Fitch Ratings Affirms ‘A’ Ratings, ‘Stable’ Outlook for The Doctors Company

July 17, 2023 by matray

Fitch Ratings affirmed its “A” (Strong) Insurer Financial Strength ratings for The Doctors Company, part of TDC Group. The outlook of these ratings is “Stable.”

Fitch noted that the ratings are based on a very strong statutory capital position and sufficient loss reserve levels. Fitch further stated that The Doctors Company has a strong business profile as the nation’s number-two writer in medical professional liability insurance.

Fitch commented that The Doctors Company’s capital position is “very strong.” The “A” with “Stable Outlook” ratings include:

  • The Doctors Company, an Interinsurance Exchange

  • The Doctors Company Risk Retention Group, a Reciprocal Exchange

  • TDC National Assurance Company

  • TDC Specialty Insurance Company

“These ratings from Fitch reflect the strength and stability of The Doctors Company,” said Marco Vanderlaan, The Doctors Company and TDC Group chief financial officer. “This financial strength gives us the capability and resources necessary to protect our members today and for many years to come as we advance, protect and reward the practice of good medicine.”  

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AM Best Affirms Superior Credit Ratings of Members of MedPro Group

July 13, 2023 by matray

AM Best has affirmed the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Ratings of “aa+” (Superior) of the members of MedPro Group (MedPro). These Credit Ratings (ratings) apply to The Medical Protective Company (Fort Wayne, IN) and its affiliates: Princeton Insurance Company (Princeton, NJ); PLICO, Inc. (Oklahoma City, OK); Wellfleet Insurance Company (Fort Wayne, IN); and Wellfleet New York Insurance Company (Flushing, NY); as well as MedPro’s two reinsured affiliates, MedPro RRG Risk Retention Group and AttPro RRG Reciprocal Risk Retention Group (both domiciled in the District of Columbia). The outlook of these ratings is stable.

The ratings reflect MedPro’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

The ratings also acknowledge MedPro’s risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), long-term profitable operating performance and the leading market position it maintains in the medical professional liability (MPL) sector. Additionally, the ratings consider the group’s substantial distribution capabilities, prudent claims-handling philosophy and culture of holistic risk management. The group consistently outperforms peers by most metrics, illustrated by substantial historical returns on equity, low operating ratios and solid net underwriting income. Furthermore, the ratings benefit from the explicit and implicit financial support provided by its affiliate, National Indemnity Company, and MedPro’s ultimate parent, Berkshire Hathaway Inc. [NYSE: BRK A and BRK B], which includes reinsurance programs, investment opportunities and capital support.

Partially offsetting these positive rating factors are the inherent challenges associated with the MPL line of business, particularly as it relates to price competition, changing market dynamics, potential changes in legislation (i.e., tort reform), increasing loss cost trends and regulatory risk. At the same time, AM Best recognizes the organization’s strong management team, diversified premium base and jurisdictional diversity, which have contributed to MedPro outperforming its peers over the longer term.

The group’s large allocation to common stocks exposes it to significant volatility during periods when the equity markets experience sharp declines. The group has historically demonstrated its ability to absorb this volatility and maintain the strongest level of risk-adjusted capitalization due to its low underwriting leverage, driven by its affiliated reinsurance agreement with National Indemnity Company and MedPro’s substantial capital position, and the investment managers’ historical trend of success in turbulent markets.

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Medical Liability Monitor July 2023 issue highlights

July 6, 2023 by matray

Below are some headlines and article synopses from the July 2023 issue of Medical Liability Monitor. To read the articles in entirety, please subscribe today.

MPL Insurance Market Recovery at Risk of Stalling, Positive Pricing Window Finite
The U.S. medical professional liability insurance (MPLI) market staged a significant recovery in 2022 with a 102.5% combined ratio, compared to an average of 109% during the previous four years. Positive pricing actions and a more favorable prior underwriting period reserve experience are key factors behind the recent improvement. While this shift is encouraging, a near-term return to consistent underwriting profits remains unlikely. The level of premium rate increases shows signs of moderating, creating questions about whether premium volume can keep pace with loss-cost patterns influenced by inherently volatile claims litigation and settlement activity, persistent higher inflation and a weaker economy …

