Med Mal Coverage Sought In Captives
Burlington, Vt
U.S. captive insurance domiciles, from large to small, are noticing a burgeoning interest in the formation of captive insurance entities for medical liability coverage, according to state insurance regulators.
With insurers like The St. Paul Companies exiting medical malpractice coverage in several states, doctors, hospitals, nursing homes and other medical groups have few options for liability coverage.
"Theyre coming out of the woodwork," Clayton Ingram, manager of business development, alternative risk transfer services, for the South Carolina Insurance Department, told the National Underwriter at the Vermont Captive Association annual conference recently.
Mr. Ingram said he has had inquiries from hospital groups, medical doctor groups, medical practices, medical staffing groups and agent groups with clients in need of the coverage.
"Everybody lost their insurance overnight. Theyre looking at six months down the road when theyre not going to be able to practice," he said.
South Carolina so far this year has licensed 18 captives and has another six "ready to go," he said. Those six consist of medical malpractice groups, nursing home groups, real estate groups and sponsored captive groups.
There are also several risk retention groups. "Theyre the hot ticket," Mr. Ingram added. "Nobody can find fronting."
Tim Morris, captive insurance examiner for the Office of the Auditor, state of Montana, said the state has four potential captives in the approval process. One of those, he said, is a hospital association, though there have been other inquiries.
"Smaller hospitals have a harder time getting coverage because they dont have the resources," he said. Mr. Morris explained that hospitals serving rural populations of 1,000 to 8,000 may only consist of one or two beds.
Mr. Ingram expressed concern that professional liability coverage issues that now affect medical groups could eventually reach other groups such as attorneys.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 26, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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