interest, upon the person who signed it, a represented 
party, or both. 
(b) PROCESS; RULES.—Courts shall presume that 
pleadings are filed in good faith. No sanctions under this 
section may be imposed except for good cause, the particu-
lars of which must be stated in the sanction order. The 
term ‘‘groundless’’ means, for purposes of this section, 
having no basis in law or fact and not warranted by good 
faith argument for the extension, modification, or reversal 
of existing law. A general denial does not constitute a vio-
lation of this subsection (a). The amount requested in 
damages, if any, does not constitute a violation of sub-
section (a). 
SEC. 305. REQUIREMENT FOR AFFIDAVIT OF MERIT. 
(a) REQUIRING SUBMISSION WITH COMPLAINT.—No 
medical malpractice liability action may be brought by any 
individual unless, at the time the individual brings the ac-
tion (except as provided in subsection (b)(1)), the indi-
vidual (or the individual’s attorney) submits an affidavit 
declaring that—
(1) the individual (or the individual’s attorney) 
has consulted and reviewed the facts of the action 
with a qualified specialist; 
(2) the individual (or the individual’s attorney) 
has obtained a written report by a qualified spe-
cialist that clearly identifies the individual and that 
includes the specialist’s statement of belief that, 
based on a review of the available medical record 
and other relevant material, there is a reasonable 
and meritorious cause for the filing of the action 
against the defendant; and 
(3) on the basis of the qualified specialist’s re-
view and consultation, that the individual (or the in-
dividual’s attorney) has concluded that there is a 
reasonable and meritorious cause for the filing of the 
action. 
(b) EXTENSION IN CERTAIN INSTANCES.—
(1) IN GENERAL.—Subject to paragraph (2), 
subsection (a) shall not apply with respect to an in-
dividual who brings a medical malpractice liability 
action without submitting an affidavit described in 
such subsection if—
(A) the individual is unable to obtain the 
affidavit before the expiration of the applicable 
statute of limitations; 
(B) as of the time the individual brings the 
action, the individual has been unable to obtain 
adequate medical records or other information 
necessary to prepare the affidavit; or
(C) other good cause exists for failing to 
submit the affidavit. 
(2) DEADLINE
FOR
SUBMISSION
WHERE
EX-
TENSION APPLIES.—In the case of an individual who 
brings an action for which paragraph (1) applies, 
the action shall be dismissed unless the individual 
(or the individual’s attorney) submits the affidavit 
described in subsection (a) not later than—
(A) in the case of an action for which sub-
paragraph (A) of paragraph (1) applies, 90 
days after bringing the action; 
(B) in the case of an action for which sub-
paragraph (B) of paragraph (1) applies, 90 
days after obtaining the information described 
in such subparagraph; or 
(C) in the case of an action for which sub-
paragraph (C) of paragraph (1) applies, 90 
days after the good cause involved ceases to 
exist. 
(c) QUALIFIED
SPECIALIST
DEFINED.—In sub-
section (a), a ‘‘qualified specialist’’ means, with respect 
to a medical malpractice liability action, a health care pro-
fessional who is reasonably believed by the individual 
bringing the action (or the individual’s attorney)—
(1) to be knowledgeable in the relevant issues 
involved in the action, 
(2) to practice (or to have practiced) or to teach 
(or to have taught) in the same area of health care 
or medicine that is at issue in the action, and 
(3) in the case of an action against a physician, 
to be board certified in a specialty relating to that 
area of medicine. 
(d) SANCTIONS FOR SUBMITTING FALSE ALLEGA-
TIONS.—Upon the motion of any party or its own initia-
tive, the court in a medical malpractice liability action may 
impose a sanction on a party or the party’s attorney (or 
both), including a requirement that the party reimburse 
the other party to the action for costs and a reasonable 
attorney’s fee, if an affidavit described in subsection (a) 
is submitted without reasonable cause and is found to be 
untrue. 