EmPRO Posts Impressive Second-Year Results, Signals Regional Expansion
EmPRO Insurance Co. recently marked its second year writing business as the third-largest admitted medical professional liability insurer in New York State. A wholly owned subsidiary of Physicians’ Reciprocal Insurers (PRI), EmPRO was capitalized in 2020 by its parent, while assuming all of PRI’s active New York business. For the year ended Dec. 31, 2022, EmPRO recorded another year of improved financial performance, reporting admitted assets of $395.8 million, liabilities of $283.7 million, reserves of $176.9 million, surplus of $112.1 million, gross written premium of $178.4 million, net income of $12.1 million and a combined ratio of 82.7% …

Indemnity Payments Impact First-Quarter financial Results for MPL Specialty Insurers
Perhaps the most interesting storyline this quarter was the resurgence of indemnity payments during the fourth quarter of 2022 and the first quarter of 2023. MPL specialty writers experienced an 18-month slowdown in indemnity payments that started in the second quarter of 2020. This includes the four quarters with the fewest indemnity payments made in the last 10 years. Beginning in the fourth quarter of 2021, it appeared as though payments had stabilized, but the hole created between the second quarter of 2020 and the third quarter of 2021 had not been filled. Now, during the last two quarters, the composite has had its two largest quarters of indemnity payments on record …

New York Lawmakers Again Vote to Update Wrongful Death Statute
New York lawmakers have again overwhelmingly passed a bill to overhaul the state’s 176-year-old wrongful death statute. A similar bill was vetoed by Gov. Kathy Hochul on Jan. 30 due to her concerns it could result in “significant costs for many sectors of our economy, particularly hospitals that are still recovering from the pandemic and struggling to stay afloat“ …

Nevada More Than Doubles its Noneconomic Damage Cap
Following heated debate over a bill proposing to significantly raise Nevada’s $350,000 noneconomic damage cap for medical liability lawsuits, healthcare provider and trial lawyer interests presented lawmakers with a deal last month to establish a new cap of $750,000. The previous cap was created via ballot initiative in 2004. The legislation also increases the statute of limitations to initiate a medical malpractice lawsuit from one year to two years from when the plaintiff should have been able to recognize a complication or three years from the date the alleged malpractice incident occurred ...

Healthcare Risk Retention Groups Drive Record RRG Premium Growth
Risk retention groups (RRGs) reported record premium growth in 2022. Premium increased by 12.9% to $4.9 billion, an increase of more than $558 million over the $4.3 billion reported in 2021, according to reporting by the Risk Retention Reporter. This marks the largest premium increase in dollar terms for the RRG industry, surpassing the premium growth of $527 million in 2003. Among RRGs reporting the largest premium gains, the healthcare sector led representation with six RRGs reporting premium gains of $10 million or more …

Subscribe today to get this issue (as well as the 2022 Annual Rate Survey at no additional cost).

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NFP Acquires Presidio Financial Services Corp., Expands Its Specialized Medical Malpractice Insurance Expertise

June 29, 2023 by matray

NFP, a property and casualty broker, benefits consultant, wealth manager and retirement plan advisor, announced it has acquired Presidio Financial Services Corp. Based in Westlake Village, Calif., Presidio is an independent insurance brokerage that provides an extensive range of products and solutions tailored specifically for physicians, hospitals, healthcare facilities and healthcare professionals. The acquisition closed on April 7.

Gisela Plazas, Presidio's founder and CEO, will be joining NFP and working with Scott Foster, NFP’s Healthcare & Life Sciences Specialty practice leader. “We’re very excited to welcome Gisela to NFP,” said Foster. “She is a strong producer with an extensive network of relationships, and we look forward to introducing NFP’s breadth of solutions to her current and future clients.”

Founded in 2002, Presidio’s specialized insurance offerings include healthcare professional liability, business office coverage, errors and omissions, workers’ compensation, commercial general liability, directors and officers, cyber liability, employment practices liability and umbrella coverage.

“Adding Presidio is a great strategic move for our growing P&C presence in the Western US,” said Mike Schneider, president of NFP’s West region. “Gisela’s specialized expertise in medical malpractice will complement our existing capabilities and create new opportunities to deliver value to clients.”

