New York Court of Appeals Rules Hospital’s Self-Insurance Provides Excess Malpractice Coverage

November 3, 2026 by matray

The New York Court of Appeals ruled that a hospital’s self-insurance plan provided malpractice coverage for an employed physician, but that the coverage was excess to the physician’s primary insurance, requiring the hospital and the physician’s excess insurer to share settlement costs beyond the primary policy’s limits.

Case: Kolli v. Kaleida Health, No. 72, 10/22/2026, published.

Facts and procedural history: In 2011, Dr. Venkateswara Kolli treated a patient as part of his duties pursuant to an on-call, per diem physician employment agreement with Kaleida Health.

When the patient later filed a medical malpractice action against Kolli and Kaleida, Kolli filed an insurance claim with his primary medical malpractice insurer, the MLMIC Insurance Co., as well as his excess insurer, the Healthcare Professionals Insurance Co.

After Kolli died in 2020, the medical malpractice action settled. Kaleida, MLMIC, and HPIC agreed to fund the settlement while reserving their rights to determine insurance coverage and priority of coverage.

The executor of Kolli’s estate then filed a declaratory judgment action to determine those coverage issues.

The estate argued Kaleida provided Kolli with insurance coverage under Kaleida's self-insurance plan and that MLMIC is entitled to be reimbursed by Kaleida for expenses it incurred defending Kolli.

Kaleida contended HPIC was obligated to provide first layer excess coverage pursuant to the policy HPIC issued to Kolli.

HPIC moved for summary judgment dismissing all claims against it and seeking reimbursement of its contribution towards the settlement. The estate also moved for summary judgment, as did Kaleida.

Niagara County Supreme Court Justice Edward Pace granted the motions of HPIC and the estate, and denied Kaleida’s motion. Pace concluded HPIC's coverage constituted excess coverage and declared that the full amount of the settlement must be paid by Kaleida and MLMIC in proportion to their respective policy limits.

Kaleida appealed.

The Appellate Division’s 4th Department found Kolli was entitled to coverage under Kaleida's self-insurance plan.

“Kaleida failed to meet its burden of establishing that its construction is the only fair construction,” the Appellate Division said, finding the language in Kaleida's self-insurance plan could reasonably be interpreted to limit coverage when Kolli treated his private practice patients at Kaleida, but not to limit coverage where, as in the underlying action, he treated a patient at Kaleida as part of his on-call duties pursuant to his employment agreement.

Since Kaleida’s self-insurance plan protected against physicians' medical malpractice liability, the Appellate Division said it constituted "other insurance policy or equivalent coverage" under MLMIC's policy.

The Appellate Division also said Kaleida's coverage was excess to MLMIC's policy, as Kaleida's self-insurance plan provides that physicians "shall be assumed to be maintaining primary medical practice insurance."

The Appellate Division said MLMIC’s $1.3 coverage limit applied, and Kaleida and HPIC are responsible as excess insurers for the remaining portion of the settlement, with Kaleida responsible for 91.67% and HPIC responsible for 8.33%.

Analysis: The New York Court of Appeals agreed Kolli was covered pursuant to the unambiguous terms of Kaleida's self-insurance plan and Kaleida's employment agreement with him.

The court rejected Kaleida's contention that its self-insurance plan falls outside the "other insurance" clauses in the policies issued by MLMIC and HPIC. The court said it was an insurance policy as it protected physicians against risks, and contained terms regarding priority of coverage and coverage exclusions.

Moreover, the "other insurance" clauses contained within the MLMIC and HPIC policies expressly encompassed "insurance equivalent[s]" or "equivalent coverage," the court said. So even if the self-insurance plan was not "insurance," it was at a minimum an "equivalent" thereto, the court said.

The court further agreed that Kaleida's coverage is excess to MLMIC's coverage, and that Kaleida and HPIC are responsible for excess coverage on a pro rata basis.

Disposition: Affirmed.

To read the court’s decision, click here.

MPL Insurers’ Investment Income Rises, Returns Continue to Trail P&C Industry

November 3, 2026 by matray

Medical professional liability insurers continued to benefit from improving investment income in 2025, although their fixed-income portfolios generated slightly lower yields than those of the broader property/casualty insurance industry, according to a new analysis by New England Asset Management (NEAM).

The October 2026 report, 2025 Medical Liability Insurers Investment Highlights: Higher Income, Measured Risk, examined the investment portfolios and financial characteristics of 110 U.S. insurers primarily or exclusively underwriting MPL coverage. The study compared their performance with that of other P&C insurers using year-end 2025 statutory financial data. NEAM generally excluded Berkshire Hathaway from its broader industry comparisons because the company's unusually large investment portfolio, particularly its substantial equity holdings, could distort industrywide results.

