PriMed Consulting - Medical Malpractice Insurance NY, NJ, WV

More changes to the NY Malpractice standard market

13, Mar Mar, 2019

Hospitals Insurance Company (HIC) and FOJP Service Corporation (FOJP), together with Mount Sinai Health System, Montefiore Health System & Maimonides Medical Center have entered into an agreement to sell HIC and FOJP to The Doctors Company (TDC) for $650M. The deal is proposed to close in 2019, if approved by the NYS Dept of Financial Services. Both carriers are admitted in the NY market, but this has the potential of improving the status of both companies.

One of the outstanding questions is how the filed rates of both HIC and TDC will be impacted. Currently, HIC has more competitive rates, but are restricted to insuring providers who work at one of these hospitals. The rates at TDC are higher, but they do have the advantage of offering their Tribute Plan, established in 2007 and exclusive to TDC. It is a retirement plan that is very attractive to physicians who can recoup some of their malpractice payments to the carrier over time. TDC sets aside 10% of the premiums for eligible members, which are put into a “subscriber savings” plan for every year that they are with TDC and can be claimed once the provider retires from practice, also building carrier loyalty.

The Doctors Company is relatively new in the NY marketplace, but has been offering malpractice solutions to providers in the other 49 states for many years. They were founded in April of 1976 & headquartered in Napa, California. They are 100% member owned, making them the largest physician-owned insurer in the nation. Since 2008, they have acquired several insurance companies, adding to their financial strength and presence in the malpractice arena. They are rated A by AM Best and Fitch Ratings.

Hospitals Insurance Company was established 40 years ago & writes $180M in premium volume. Their target market is physicians that provide care in at least one of the hospital systems mentioned above. They recently expanded their market to include physician extenders in 2018. They are rated A by AM Best.

FOJP provides insurance & risk management advisory services to academic hospitals, long term care facilities, and social service agencies in the metropolitan NY area. They were established in 1977 to help identify & mitigate risk factors to control losses.

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