"I’m thrilled to join NFP and begin contributing to the success of a growing, people-first organization,” said Plazas. “This is a great opportunity for me to integrate my medical malpractice knowledge across the organization and introduce additional solutions to our clients.”  

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Integris RRG Elects Two Doctors to its Board of Directors at Recent Annual Meeting of Members

June 28, 2023 by matray

Integris Group announced the elections of Powen Hsu, MD, and Jeffrey Rind, MD, to the Integris RRG Board of Directors. The elections took place at the Integris RRG Annual Meeting of Members on June 9th.

“The addition of Dr. Hsu and Dr. Rind to our Board of Directors will deliver new insights and perspective to the Company,” said Stephen J. Gallant, Integris Group chief executive officer. “Both physicians bring a wealth of knowledge to our Board of Directors. We are confident their presence will enhance our progress towards our strategic goals, benefiting our policyholders. We look forward to working with them as we continue our mission of strategic growth and welcome their contributions.”

Powen Hsu, board certified in physical medicine and rehabilitation and addiction medicine, is the medical director at the Farnum Center, an addiction treatment center in Manchester, NH. He has also served as medical director at several other facilities, including Fusion Health Services, Encompass Health Concord, Blueprint/Bonfire Recovery Center and as the section chief of adult medicine at Catholic Medical Center. Hsu is a past member of Catholic Medical Center’s Board of Directors. Hsu received his medical degree from Tufts University and completed his postgraduate medical training at Salem Hospital, Sinai Hospital, and John Hopkins University Hospital.

A board certified neurologist, Rind is a founding member and managing partner of Derry Neurological Associates in Derry, NH. Rind has also served in a variety of hospital leadership roles, including chief of staff, chairman of the Board of Trustees, and chairman of the Credentials Committee at Parkland Medical Center. He is a past member of the Center for Life Management’s Board of Directors and Finance Committee. Rind received his undergraduate degree from State University of New York at New Paltz, his Ph.D. from City University of New York, his medical degree from New York Medical College and completed his postgraduate medical training at Mount Sinai Hospital.  

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Integris Group Elects Gary DiDato, MD, to the Board of Directors at Annual Meeting of Members

June 28, 2023 by matray

Integris Group announced the election of Gary DiDato, MD, to a three-year term on the Integris Group Board of Directors. The election took place June 10 at the Integris Group Annual Meeting of Members. DiDato was initially appointed to the Board in January of 2023.

“We are pleased to officially welcome Dr. DiDato to the board of directors following his election by our membership,” said Stephen J. Gallant, Integris Group chief executive officer. “His expertise will prove to be an asset in executing our strategic plans and continuing to grow the Company.”

DiDato is an anesthesiologist currently serving as senior attending at Middlesex Health and as an attending anesthesiologist at the Middlesex Endoscopy Center, Shoreline Colonoscopy Suites, the Middlesex Center for Advanced Orthopedic Surgery and the Guilford Surgery Center. DiDato is the vice president of anesthesiologists of Middletown, PC, located in Middletown, Conn., where he has been practicing since 2005. He is also the Department of Anesthesia chairman at Middlesex Hospital.  

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The Doctors Company Awarded a Great Place to Work Certification

June 20, 2023 by matray

The Doctors Company announced it was certified as a Great Place to Work in 2023. This is the second time the company has received the designation.

A global authority on workplace culture, employee experience and the leadership behaviors required for market-leading revenue, employee retention and innovation, the Great Place to Work Institute uses its Trust Index Survey to assess employee satisfaction in key areas. A summary of The Doctors Company scores includes:

  • 92% said when they joined The Doctors Company, they were made to feel welcome.

  • 90% said The Doctors Company management is honest and ethical in its business practices.

  • 90% perceive that management promotes inclusive behavior, avoids discrimination, and is committed to ensuring fair appeals.

“Promoting a people-focused culture is a fundamental part of our talent strategy,” said Rachel Nelson, vice president of human resources for The Doctors Company. “We intentionally and regularly seek employee feedback — inviting every voice to be heard as we continue our ongoing efforts to improve the employee experience.”

“Our company culture is a top priority, and this certification is a testament to the mission-based work environment created by our people,” said Richard E. Anderson, MD, FACP, chairman and CEO of The Doctors Company and TDC Group. “Healthcare is changing rapidly, and we are anchored in purpose and driven to serve.”