The MPL composite's net investment income rate reached 3.53% in 2025, compared with 3.71% for the broader P&C industry. Although MPL insurers continued to benefit from higher investment returns, their income rate remained 18 basis points below that of the comparison group.

Fixed-income book yields also improved, rising from 4.10% in 2024 to 4.27% in 2025, marking the fourth consecutive annual increase. The broader P&C industry's book yield reached 4.38%, widening its advantage over MPL insurers from seven basis points in 2024 to 11 basis points.

The improvement reflects the higher interest-rate environment that emerged in 2022, allowing insurers to gradually replace maturing fixed-income investments with securities offering more attractive yields.

Despite the continued yield differential, NEAM found that MPL insurers maintained investment portfolios with credit quality and duration broadly comparable to those of other P&C insurers.

MPL insurers held $41.9 billion in invested assets at year-end 2025, up 3.7% from $40.4 billion a year earlier. Statutory surplus increased 3.8% to $19 billion, while net premiums written rose 6.1% to approximately $7.7 billion. Loss and loss adjustment expense reserves totaled $21.3 billion, an increase of 3.9%.

The study highlighted significant differences between MPL insurers' financial structures and those of the broader P&C industry, reflecting the long-tail nature of medical malpractice claims.

MPL insurers maintained a net premiums-to-surplus ratio of approximately 0.4, compared with 1.0 for the broader P&C industry. Their reserves-to-premium ratio was 2.8, nearly three times the broader industry's ratio of 1.0.

Despite those differences, the MPL composite's invested assets-to-surplus ratio of 2.2 was relatively close to the broader industry's 2.4.

Portfolios Remain Conservative

NEAM found that MPL insurers generally maintained conservative investment allocations while increasing their holdings of cash and short-term securities.

Bonds represented 65.2% of MPL invested assets at year-end 2025, down from 68.6% in 2024. Cash and short-term investments increased from 7.9% to 10.9%, while equity allocations remained unchanged at 15%.

Schedule BA and other investments, which include certain alternative and less traditional assets, increased from 8.2% to 8.8% of invested assets.

Using a definition of risk assets that includes equities, below-investment-grade bonds and Schedule BA holdings, NEAM found that MPL insurers' risk assets represented 57.5% of statutory surplus, compared with 64.4% for the broader P&C industry.

The MPL composite also maintained strong fixed-income credit quality, with an average rating of approximately AA-. Below-investment-grade bond holdings declined to 4.8% of fixed-income investments, continuing a shift toward higher-rated securities following the Federal Reserve's interest-rate increases beginning in 2022.

Within fixed-income portfolios, MPL insurers maintained a greater concentration in agency residential mortgage-backed securities than their P&C counterparts. Those securities represented 16.3% of MPL bond holdings, compared with 11.1% for other P&C insurers.

Conversely, MPL insurers allocated smaller shares to government and agency bonds and tax-exempt municipal securities.

The report identified a notable difference in yields on agency residential mortgage-backed securities. MPL insurers earned a 4.65% book yield on those holdings, compared with 5.20% for the broader P&C industry.

Corporate bonds remained the largest fixed-income allocation for both groups, accounting for 38.1% of MPL bond portfolios and 36.8% of other P&C insurers' holdings.

Higher Risk Associated With Higher Yields

One of the study's principal findings was that insurers assuming greater fixed-income investment risk generally achieved higher book yields.

NEAM developed a risk score incorporating portfolio duration, credit quality and convexity, which measures how securities' interest-rate sensitivity changes as market rates fluctuate.

The analysis found a positive relationship between risk scores and book yields across MPL and other P&C insurers.

Larger MPL insurers, particularly those with more than $1 billion in invested assets, tended to maintain portfolios with higher risk scores and higher yields. Smaller insurers generally pursued more conservative strategies and generated lower yields.

The study also found that MPL insurers' fixed-income portfolios had an average option-adjusted duration of 4.6 years, compared with 4.8 years for the broader P&C industry. The similarity was notable given the longer-tail liabilities associated with medical malpractice insurance.

NEAM's analysis included 110 MPL insurers, of which only 10 held more than $1 billion in invested assets. Another 32 held between $100 million and $1 billion, while 68 had less than $100 million.