(e) CONFIDENTIALITY
OF
SPECIALIST.—Upon a 
showing of good cause by a defendant, the court may as-
certain the identity of a specialist referred to in subsection 
(a) while preserving confidentiality.
TITLE 
IV—MEDICAL 
MAL-
PRACTICE 
INSURANCE 
RE-
FORMS 
SEC. 401. ADVISORY COMMISSION ON MEDICAL MAL-
PRACTICE. 
(a) APPOINTMENT.—
(1) IN GENERAL.—Not later than 90 days after 
the date of the enactment of this Act, the Secretary 
of Health and Human Services, in consultation with 
the Congress, shall appoint an Advisory Commission 
on Medical Malpractice (in this section referred to as 
the ‘‘Commission’’). 
(2) COMPOSITION.—The Commission shall con-
sist of 11 members, appointed without regard to the 
civil service laws. Seven members shall be represent-
atives of health care professional organizations, 2 of 
whom shall be self-employed physicians (allopathic 
or osteopathic). The remaining members shall have 
expertise in health care quality or economics, but 2 
shall have expertise in insurance and at least 1 shall 
be a representative of patients. 
(3) TERMS; QUORUM.—The members of the 
Commission shall serve until submission of the re-
port pursuant to subsection (d), at which time the 
Commission shall terminate. A vacancy arising in
the Commission shall be filled in the same manner 
as the original appointment is made. A majority of 
members shall constitute a quorum, and action shall 
be taken only by a majority vote of those present 
and voting. 
(b) DUTIES.—The Commission shall examine the 
causes of the medical malpractice crisis. As part of such 
examination, the Commission shall study and examine the 
following issues: 
(1) The financial statements and information 
submitted to regulators by insurance companies that 
offer medical malpractice insurance, as well as any 
other information maintained by regulators that may 
be relevant to this issue. 
(2) How reductions in the investment income of 
insurers may be adversely affecting the financial 
outlook of these companies, thus increasing physi-
cian premiums to compensate for any declines. 
(3) The underwriting history of medical mal-
practice insurance to determine whether premiums 
have historically experienced similar increases and 
also determine whether current market conditions 
are in some way unique. 
(4) The competitiveness of markets, particularly 
in those areas experiencing the sharpest premium in-
creases. For example, has the lack of competition in 
the medical malpractice insurance market adversely 
affected physician premiums? 
(5) How malpractice settlements and judgments 
compare to premiums earned for medical malpractice 
lines of insurance. In particular, how incurred but 
not yet reported holdings have affected the reserve 
practices of medical malpractice insurers. 
(6) The effect of current laws (at both the Fed-
eral and State levels) on medical malpractice insur-
ance rates. 
(7) The underlying causes of changes in med-
ical malpractice insurance premiums. 
(c) STAFFING; COMPENSATION.—
(1) STAFFING.—The Secretary of Health and 
Human Services shall furnish to the Commission an 
executive secretary and such secretarial, clerical, and 
other services as may be necessary to conduct its 
business, and may call upon other agencies of the 
Government for statistical data, reports, and other 
information which will assist the Commission in the 
performance of its duties. 
(2) COMPENSATION.—Members of the Commis-
sion, while serving on business of the Commission 
(inclusive of travel time), shall be entitled to receive
the daily equivalent of the annual rate of basic max-
imum rate of pay payable from time to time under 
section 5376 of title 5, United States Code, for each 
day and, while so serving away from their homes or 
regular places of business, may be allowed travel ex-
penses, including per diem in lieu of subsistence, in 
the same manner as provided in section 5703 of title 
5, United States Code, for individuals in the Govern-
ment employed intermittently.
(d) REPORT.—Not later than one year after the date 
the Commission is appointed, the Commission shall submit 
to Congress a report that provides specific legislative 
changes that would address the problems the Commission 
found, including a proposal for the reduction of medical 
malpractice insurance rates. 
