company needs to collect more in premium to attain an adequate level to pay future claims.



Risk Classifications
Carriers develop different risk classes and rates for medical specialties based on prior and expected loss experience. The classifications of risk must be reasonable and developed based on sound actuarial principles.



Massachusetts Premiums Change in the 2000s

Based upon the rate history of Medical Professional Mutual Insurance Company (part of the ProMutual Insurance Group), rates rose quickly in the early 2000s. Between 2000 and 2004, ProMutual's physician and surgeon average rates increased each year by at least 9.0% over the previous year's rates. After 2004, ProMutual's rates were much more stable. (Figure 12)





Figure 12



According to the National Practitioner Data Bank, the annual number of medical malpractice claims that were paid for Massachusetts physicians increased from 227 in 2002 to 273 in 2007; this is an increase of 46 claims above what was reported for 2002. 25



Regarding the size of paid claims (the severity of claims), Massachusetts continues to have high average payouts compared to that of other states. In 2006, the average Massachusetts medical malpractice payment made on behalf of practitioners was $465,236; the median payment was $300,000. When examining claim payments made over the sixteen years between September 1, 1990 and December 31, 2006, Massachusetts' median payment was the second highest nationally, only behind that of the state of Illinois. (Figure 13)



Figure 13 26



Premiums Compared to Those of Other States

ProMutual submitted materials to supplement testimony it presented at the October 3, 2008 hearing presenting the rates the company charges by physician specialty in six Northeast states. 27 The rates that the company charges in Massachusetts and Connecticut are among the highest of the six states, but not for every specialty. (Figure 14)



Figure 14



Among the specialty groups, Massachusetts' average rates for the obstetrician rating classes (80153 and 80168) are $104,481; this is similar to five other states, but over $40,000 more than charged in New Hampshire. For the related "gynecology" only rating class (80167), Massachusetts' average rates are $43,643; this is relatively similar to that of the other states.

Conclusion

While medical malpractice premiums have been relatively stable over the past four years, many health care professionals consider them to be too high and too prone to increase. While medical malpractice premiums can change for many reasons, Massachusetts' relative high cost compared to that of other states appears to be tied to the cost of higher medical malpractice claims.

The Division's 2007 report analyzed different reasons that medical malpractice costs may be high and proposed ideas to reform the tort or medical systems; they are not addressed in this report. Since projected trends in malpractice claims have a great impact on cost, the 2007 report looked at ways to address the frequency (number) and severity (size) of medical malpractice claims by looking at the following types of changes:

 Improving communications between patients and health care professionals to improve trust, reduce unreasonable expectations and avoid lawsuits;
 Shifting malpractice risk from individuals to enterprises - e.g., hospitals and health plans - because systems problems are responsible for many medical errors;
 Changing the tort system - e.g., limiting medical malpractice awards and establishing new procedural tort standards - to reduce unnecessary lawsuits and lower the cost of those that remain; and
 Preventing medical errors - e.g., disclosing all medical errors and establishing medical standards of care - to reduce patient injuries.


The 2007 report also identified that certain specialties ( e.g., obstetrics and gynecology) have higher claims and higher premiums than other specialties and identified that there may be ways to temper these specialties' premiums by looking at the following changes:

 Increasing other providers' premiums to subsidize high-risk providers' premiums;
 Assessing other insurers to subsidize high-cost providers' premiums; and
 Establishing limited no-fault systems to review claims for high-cost providers.


Although the Division did not conduct the same analysis for this the 2008 report, it does believe that the analysis remains valid for the existing medical malpractice market.

Appendix A-1: Medical Malpractice Insurance Companies

The following list identifies the admitted insurance companies that reported Massachusetts premium revenue for medical malpractice coverage during 2008: 28





Appendix A-2: Medical Malpractice Surplus Lines Carriers

The following list identifies the surplus lines carriers that reported Massachusetts premium revenue for medical malpractice coverage during 2008: 29







Appendix A-3: Medical Malpractice Risk Retention Groups

In Massachusetts, the following Risk Retention Groups (RRGs) reported Massachusetts premium revenue for medical malpractice coverage during 2008: 30













__________________________________________________________


We Can Help!



The Division of Insurance exists to serve the citizens of the Commonwealth of Massachusetts. The Division responds to inquiries and assists consumers in resolving complaints against insurers, producers and other licensees. In addition to providing consumers with general insurance information in the form of brochures, guides and web content, the Division also advises consumers on their options and rights under their policies, state laws and insurance regulations.

If you have a complaint against an insurance company, we recommend that you contact the insurance company first and try to settle the matter. Most insurance companies have policyholder service offices to handle questions. If you are still not satisfied, you may contact the Division's Consumer Service Section staff to help with the problem. Although we cannot represent a consumer legally against an insurance company or adjuster, we can make an appropriate investigation into potential violation of insurance laws or regulations based on a complaint.