The findings suggest that company size and willingness to assume investment risk may influence fixed-income yields, although the report did not determine whether higher returns adequately compensated insurers for the additional risk.

Overall, NEAM concluded that MPL insurers continued to improve investment income while maintaining broadly conservative portfolios. The industry's fixed-income yields remained modestly below those of other P&C insurers, with differences in portfolio composition and risk-taking contributing to variations in investment performance.

Aon Launches Healthcare Risk Capital Unit to Address Growing Liability Pressures

November 3, 2026 by matray

Aon plc has launched a North America Healthcare division within its Risk Capital business to help U.S. healthcare providers and their insurers manage increasingly interconnected financial and liability risks.

The new division will combine Aon's medical professional liability reinsurance expertise with its commercial risk capabilities, serving hospitals, health systems, physician groups and the insurers that cover them.

Announced Nov. 3, the initiative comes as healthcare organizations assume greater financial responsibility for patient outcomes while confronting rising liability costs, social inflation and increasingly large malpractice verdicts.

According to the Health Care Payment Learning & Action Network, nearly 29% of U.S. healthcare payments now flow through value-based arrangements that expose providers to downside financial risk.

Aon said the new division will help healthcare organizations and insurers evaluate their combined risk exposures, determine which risks to retain or transfer, and develop financing strategies using traditional insurance, reinsurance, captive insurance arrangements and alternative capital.

“Healthcare providers in the U.S. are becoming risk-bearing organizations, and the insurers that protect them face the same pressures,” said Joe Peiser, CEO of Aon's Risk Capital business. “Through our Risk Capital structure, Aon is uniquely positioned to help connect both providers and insurers with the right capital, in the right structure, at the right time.”

Aon appointed Nick Gaudiosi as North America Healthcare Industry Leader, Risk Capital, to oversee the new division.

Gaudiosi has served as senior managing director and healthcare segment leader for Aon's reinsurance business since 2025, helping develop the firm's medical professional liability reinsurance practice. He will continue overseeing that strategy in his expanded role.

Gaudiosi joined Aon in 2023 after serving as president and chief operating officer of American Healthcare Providers Insurance Services, which he led through its acquisition by Curi.

“The risks carried by health systems and by the insurers that protect physicians and hospitals are increasingly linked,” Gaudiosi said. “Bringing our reinsurance and commercial risk expertise together gives clients one integrated view of that risk and a clear strategy for financing it.”

Willis Re Acquires BMS Re US, Broadens MPL Reinsurance Capabilities

November 2, 2026 by matray

Willis Re has completed its acquisition of BMS Re US, expanding its reinsurance broking capabilities in medical malpractice and other property and casualty lines, the company announced Nov. 1.

The transaction includes BMS Intermediaries Inc., BMS Capital Advisory LLC and the associated U.S. reinsurance broking team based in London. Financial terms were not disclosed in the announcement.

BMS Re US provides reinsurance and capital solutions to U.S. clients. Willis Re said the acquisition strengthens its capabilities in medical malpractice, property catastrophe and workers’ compensation while supporting further U.S. expansion and diversification into additional lines of business.

“We are delighted to welcome the BMS Re US team to Willis Re," said Lucy Clarke, a Willis Re board member. "By bringing together our complementary strengths, we are creating a stronger platform for growth, with access to a broader global network, deeper market relationships and enhanced specialist expertise. This will support continued expansion, closer engagement and the delivery of greater value to our clients.”

AMA Proposes Liability Framework for Clinical AI

October 29, 2026 by matray

The American Medical Association has proposed a framework for determining liability when artificial intelligence used in clinical care causes patient harm, calling for responsibility to be allocated among physicians, technology developers and healthcare organizations according to their ability to prevent or mitigate risks.

The framework, announced Oct. 29 by the AMA's Center for Digital Health and AI, addresses concerns that existing medical liability standards were not designed for technologies in which multiple parties exercise varying degrees of control over clinical decisions and patient outcomes.

The AMA warned that physicians could face liability for AI-related risks they cannot reasonably identify or prevent, while patients harmed by the technology could encounter difficulties obtaining legal remedies.

“Patients must have meaningful avenues for recourse when clinical AI causes harm, and physicians must be able to use these technologies with confidence that responsibility reflects what they can reasonably know and control,” said AMA President Willie Underwood III, MD.

The proposed approach would establish distinct but complementary responsibilities for the parties involved in developing, deploying and using clinical AI systems.

Under the framework, developers and manufacturers would be responsible for demonstrating and maintaining the safety and effectiveness of their products, including addressing risks within their control.