(e) RESPONSE TO REPORT.—The appropriate com-
mittees of the House of Representatives and the Senate 
shall hold hearings on the Commission’s report and con-
sider legislation to address these problems.
SEC. 402. LIMITATION ON RATE OF INCREASE IN MEDICAL 
MALPRACTICE INSURANCE RATES. 
(a) DECLARATION
OF INTERSTATE COMMERCE.—
Congress finds that medical malpractice insurance cov-
erage affects interstate commerce.
(b) LIMITATION ON RATE OF INCREASE.—Notwith-
standing any other provision of law, effective on the date 
of the enactment of this Act, the rates charged for medical 
malpractice insurance coverage during the period begin-
ning on the day after the date of the enactment of this 
Act and ending on the date that is 6 months after the 
date the Commission files its report under section 401(d) 
shall not exceed the rates in effect for such coverage as 
of January 1, 2002 (or, in the case of coverage not offered 
as of such date, such comparable rate as is approved by 
the Secretary of Health and Human Services) by more on 
an annual than the annual rate of increase in the con-
sumer price index for all urban consumers plus 2 percent-
age points. 
(c) EXCEPTION.—Any entity which can demonstrate 
to the Secretary of Health and Human Services that 
under the terms of subsection (b) it would be unable to 
earn a fair rate of return shall be exempt from the limita-
tion in rates under such subsection. 
SEC. 403. WITHDRAWAL FROM MEDICAL MALPRACTICE IN-
SURANCE MARKET. 
(a) LIMITATION.—Any entity that discontinues writ-
ing medical malpractice insurance coverage in a State 
shall also discontinue the writing of any other line of in-
surance in such State.
(b) ORDERLY WITHDRAWAL.—If an entity discon-
tinues writing medical malpractice insurance coverage in 
a State, it shall file with the insurance commissioner of 
that State a plan of orderly withdrawal, pursuant to which 
the insurer shall make such arrangements as are nec-
essary to ensure that any person insured by the entity 
shall continue to be insured until the end of the term of 
the policy held by such person. 
(c) SUNSET.—Subsections (a) and (b) shall only 
apply during the 3-year period beginning on the date of 
the enactment of this Act. 
SEC. 404. GUARANTEED RENEWABILITY OF COVERAGE. 
(a) IN GENERAL.—Subject to subsection (b), all med-
ical malpractice insurance coverage shall be guaranteed re-
newable. Rates for such coverage shall increase by no more 
than the rate of increase in the health care component 
of the consumer price index for all urban consumers. 
(b) EXCEPTIONS.—
(1) RATE FREEZE.—Subsection (a) shall not af-
fect or supersede the application of section 402. 
(2) LIMITATION.—An entity is not required to 
renew medical malpractice insurance coverage in the 
case of fraud, excessive claims on which indemnity 
has been paid, or nonpayment of premiums by the 
insured health care provider.
SEC. 405. GUARANTEED COVERAGE FOR CERTAIN HEALTH 
CARE PROVIDERS. 
Any entity that is licensed to offer medical mal-
practice insurance coverage shall offer medical malpractice 
insurance coverage to any health care provider that has 
zero medical malpractice claims (as defined in section 
301(10)) on which indemnity has been paid during the 
previous 3 years. 
SEC. 406. MEDICAL MALPRACTICE INSURANCE DISCLO-
SURE. 
(a) IN GENERAL.—Annually on or before March 1, 
every insurer writing medical malpractice insurance cov-
erage to a health care provider shall file with the Secretary 
of Health and Human Services a copy of the Annual 
Statement it files with the Department of Insurance in 
the State in which it is domiciled. Every such insurer shall 
also file the following information with the Secretary: 
(1) INFORMATION ON CLOSED CLAIMS.—
(A) The number of new claims reported 
during the preceding year, and the total 
amounts reserved for such claims and for allo-
cated loss adjustment expenses in connection 
with such claims. 
