HB 1837 -- Malpractice Insurance

Sponsor:  Yates

This bill changes the laws regarding malpractice insurance.  The
bill:

(1)  Allows licensed long-term care facilities, limited liability
companies, corporations, limited liability partnerships,
partnerships, and other entities formed for the practice of law
or medicine to become members of an association providing
malpractice insurance to its members;

(2)  Makes associations writing malpractice insurance subject to
reporting, notification, and rating requirements;

(3)  Requires the Director of the Department of Insurance to
submit an annual report to the General Assembly regarding the
actual and base rates charged for malpractice insurance and any
changes from the previous year's rates;

(4)  Requires insurers writing medical malpractice insurance to
Missouri health care providers to submit an annual report by
March 31 of each year containing policy information including the
following:

(a)  Number of policies written, canceled, renewed, and not
renewed;

(b)  Total premiums collected and losses paid; and

(c)  Claims pending, paid, and closed;

(5)  Requires insurers to report to the director and the
appropriate licensing board any malpractice claims paid;

(6)  Specifies that any malpractice insurer failing to report
required claims information in a timely manner will be subject to
penalties applicable to insurance companies under Section
374.215, RSMo;

(7)  Removes the 30-day period the director has to approve a
malpractice insurance policy to be used by an association;

(8)  Requires the surcharge paid to the association by
policyholders in the first year to be paid in the form of cash or
cash equivalent and not in the form of a promissory note;

(9)  Requires medical malpractice insurers to obtain rate
approval from the director and specifies the review procedure for
approving or rejecting rates.  Rates cannot be excessive,
inadequate, or unfairly discriminatory.  Rates will be based upon
Missouri loss experience only, not experience from other states
unless the failure to do so will jeopardize the financial
stability of the insurer;

(10)  Allows insurers to charge an additional premium surcharge
or discount based on the health care provider's loss experience,
training, and other factors.  Applications will be deemed
approved if not rejected within 60 days;

(11)  Specifies that no insurer can increase malpractice
insurance rates by more than 25% or refuse to renew a policy
without at least 60 days' written notification.  Insurers cannot
cease issuing policies in this state without 180 days' written
notice to the insured and the director.  If an insurer fails to
give notice, the policyholder has the right to continue coverage
under the policy;

(12)  Requires, by June 30, 2007, the department to establish
risk-reporting categories by physician specialty for medical
malpractice insurance base rates.  Annually, insurers will report
actual rates charged including assessments for each
risk-reporting category.  The department will annually publish a
report containing market rates reflecting the median actual rates
charged for each risk-reporting category;

(13)  Defines "base rate" and "schedule rating or individual risk
rating credits or debits";

(14)  Allows the department to establish reporting standards for
premiums received and policies written by category.  The
department will publish this information in a manner appropriate
for assisting insurers in developing future base rates;

(15)  Considers rate increases or decreases of more than 25% to
be unreasonable;

(16)  Establishes penalty provisions for violations of Sections
383.100 - 383.125 and Sections 383.300 - 383.314;

(17)  Prohibits insurers from using claims experience
incorporating other states' claims experience in setting higher
rates in Missouri;

(18)  Requires, by January 1, 2011, all insurers writing medical
malpractice insurance to offer policies which will apply to
injuries resulting from acts or omissions occurring during the
policy period, regardless of the timing of the filing of a claim;
and

(19)  Allows insurers who may be obligated to provide defense in
a civil action to request the court to determine the extent of
the insurer's liability.

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:44 am