Hospitals, health systems and other healthcare organizations would be accountable for selecting, implementing, governing and monitoring AI technologies in clinical settings.

Physicians, meanwhile, would remain responsible for exercising clinical judgment, but their liability would be tied to the degree of oversight they can meaningfully provide, considering an AI system's intended use, known limitations and the information available when making treatment decisions.

The AMA also emphasized that patients must retain meaningful opportunities to pursue remedies when injuries result from defective AI products or other failures for which a party may be held legally responsible.

The framework recognizes that multiple parties could share liability for an AI-related patient injury, rather than placing responsibility exclusively on the treating physician or the technology developer.

A central principle is that requiring physician oversight of AI does not automatically relieve developers or healthcare organizations of their own responsibilities. The AMA said clinical review cannot compensate for inadequate evidence supporting an AI system's safety, deficiencies in its design or circumstances that prevent physicians from exercising meaningful oversight.

“As AI assumes more clinical functions, developers, healthcare organizations and physicians each have important responsibilities,” Underwood said. “We need clear expectations that protect patients, support sound clinical judgment, and ensure accountability remains with those best positioned to prevent harm.”

The proposal reflects growing concern over how traditional medical malpractice and product liability principles should apply as AI technologies become more deeply integrated into patient care.

The AMA's framework outlines recommended principles for assigning responsibility rather than establishing binding legal standards. Its central recommendation is that liability should follow each party's authority over an AI system and its practical ability to identify, prevent or mitigate harm.

AI-Driven Newcomer Corgi Enters Medical Malpractice Market

October 28, 2026 by matray

Corgi Insurance, a relatively new, venture-backed insurer specializing in AI-driven underwriting, has entered the medical professional liability market with the launch of coverage for physician practices, urgent care centers, dental offices and other healthcare providers.

The San Francisco-based company announced Oct. 28 that its new Corgi Medical Malpractice product is designed to simplify the process of obtaining professional liability insurance through online applications, faster quoting and underwriting tailored to individual practices.

Founded in 2024, Corgi initially focused on insuring technology startups and other growing businesses before expanding into additional commercial insurance lines. The company has attracted substantial venture capital backing, announcing $378 million in financing during the first five months of 2026. Forbes reported in September that a subsequent funding round valued the company at $5 billion.

According to Corgi, the new MPL coverage addresses claims involving misdiagnosis or delayed diagnosis, surgical and treatment errors, medication errors and failure to obtain informed consent.

The company said it evaluates practices based on specialty, size and claims history rather than relying on broad underwriting averages. Coverage can be adjusted as practices add providers, open locations or expand services, with multiple providers insured under a single program.

"Healthcare providers should be able to get the coverage they need without it turning into a months-long project," said Sam Sykes, deputy general counsel at Corgi Insurance. "We built Corgi Medical Malpractice so practices can get covered quickly and stay focused on their patients."

The announcement did not identify the insurance entity underwriting the policies, specify the states where coverage will be available or disclose whether policies will be written on a claims-made or occurrence basis. The release also did not provide information about available limits or reinsurance arrangements.

Corgi operates through multiple insurance entities, including an Arizona-domiciled risk retention group, and has launched its own admitted property/casualty insurance carrier. The announcement did not indicate which structure would support its new medical malpractice product.

The company describes itself as an AI-native insurance carrier and financial infrastructure company combining proprietary underwriting technology with in-house claims capabilities.

Iowa Supreme Court Says Physicians Can Certify Malpractice Claims Against Physician Assistants

October 28, 2026 by matray

The Iowa Supreme Court reversed the dismissal of a medical malpractice lawsuit against a physician assistant, ruling that physicians and physician assistants practice in substantially similar fields under the state's certificate of merit requirements. The court held that an expert's qualifications depend on the field covered by their professional license, rather than their particular area of medical practice. The decision allows a surgeon's certificate of merit affidavit to support a malpractice claim against a physician assistant practicing in primary care.

Case: Davenport v. Fuller, No. 25–1183, 10/16/2026, published.

Facts: In March 2023, Joshua Davenport saw his primary care provider, physician assistant Nathaneal Fuller, twice in three days, complaining of abdominal pain and trouble urinating.

Fuller diagnosed Davenport with urinary retention secondary to a probable enlarged prostate and sent him home with medication.

A few days later, Davenport’s symptoms worsened, and he sought emergency care. Davenport was then diagnosed with acute diverticulitis. He suffered a perforated bowel, feculent peritonitis, and septic shock, requiring him to be hospitalized for several weeks.