If you wish to file a formal complaint against an insurance company or producer, you can obtain a blank consumer complaint form by calling the Division's Consumer Service Section Hotline at 617-521-7794. Alternatively, you can download a blank complaint form from the Division's web site at www.mass.gov/doi. Contact the Division with any question you may have concerning an insurance company or product.







__________________________________________________________

1 243 CMR 2.07(16).
2 M.G.L. c .175, §193U.
3 The best available information for medical and osteopathic doctors is for year-end 2007.
4 Numbers of licensed health care professionals as reported to the Division of Insurance by the following agencies: Board of Registration in Medicine; Department of Professional Licensure and Division of Health Care Quality in the Department of Public Health; and the Department of Mental Health. The reported statistics reflect the number of licensed health care professionals; the number actively practicing in a profession may be smaller than the number reported.
5 Numbers of licensed facilities and programs as reported to the Division of Insurance by the Department of Professional Licensure and Division of Health Care Quality in the Department of Public Health. While the reported statistics reflect the number licensed, the number actively operating may be lower.
6 The Board of Registration in Medicine coordinates the licensing of doctors (MDs and DOs) and acupuncturists.
7 The Division of Health Professions Licensure within the Department of Public Health coordinates the licensure for Dentists; Genetic Counselors; Nursing; Nursing Home Administrators; Perfusionists; Pharmacy; Physician Assistants; and Respiratory Care.
8 Boards of Registration in the Office of Consumer Affairs and Business Regulation coordinate the registration of Allied Health Care professionals (i.e., Athletic Trainers, Occupational Therapists, Occupational Therapist Assistants, Physical Therapists, Physical Therapist Assistants, Physical Therapy Facilities); Allied Mental Health Care professionals (i.e., Mental Health Counselors, Marriage and Family Therapists, Rehabilitation Counselors, Educational Psychologists); Certified Health Officers; Chiropractors and Chiropractic Facilities; Dietitians and Nutritionists; Dispensing Opticians; Hearing Instrument (Hearing Aid) Specialists; Massage Therapist/Practitioners, Massage Therapy Salons, and Massage Therapy Schools; Optometrists; Psychologists; Licensed Independent Clinical Social Workers, Licensed Certified Social Workers, Licensed Social Workers, and Licensed Social Worker Associates; and Audiologists, Audiologist Assistants, Speech Pathologists and Speech Pathologist Assistants.
9 The Department of Mental Health licenses private mental health hospitals and clinics.
10 The Department of Public Health licenses hospitals, nursing/rest homes, long-term care facilities, clinics, home health care agencies, hospices, ambulances, nursing service agencies and mammography facilities.
11 M.G.L. c. 175, §193U. The commissioner of insurance may also designate other categories as eligible when they are also eligible to be ceded to the medical malpractice reinsurance plan. Chapter 444 of the Acts of 2008 added physical therapists and physical therapist assistants to M.G.L. c. 175, §193U.
12 243 CMR 2.07(16).
13 233 CMR 4.04.
14 Section 6 of Chapter 362 of the Acts of 1975
15 "Medical Malpractice: Implication of Rising Premiums on Access to Health Care," General Accounting Office, August 2003, p. 10.
16 In Massachusetts, only one company - the MMJUA's successor - is required to offer "occurrence-based" and "claims-made" coverage, while other companies have switched to "claims-made" policies.
17 Chapter 330 of the Acts of 1994 created M.G.L. c. 175, § 193U. This law was further amended - Chapter 372 of the Acts of 1998 - to make clear that the coverage offered to each provider must be available at least at a certain standard level as defined in the rules of operation of the medical malpractice reinsurance plan.
18 The Division's website indicates the companies that write to each of the designated classes of providers http://www.mass.gov/?pageID=ocasubtopic&amp;L=5&amp;L0=Home&amp;L1=Business&amp;L2=Insurance&amp;L3=Commercial Buyers&amp;L4=Medical Malpractice Insurance&amp;sid=Eoca
19 The list is located at http://www.mass.gov/Eoca/docs/doi/Companies/SurplusLines.pdf pdf format of SurplusLines.pdf
20 Liability Risk Retention Act of 1986, 15 U.S.C. § 3901, with related M.G.L. c. 176L.
21 Founding members of the Risk Management Foundation eligible for CRICO coverage include:



Beth Israel Hospital Association;Judge Baker's Children Center, Inc.;
Brigham and Women's Hospital;Massachusetts Eye and Ear Infirmary;
Cambridge Health Alliance ;Massachusetts General Hospital;
CareGroup, Inc.;Massachusetts Institute of Technology;
Children's Hospital Corporation;McLean Hospital;
Dana-Farber Cancer Institute, Inc.;Mount Auburn Hospital;
Faulkner Hospital;New England Baptist Hospital;
Harvard Pilgrim Health Care, Inc.;New England Deaconess Hospital Corporation;
Harvard School of Dentistry;Newton-Wellesley Hospital;
Harvard School of Public Health;North Shore Medical Center;
Harvard University Medical School;Partners HealthCare System, Inc.;
Harvard University Health Services;Presidents/Fellows of Harvard University; and
Harvard Vanguard Medical Associates, Inc.;Spaulding Rehabilitation Hospital.
Joslin Diabetes Center, Inc.;

22 National Practitioner Data Bank 2006 Annual Report, Table 13, Mean and Median Medical Malpractice Payment and Mean and Median Delay Between Incident and Payment by State, 2006 and Cumulative Through 2006 - Physicians*, p.74.
23 Best's Aggregates & Averages, Property/Casualty, United States & Canada, 2008 Edition, comparing earned premium and losses plus defense expenses net of reinsurance on p.361 and direct earned premium and losses plus defense expenses on p. 363.
24 National Practitioner Data Bank 2006 Annual Report, Table 13, Mean and Median Medical Malpractice Payment and Mean and Median Delay Between Incident and Payment by State, 2006 and Cumulative Through 2006 - Physicians, p.74.
25 The National Practitioner Data Bank (NPDB) of the federal Health and Human Services agency maintains statistics of medical malpractice claim payments made by state. The noted statistics were taken from Table 11 from the NPDB 2006 Annual Report, p.72.
26 Figure 13 from the NPDB 2006 Annual Report
27 Rates presented by ProMutual that are being charged across six Northeast states for the same level of claims-made coverage. The presented chart is for the 25 highest rated specialty classes in Massachusetts.
28 According to materials reported to the National Association of Insurance Commissioners



Company Name Domicile
ACE American Insurance CompanyPA
American Alternative Insurance CorporationDE
American Casualty Company of Reading, PennsylvaniaPA
American Home Assurance CompanyNY
American Insurance CompanyOH
Chicago Insurance CompanyIL
Church Mutual Insurance CompanyWI
Cincinnati Insurance CompanyOH
Connecticut Medical Insurance CompanyCT
Continental Casualty CompanyIL
Darwin National Insurance CompanyDE
(The) Doctors' CompanyCA
Fortress Insurance CompanyIL

General Insurance Company of America

WA
Granite State Insurance CompanyPA
Medical Professional Mutual Insurance CompanyMA
Medical Protective CompanyIN
National Casualty CompanyWI
National Union Fire Insurance Company of Pittsburgh, PAPA
NCMIC Insurance CompanyIA
OneBeacon Insurance CompanyPA
Pharmacists Mutual Insurance CompanyIA
Platte River Insurance CompanyNE
Podiatry Insurance Company of America (Mutual Company)IL
Professional Solutions Insurance CompanyIA
ProSelect Insurance CompanyMA
State Farm Fire and Casualty CompanyIL

29 According to materials reported to the National Association of Insurance Commissioners.

Admiral Insurance CompanyDE
Allied World Assurance Company (U.S.), Inc.DE
American Intl. Specialty Lines Insurance CompanyIL
Arch Specialty Insurance CompanyNE
Aspen Specialty Insurance CompanyND
Chubb Custom Insurance CompanyDE
Columbia Casualty CompanyIL
Darwin Select Insurance CompanyAR
Essex Insurance CompanyDE
Evanston Insurance CompanyIL
General Star Insurance CompanyCT
Homeland Insurance Company of New YorkNY
Houston Casualty CompanyTX
Illinois Union Insurance CompanyIL
Interstate Fire and Casualty CompanyIL
Ironshore Specialty Insurance CompanyAZ
James River Insurance CompanyOH
Landmark American Insurance CompanyOK
Lexington Insurance CompanyDE
Liberty Surplus Insurance CorporationNH
ProNational Insurance CompanyMI
Steadfast Insurance CompanyDE
United Specialty Insurance CompanyDE
Western World Insurance Company, Inc.NH








30 According to materials reported to the National Association of Insurance Commissioners.

Company Name Domicile
Allied Professionals Insurance Co. (RRG)AZ
American Association of Orthodontists Insurance Co. (RRG)VT
American Excess Insurance Exchange (RRG)VT
Controlled Risk Insurance Co. of VT, Inc. (RRG) [aka, CRICO]VT
Eastern Dentists Insurance Co. (RRG)VT
Green Hills Insurance Co. (RRG)VT
Healthcare Industry Liability Reciprocal Co. (RRG)DC
OMS National Insurance Co. (RRG)IL
Ophthalmic Mutual Insurance Co. (RRG)VT
Preferred Physicians Medical RRG, Inc.MO