AM Best Affirms Superior FSR, Credit Ratings of MLMIC Insurance Company
November 30, 2021
AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of MLMIC Insurance Company (MLMIC) (New York, NY). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect MLMIC’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also benefit from the financial support provided by MLMIC’s direct parent company, National Indemnity Company, which is ultimately owned by Berkshire Hathaway Inc.
MLMIC has a long track record of favorable reserve development and adequate underwriting returns. In recent years, net operating results have been somewhat skewed by a 100% loss portfolio transfer (LPT) and an 85% quota share agreement with National Indemnity Company, which were executed in 2018. As a result, favorable reserve development related to accident years covered by the LPT (for all business written prior to the acquisition by National Indemnity Company in 2018) no longer benefits MLMIC’s underwriting results. The pace of favorable reserve development was likely further slowed by the impact of the COVID-19 pandemic on the New York court system, which reduced the speed with which claims were closed and delayed the recognition of possible favorable reserve development on more recent accident years that are not covered under the LPT. As such, the company’s net underwriting results in the most recent years have not yet benefited from the same degree of reserve releases seen in previous years. The direct underwriting results remain in line with historical trends, however, and further support the current operating performance assessment.
MLMIC’s insurance portfolio is concentrated in the medical malpractice line of business. The company underwrites risks only within New York state, which is one of the nation’s most challenging markets for medical professional liability. However, management has been able to operate successfully through underwriting cycles while maintaining MLMIC’s leading market position within New York. In addition, risk management capabilities have proven appropriate for the risk profile of the company.
Beazley hires MPL expert Joseph Washington as U.S. Healthcare Underwriter
November 16, 2021
As specialist insurer Beazley moves to expand its Hospital Professional Liability portfolio in the United States, Joseph Washington has been appointed its underwriter for U.S. Healthcare, beginning his role on Monday, November 15, 2021.
With more than 25 years of medical professional liability experience, gained at Berkshire Hathaway and Zurich, Joseph has specialized in providing this type of coverage for hospitals throughout his career and brings with him a wealth of expert knowledge and experience in the field.
“With Beazley's reputation for working with organizations that manage their own risk effectively, they're a well-respected player in this market,” Washington said. “Naturally, I am very much looking forward to working with them to open distribution for Hospital Professional Liability here in the states.”
“This is an exciting hire for us, as we continue to target double-digit growth into 2022,” said Matt McCullaugh, focus group lead for US Hospitals at Beazley. “While the London distribution remains core to Beazley’s US Hospitals offering, there is a real opportunity to access more middle market US hospital business, by opening up distribution locally. With his vast experience in this area, Joseph is the ideal candidate to help us achieve this.”
Washington will be based in Atlanta.
Illinois Jury Awards $14.75 Million in Medical Malpractice Lawsuit
November 15, 2021
A jury in Vermilion County, Illinois, reached a verdict of more than $14.75 million today in a medical malpractice action brought against Presence Hospitals, PRV, the former operator of the Presence United Samaritans Medical Center in Danville, Ill. The lawsuit was brought on behalf of L.B., a disabled person, through her guardian CIBC Bank USA.
The lawsuit alleged that Presence, individually and through its agents, was negligent in the medical care and treatment provided to L.B. while she was an inpatient at Presence United Samaritans Medical Center on April 22, 2014. L.B. was pregnant with twins and underwent a cesarean section procedure by the obstetrician on call, Mohannad Rajjoub, MD. Following the delivery of the twins, Rajjoub attempted to remove L.B.'s placenta when she had a condition known as placenta accreta, in which the placenta attaches deeply into the uterine wall. As a result, plaintiff presented evidence that the placenta was torn, and L.B. suffered massive hemorrhaging resulting in hypoxic brain injury and seizure like activity.
The plaintiff further alleged that negligent conduct of the anesthesiologist, Damon Green, MD, contributed to L.B.'s injuries. Plaintiff presented evidence that following the massive hemorrhage, L.B. did not receive proper resuscitative care which contributed to the hypoxia. This evidence included that no blood was available in the operating room for transfusion and that more than 30 minutes elapsed before the first transfusion was begun.
Plaintiff's medical expert in rehabilitation testified that L.B. sustained a severe and diffuse brain injury with global consequences, and that her intellectual age is 3 years, 3 months with an estimated IQ less than 34. L.B. is virtually totally dependent on all aspects of daily life and will require 24-hour, life-long care.
Presence Hospitals denied that Rajjoub and Green were its agents. It further maintained at trial that L.B. was not stable for transfer to a different hospital and required an emergency c-section during which the doctors and the hospital each acted within the standard of care.
The jury awarded the plaintiff a total of $14,756,744.03 consisting of $3 million each for loss of a normal life and pain and suffering, $7.4 million for future medical and caretaking expenses and $1,356,744.03 for past medical expenses.