Procedural history: Davenport filed a medical malpractice action against Fuller. He timely served Fuller with a certificate of merit affidavit signed by Dr. Cass Franklin.

After Davenport’s deadline to designate additional experts expired, Fuller moved to dismiss the lawsuit for failure to comply with Iowa’s certificate of merit affidavit requirements. Fuller argued that Franklin, as a surgeon, was not qualified to opine on the standard of care for a physician assistant practicing as a family medicine or primary care provider.

A trial judge agreed and granted the motion to dismiss.

Analysis: The Iowa Supreme Court explained that a medical malpractice expert must be “licensed to practice in the same or a substantially similar field as the defendant,” and have “actively practiced in the same or a substantially similar field” for the past five years.

The court said it has interpreted the term “field” as categorically distinguishing one type of healthcare provider from another, and that it has rejected the argument that “field” means a specific practice area.

An expert and defendant are therefore “licensed in and practice in the same field if they hold the same license and practice under the same license,” the court said.

Here, the court noted, the judge found Fuller practiced “mainly as a primary care provider in the practice of family medicine” and Franklin practiced “in the fields of general surgery, vascular access surgery, and transplant surgery” while working as a trauma surgeon in the emergency department.

The court said that “a healthcare provider’s field is coterminous with his license, not a specific area of practice within that license,” and so the judge erred in focusing on Fuller and Franklin’s respective areas of practice within their licenses to conclude they did not practice in the same or substantially similar fields.

While Fuller’s license as a physician assistant is not “the same” as Franklin’s license as a physician, the court said they are licensed and practice in substantially similar fields.

“Fields are substantially similar when they share a high degree of likeness in their core characteristics, although not identical, such that a practitioner licensed in one field would, by virtue of that license alone, possess the foundational knowledge and competence to evaluate and opine on the standard of care applicable to the other field,” the court said.

The court said it has identified seven nonexclusive factors relevant to assessing whether specialties are substantially similar: (1) the formal definitions of the specialties, (2) the certifying board structures, (3) the required education and training, (4) the scope of practice, (5) overlap in core and procedural competencies, (6) professional association overlap, and (7) hospital credentialing patterns.

The court determined “the respective definitions, scopes of practice, certifying board structures, and education and training requirements for physicians and physician assistants demonstrate that the two fields are substantially similar.”

Iowa defines both physician assistants and physicians based on a shared “practice of medicine, the court said. The specific medical services physician assistants can provide also indicates that their scope of practice is substantially similar to physicians, the court said, and there is licensure oversight by the board of medicine and mandatory physician participation on the board of physician assistants.

“The requirement for physician oversight before a physician assistant can practice medicine independently further supports a determination that the fields are substantially similar,” the court added.

In light of these considerations, the court concluded physicians and physician assistants are licensed to practice in substantially similar fields.

Disposition: Reversed and remanded.

To read the court’s decision, click here.

AM Best Upgrades The Doctors Company to A+ Following ProAssurance Acquisition

October 28, 2026 by matray

AM Best has upgraded the Financial Strength Rating of The Doctors Company Insurance Group to A+ (Superior) from A (Excellent), citing the medical professional liability insurer's strengthened market position following its acquisition of ProAssurance Corp. in June.

The rating agency also upgraded the group's Long-Term Issuer Credit Rating to “aa-” (Superior) from “a+” (Excellent), according to an Oct. 27 announcement. The outlooks for both ratings were revised to stable from positive.

The upgrades reflect AM Best's decision to raise its assessment of The Doctors Company's business profile to favorable from neutral, recognizing its position as the second-largest writer of medical professional liability insurance in the United States and the additional scale provided by the ProAssurance acquisition.

AM Best cited the group's geographic diversification and broad mix of insured healthcare providers, along with an experienced management team and innovation initiatives that are producing increasingly measurable business results.

The rating agency assessed The Doctors Company's balance sheet strength as strongest, its operating performance as adequate and its enterprise risk management as appropriate.

The group continues to maintain the strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio. Consistent underwriting and overall operating results have supported surplus growth over the past five years.

Although AM Best expects the ProAssurance acquisition to modestly weaken underwriting performance in the near term, it anticipates that the combined organization's greater scale will contribute positively to overall earnings. Significant net investment income is expected to offset modest underwriting losses.

The Doctors Company completed its approximately $1.3 billion acquisition of ProAssurance in June, significantly expanding its presence in the U.S. medical professional liability insurance market.