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Medical Liability Monitor June 2023 issue highlights

June 13, 2023 by matray

Below are some headlines and article synopses from the June 2023 issue of Medical Liability Monitor. To read the articles in entirety, please subscribe today.

AM Best: U.S. Medical Professional Liability Insurers Make Underwriting, Net Income Gains Despite Difficult Environment
Despite improved underwriting results and a positive net income, AM Best is maintaining its negative outlook for the medical professional liability (MPL) insurance segment in 2023. The ratings agency justified the outlook on the segment’s negative returns and an overall decline in policyholders’ surplus due primarily to unrealized losses stemming from volatility in the capital markets …

New Leapfrog Report Reveals COVID-Related Increase in Healthcare-Associated Infections
The latest data from The Leapfrog Group’s spring 2023 Hospital Safety Grade indicates that the average risk of three healthcare-associated infections (HAIs) reached a five-year high in hospitals during the COVID-19 pandemic and remains elevated. These infections include Methicillin-resistant Staphylococcus aureus (MRSA), central line-associated bloodstream infections (CLABSI) and catheter-associated urinary tract infections (CAUTI). The report also reveals a continuous decline in patient experience measures, which are self-reported by patients and have a correlation with patient outcomes …

Inaugural MPL Association Report on State of the Market Reveals Industry’s Slowing Financial Progress
A new report published by the Medical Professional Liability Association indicates the medical professional liability (MPL) insurance sector posted a 5.9-percentage-point improvement in its combined ratio last year — down from 108.1% in 2021 to 102.2% in 2022 — demonstrating its best performance since 2017 when the industry reported a combined ratio of 101.7%. The industry still has not generated an underwriting profit since 2013 …

Florida Gives Providers, Payors Right to Refuse Care Due to Conscience
Florida Gov. Ron DeSantis recently signed SB 1580, or the “Protections of Medical Conscience” bill, which permits healthcare providers in the state to refuse services on the grounds that it violates their “sincerely held religious, moral or ethical belief.” The bill similarly applies to healthcare insurers, health plans and “any other entity that pays for, or arranges for payment of, any healthcare service.” The bill specifies that it does not preempt the federal Emergency Medical Treatment & Active Labor Act, which requires hospitals to stabilize any patient with an emergency condition. It further clarifies that the legislation cannot be used to deny care based on a patient’s race, color, religion, sex or national origin. There are no protections for gender identity or sexuality. The law takes effect July 1 ...

Medical Professional Liability Industry Convenes in New Orleans to Address Unique Challenges, Emerging Trends
The Medical Professional Liability (MPL) Association hosted its Annual Conference at the Roosevelt Hotel in New Orleans from May 17 - 19. Meeting in person for only the second time since the COVID-19 pandemic began, the conference carried an optimistic tone as the industry gathered to learn, network and share insights into the most pressing challenges currently facing the industry …

Subscribe today to get this issue (as well as the 2022 Annual Rate Survey at no additional cost).

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The Doctors Company Names Christa Steele, MBA, to Board of Governors

June 5, 2023 by matray

The Doctors Company today announced the appointment of Christa Steele to its board of governors. Steele is a financial and governance executive with decades of corporate leadership experience across a wide range of industries.

Steele currently serves on the board of Tanimura & Antle and is vice chair of the National Association of Corporate Directors (NACD), Northern California Chapter.

“We are pleased to welcome Christa Steele to our Board of Governors,” said Richard E. Anderson, MD, FACP, chairman and CEO of The Doctors Company and TDC Group. “Her leadership experience in both public and private companies, combined with her skills in digital technologies and environmental, social, and governance strategies, will strengthen our ability to serve the entire medical profession.”

Steele is the former CEO of Balco Holdings, Inc., and previously served as president, CEO and board director of Mechanics Bank. Her prior board experience includes Recology as board chair, BrainChip Holdings, OFG Bancorp, Sasser Family Holdings and FIG Partners.

“I am excited to join this group of outstanding leaders from the healthcare and business communities in support of the management team at The Doctors Company and TDC Group,” Steel said. “As a former technology and bank CEO, I believe I am well positioned to assist The Doctors Company and TDC Group as healthcare continues to evolve, and larger technological partners enter the space.”

