HCS HB 1837 -- MALPRACTICE INSURANCE (Yates)

COMMITTEE OF ORIGIN:  Insurance Policy

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

(1)  Allows 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
June 1 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)  Prohibits medical malpractice insurers from charging rates
that are excessive, inadequate, or unfairly discriminatory.
Rates will be based upon Missouri loss experience if available,
not experience from other states unless the failure to do so will
jeopardize the financial stability of the insurer.  It does not
apply to occurrence-based policies written under Section 383.335;

(10)  Allows insurers to charge an additional premium surcharge
or discount based on the health care provider's loss experience,
training, and other factors;

(11)  Specifies that no insurer can increase malpractice
insurance rates by more than 15% or refuse to renew a policy
without at least 60 days' written notification unless requested
by the insured or due to changes in the insured's practice or
risk characteristics.  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 the department, by June 30, 2007, to establish
risk-reporting categories by physician specialty for medical
malpractice insurance base rates.  Insurers will annually report
actual rates charged including assessments for each
risk-reporting category.  The department will annually publish a
report containing market rates reflecting the mean 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)  Establishes penalty provisions for violations of Sections
383.100 - 383.125 and Sections 383.302 - 383.312; and

(16)  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.

FISCAL NOTE:  No impact on General Revenue Fund in FY 2007,
FY 2008, and FY 2009.  Estimated Cost on Other State Funds of
$123,563 in FY 2007, $120,524 in FY 2008, and $123,555 in
FY 2009.

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