The rating upgrades apply to The Doctors Company, An Interinsurance Exchange, and five core subsidiaries: TDC National Assurance Co., TDC Specialty Insurance Co., TDC Special Risks Insurance Co., The Doctors Company Risk Retention Group and Hospitals Insurance Co.

CFC Expands Affirmative AI Coverage to eHealth, Professions Policies

October 27, 2026 by matray

Specialty insurer CFC has expanded its affirmative artificial intelligence coverage to its eHealth and Professions insurance products, introducing policy language intended to clarify how coverage responds when AI contributes to an insured loss.

The company announced Oct. 27 that it has added affirmative AI language to its global eHealth product and U.S. Professions policy, with equivalent endorsements available for professional liability policies in other markets.

The eHealth enhancements address a range of AI-related exposures, including errors, algorithmic bias, AI hallucinations and failures involving technologies such as ambient clinical documentation tools and software supporting clinical trials. CFC said its entire suite of healthcare package products has been updated to include affirmative AI coverage.

The changes are intended to clarify coverage when AI is incorporated into an insured's business operations and contributes to a claim, an increasingly relevant issue as healthcare organizations adopt AI technologies for patient care, administrative functions and clinical research.

"Insurance policies must step up and clarify intent of coverage when it comes to AI related loss," said Ellie Saunders, CFC's head of healthcare and life sciences. "Our eHealth policy does exactly that, affirming our position where AI is used within an insured's business model that contributes to, or causes, loss."

Affirmative AI coverage expressly addresses AI-related exposures in policy language rather than leaving coverage questions to interpretation under existing provisions. The clarification is particularly relevant to healthcare organizations using AI-enabled technologies that may contribute to professional liability claims.

CFC also expanded its Professions product to clarify coverage for AI-related exposures arising from professional services firms' client-facing activities and routine business operations.

Ed Cole, CFC's professional liability, healthcare and life science development leader, said the growing use of AI creates risks alongside its potential benefits.

"Without the right governance, risk management and insurance protection in place, businesses may face significant exposure," Cole said. "By introducing affirmative AI coverage across our Professions policy, we're providing greater clarity around how cover responds to AI-related exposures."

The expansion is part of CFC's broader initiative to introduce affirmative AI coverage across its insurance portfolio. The company said its products now expressly address AI-related risks in media, intellectual property, financial services, cyber, healthcare and professional services.

AM Best Revises Coverys Outlook to Stable, Affirms A Rating

October 26, 2026 by matray

AM Best has revised its outlook for Coverys Companies to stable from negative, citing improved operating performance, stronger earnings and surplus growth, while affirming the medical professional liability insurer's Financial Strength Rating of A (Excellent).

The rating agency also affirmed the Long-Term Issuer Credit Ratings of “a” (Excellent) for Medical Professional Mutual Insurance Co. and its affiliated companies, collectively known as Coverys, according to an Oct. 23 announcement.

The outlook revision reflects improved operating results in recent years and through the first half of 2026, along with AM Best's expectation that Coverys' future performance will generally align with medical professional liability insurers receiving an adequate operating performance assessment.

Although challenging conditions in the MPL market continue to pressure underwriting results, Coverys has benefited from consistent and growing net investment income, allowing the company to report positive pretax earnings in each of the past three years and through the first six months of 2026. Realized capital gains also have contributed significantly to earnings in recent years.

AM Best said these developments have improved the group's overall operating ratios and measures of profitability.

The rating agency assessed Coverys' balance sheet strength as very strong, its operating performance as adequate, its business profile as neutral and its enterprise risk management as appropriate.

Coverys continues to maintain the highest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio. Improved operating results also have allowed the company to increase its surplus over the past three years and through the first half of 2026.

However, AM Best noted that persistent adverse development of prior-year loss reserves prompted it to lower Coverys' balance sheet strength assessment from strongest to very strong. The agency said it will continue monitoring the company's loss reserves and related developments.

Coverys ranked as the seventh-largest U.S. MPL insurer based on direct premiums written in 2025, according to AM Best.

The company's management remains focused on improving its core U.S. MPL business while diversifying operations through expansion of its accident and health insurance lines and international MPL presence.

AM Best also cited strengthened leadership across the organization and an established enterprise risk management framework as supporting the group's operations.

The ratings and revised outlooks apply to Medical Professional Mutual Insurance Co., ProSelect Insurance Co., Preferred Professional Insurance Co., Coverys Specialty Insurance Co., Coverys Risk Retention Group Inc., Coverys Limited and Coverys International Insurance Company Designated Activity Company.