Steele earned an MBA from the Marshall School of Business at the University of Southern California and holds a Bachelor of Arts degree from California State University, Sacramento. She is an NACD Board Leadership Fellow with Governance Certification. Steele is a Member of the Audit and the Finance & Risk Committees at The Doctors Company.  

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AM Best Affirms Credit Ratings of ProAssurance Corp. and Core Members of ProAssurance Group; Upgrades Credit Ratings of NORCAL Insurance and Its Subsidiaries

May 23, 2023 by matray

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a+” (Excellent) of the core members of ProAssurance Group. Concurrently, AM Best has upgraded the FSR to A (Excellent) from A- (Excellent) and the Long-Term ICRs to “a+” (Excellent) from “a-” (Excellent) of NORCAL Insurance Company (NORCAL) (San Francisco, CA) and its subsidiaries, which are now part of ProAssurance Group. At the same time, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and all existing Long-Term Issue Credit Ratings (Long-Term IR) of ProAssurance Corporation (PRA) (headquartered in Birmingham, AL). All companies are indirect subsidiaries of PRA. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies’ ratings.)

The ratings of ProAssurance Group reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The group’s balance sheet strength assessment continues to reflect the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as the strength of its reserves and quality of investments. The ratings also consider ProAssurance Group’s operating performance, which continues to be adequate as results benefited from the complete reunderwriting of its book of business and its strong rate gains, although loss costs in its medical professional liability (MPL) book of business remain pressured by the impacts of social inflation and the increasing frequency of excess verdicts, as seen in the first quarter of 2023. The ratings also consider the group’s market position as one of the leading MPL insurers in the United States, as well as its diversification across multiple disciplines, geographic areas and in its other lines of business. These ratings also acknowledge the depth and breadth of the group’s ERM programs and policies.

The rating upgrades of NORCAL and its subsidiaries reflect their status as members of ProAssurance Group due to the implicit and explicit support provided by the group following management’s integration efforts since its acquisition of NORCAL in 2021. Also considered is NORCAL and its subsidiaries’ strategic importance to the group, common management, and significant earnings contributions.

The ratings also benefit from the financial flexibility provided by PRA, the ultimate parent. PRA’s financial leverage is modest, with strong interest coverage, and holds a significant amount of cash and short-term investments outside of the insurance operating companies that are available for use without regulatory approval or other restriction. Nevertheless, the group has reported limited surplus growth over the most recent five-year period due to significant payments of dividends to PRA, which the parent has utilized for company stock repurchases and payment of shareholders’ dividends. Management remains committed to maintaining capital at its rated entities at levels commensurate with their ratings.

The stable outlooks for the Long-Term ICRs of ProAssurance Group members reflect the group’s continued strongest level balance sheet strength assessment, supported by effective capital management and financial flexibility afforded by it parent, while ongoing insurance operating initiatives implemented by management are expected to maintain its stable operating performance.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed, with stable outlooks for the following members of ProAssurance Group:

  • ProAssurance Casualty Company

  • ProAssurance Indemnity Company, Inc.

  • ProAssurance Specialty Insurance Company

  • Medmarc Casualty Insurance Company

  • ProAssurance Insurance Company of America

  • ProAssurance American Mutual, A Risk Retention Group

  • Allied Eastern Indemnity Company

  • Eastern Advantage Assurance Company

  • Eastern Alliance Insurance Company

The FSR has been upgraded to A (Excellent) from A- (Excellent) and the Long-Term ICRs to “a+” (Excellent) from “a-” (Excellent) with stable outlooks for the following new members of ProAssurance Group:

  • NORCAL Insurance Company

  • NORCAL Specialty Insurance Company

  • Medicus Insurance Company

  • FD Insurance Company

  • Preferred Physicians Medical Risk Retention Group, a Mutual Insurance Company

The following Long-Term IRs have been affirmed with stable outlooks:

ProAssurance Corporation--“bbb+” (Good) on $250 million 5.30% 10-year senior unsecured notes, due 2023

The following indicative Long-Term IRs under the shelf registration have been affirmed with stable outlooks:

ProAssurance Corporation
-- “bbb+” (Good) on senior unsecured debt
-- “bbb” (Good) on senior subordinated debt
-- “bbb-” (Good) on preferred stock

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