Physicians and Surgeons - Claims Free Discount

April 18, 2011 - NEW MLMIC PREMIUM DISCOUNT

I am pleased to announce that the State Insurance Department has approved our new claims free discount program for physicians, effective July 1, 2011. MLMIC filed this program because its actuaries have indicated that past favorable claim experience is strongly indicative of what can be expected in the future. Therefore, it stands to reason that claims free policyholders should receive a reduction in premium. This program will provide qualified physicians a 7.5% discount to the premium rate established by the Superintendent of Insurance for 2011 - 2012. To qualify for the claims free discount, a physician must:
  1. have been in practice for a minimum of five years
    AND
  2. have no open claims (or suits), and no closed claims (or suits) with any paid indemnity or expense within the past 5 years - regardless of the accident date or report date.
Any physician who is claims free for the 5-year period immediately preceding June 15, 2011 will qualify for the discount, and we expect about half of our current physician policyholders will qualify. The discount will also apply to new applicants who provide claims free loss histories and meet the qualifications above.

To help you better understand the program, we urge you to carefully read the attached list of questions and answers we anticipate receiving about this new discount. If you have any other questions, please click here to contact MLMIC electronically.

Thank you for insuring with MLMIC. We remain committed to providing the highest quality professional liability insurance at the lowest possible cost to our policyholders in New York.

Sincerely,
Robert A. Menotti, MD
President
Medical Liability Mutual Insurance Company





Answers to Common Questions About MLMIC’s Claims Free Discount:

  1. Do I have to apply to receive the discount?
    • a. If you are a current physician policyholder with sufficient experience on file with us (at least a 5-year history) and have completed your specialty renewal application within the past 2 years, updating any previous carrier’s loss experience, the claims free discount will automatically be applied to your renewal premium on July 1, 2011 if you qualify.
    • b. If you are a current physician policyholder without sufficient experience on file with us (less than a 5-year history), but have completed a specialty renewal application update within the past 2 years and have provided loss histories that demonstrate you qualify, we can apply the premium discount.
    • c. If you are a new applicant seeking the claims free discount, you must fill out an application and provide loss histories that demonstrate your qualification.
  2. If a physician has a closed claim with no indemnity payment within the last 5 years, would the physician qualify for the claims free discount?
    Unfortunately, if the claim had any paid claim expense, the physician would not qualify for the discount. Regardless of a claim’s merit or the amount paid in a judgment or settlement, a claim has an additional financial impact on MLMIC in the form of claim expense (mainly defense attorney fees). Claim expense is still paid by the Company, even if a claim is closed without an indemnity payment.


  3. Does the discount apply if a policyholder is receiving another discount?
    The claims free discount will also apply to policyholders participating in the Voluntary Attending Physician (VAP) Program or who receive a part-time and/or risk management discount. The discount will not apply if the policyholder is receiving any other discount, e.g., the new doctor discount.


  4. Does reporting an incident or event that could reasonably lead to a claim in the future disqualify a physician from the claims free discount?
    No, reporting an incident is encouraged and would be considered an event (not a claim) by MLMIC. Therefore, it would not disqualify a physician from the discount.


  5. If a physician has purchased optional Defense Costs Coverage (“defense only coverage”) from MLMIC and reports a defense only claim, would this disqualify the physician from the discount?
    No, Defense Cost Coverage is not professional liability coverage but a separate optional coverage purchased by the physician. Therefore, reporting a “defense only” claim would not impact the claims free discount.


  6. Does the discount apply to entity policies?
    Yes, if the physician members qualify for the discount, the discount will be reflected in the calculation of the entity premium. However, an entity does not receive a claims free discount based upon its own experience.


  7. Does the discount apply to policies issued to physician extenders who are supervised and/or employed by a claims free physician?
    No, extenders are not subject to the discount program.


  8. What happens if a claim is subsequently reported that disqualifies the physician for a claims free discount?
    The claims free discount will be removed the next policy year beginning on the following July 1.