Cooperative of American Physicians Announces Retirement of Deidri Hoppe from CAP Physicians Insurance Agency, Names Michael Dyse Her Successor
November 15, 2021
The Cooperative of American Physicians (CAP) today announced the upcoming retirement of CAP Physicians Insurance Agency president and chief executive officer Deidri (Dee) Hoppe. After 10 years of service to CAP members, Hoppe will retire at the end of December 2021. She will be succeeded by Michael Dyse, who is currently CAP Agency vice president.
Hoppe joined CAP in 2011 and previously held the position of vice president, where she oversaw the property casualty insurance division. She was promoted to president and CEO of CAP Agency in 2016.
“Dee has been a strong and effective leader, instrumental in the growth of all lines of the CAP Agency,” said Sarah Scher, CAP chief executive officer. “Her use of technology to build the agency and the fact that she delivered almost $3 million in dividends to the CAP enterprise from the agency are particularly noteworthy. We will miss her and wish her much happiness in her retirement.”
Michael Dyse will take the reins as CAP Agency president, effective Jan. 1, 2022. He has worked at CAP since 2014. According to CAP, before moving to the Agency as vice president earlier this year, Dyse served as assistant vice president, CAP Membership Services, where he managed the largest groups and accounts across the CAP enterprise.
“With Michael’s extensive background, strong work ethic and excellent interpersonal skills, he is sure to build upon the success of an already thriving agency,” Scher said. “Michael has been working with the agency as he transitions into his new position, and we are excited about the innovative thinking he has already demonstrated.”
Michael Roque Named Positive Physicians Insurance Co. President
November 15, 2021
Positive Physicians Insurance Co. announced today that Michael G. Roque has joined the medical professional liability insurer as its new president.
Bringing more than 25 years’ experience in medical professional liability on both the broker and carrier sides of the industry, Roque most recently served as chief operating officer at Integris Group. He specializes in strategic planning, operations management and market growth.
“We are very pleased to have Michael join our team,” Lewis Sharps MD, Positive Physicians chief executive officer. “His knowledge and experience within the MPL industry will be a tremendous asset for PPIC. We look forward to his leadership and insight as we continue to expand and change the landscape of the MPL industry.”
AM Best Revises Issuer Credit Rating Outlook to Stable for Members of Kansas Medical Mutual Group
November 8, 2021
AM Best has revised the outlook of the Long-Term Issuer Credit Ratings (Long-Term ICR) to stable from negative and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term ICRs of “bbb+” (Good) of Kansas Medical Mutual Insurance Company, and its subsidiary, KAMMCO Casualty Company, Inc. These companies are referred to collectively as Kansas Medical Mutual Group. The outlook of the FSR is stable. Both companies are domiciled in Topeka, KS.
The ratings reflect Kansas Medical Mutual Group’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
The revised Long-Term ICR outlook to stable reflects actions taken by the group to stabilize operating performance and capital levels in recent years. These actions have demonstrated the effectiveness of the group’s risk management capabilities through improvements in operational efficiencies, adaptation to recent tort reform events and executing its strategy to refocus on its core medical professional liability (MPL) business. AM Best considers the group’s ERM framework appropriate with a defined risk appetite and tolerances as well as stress test scenarios for critical risks that could impact the group.
The group’s balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), partially offset by declining level of policyholders’ surplus and other balance sheet metrics over the prior five-year period. During the earlier portion of the prior five-year period, the group reported significant weakening of earnings and reduced surplus due to higher-than-expected underwriting losses and diminished investment returns. These factors, along with several one-off charges, including the write-off of its KAMMCO Health Solutions subsidiary, which had generated significant operating losses and strained liquidity, culminated in a significant loss in 2019.
Performance improved in 2020 and through the first six months of 2021, with the group reporting modest organic surplus growth, due to the impacts of expense reductions, modest annual rate actions and reduced frequency.
The group’s limited business profile reflects its monoline concentration of risk in the MPL sector and heavy geographic concentration in Kansas. A 2019 judicial ruling resulted in the removal of noneconomic damage caps on personal injury cases in Kansas; however, uncertainty remains as to whether this applies to medical malpractice actions until further clarification from the Kansas Supreme Court. The group has taken proactive measures by modifying its reserving procedures for noneconomic damages, and reviewed all outstanding cases and increased reserves accordingly.
2021 Annual Rate Survey Correction
November 4, 2021
In its 2021 Annual Rate Survey issue (MLM, October 2021), Medical Liability Monitor published incorrect 2020 and 2021 rate data for The Doctors Company in New York State.
For corrected 2020 and 2021 New York rates from The Doctors Company, please CLICK HERE
Medical Liability Monitor regrets the confusion.