(B) The number of claims closed during 
the preceding year, and the amount paid on 
such claims, broken out as follows:
(i) The number of claims closed each 
year with payment, and the amount paid 
on such claims and on allocated loss ad-
justment expenses in connection with such 
claims. 
(ii) The number of claims closed each 
year without payment, and the amount of 
allocated loss adjustment expenses in con-
nection with such claims. 
(2) INFORMATION REGARDING VERDICTS, PAY-
MENT, AND SEVERITY OF INJURY IN CONNECTION 
WITH VERDICTS.—For each verdict rendered against 
the insurer for more than $100,000, the amount of 
the verdict, the amount paid to the plaintiff, and the 
category of injury suffered by the plaintiff, cat-
egorized as follows: 
(A) TEMPORARY INJURY.—
(i) Emotional distress. 
(ii) lacerations, contusions, minor 
scars, and rash not resulting in permanent 
scarring or disfigurement. 
(iii) Non-life-threatening infections. 
(iv) Falls not resulting in fractures. 
(v) Medication errors. 
(B) PERMANENT INJURY.—
(i) Major injury, including loss of one 
or more fingers, organs, limbs, deafness, 
loss of sight, loss of fertility, permanent 
scarring or disfigurement, and brain dam-
age. 
(ii) Catastrophic injury requiring life-
long care or having a fatal prognosis. 
(C) DEATH.—Death. 
(3) INFORMATION ON RATE CHANGES.—Each 
rate change implemented during the preceding five-
year period, by state and by medical specialty. 
(4) INFORMATION ON PREMIUMS AND LOSSES 
BY MEDICAL SPECIALTY.—
(A) Written premiums and paid losses for 
the preceding year, and earned premiums and 
incurred losses for the preceding year, broken 
out by medical specialty. 
(B) Number of providers insured in each 
medical specialty. 
(5) INFORMATION ON PREMIUMS AND LOSSES 
BY EXPERIENCE OF THE INSURED.—
(A) Written premiums and paid losses for 
the preceding year, and earned premiums and 
incurred losses for the preceding year, broken 
out as follows:
(i) All insureds with no incidents 
within the preceding five-year period. 
(ii) All insureds with one incident 
within the preceding five-year period. 
(iii) All insureds with two incidents 
within the preceding five-year period. 
(iv) All insureds with three or more 
incidents within the preceding five-year pe-
riod. 
(B) Number of providers insured—
(i) with no incidents within the pre-
ceding five-year period; 
(ii) with one incident within the pre-
ceding five-year period; 
(iii) with two incidents within the pre-
ceding five-year period; or 
(iv) with three or more incidents with-
in the preceding five-year period. 
(6) INFORMATION ON THE PERFORMANCE OF 
THE INVESTMENTS OF THE INSURER.—The value of 
the investments held in the investment portfolio of 
the insurer as of December 31 of the preceding cal-
endar year, and the rate of return earned on such 
investments, broken down by category of investment, 
as follows:
(A) United States government bonds. 
(B) Bonds exempt from tax by the United 
States. 
(C) Other bonds (unaffiliated). 
(D) bonds of affiliates. 
(E) Preferred stocks (unaffiliated), 
(F) Preferred stocks of affiliates. 
(G) Common stock (unaffiliated). 
(H) Common stock of affiliates. 
(I) Mortgage loans. 
(J) Real estate. 
(K) Any additional categories of invest-
ments specified by the Secretary. 
(b) ANNUAL REPORT.—The Secretary shall submit 
to Congress by July 1 of each year a report on the per-
formance of the medical malpractice insurance market 
during the preceding year. Such report shall be based on 
the information submitted pursuant to this section. 
(c) RULES.—The Secretary shall promulgate rules to 
carry out the purposes of this section. 
(d) INSURER DEFINED.—For purposes of this sec-
tion, the term ‘‘insurer’’ includes every insurance company 
authorized to transact insurance business in any State, 
every risk retention group, every insurance company
issuing insurance to or through a purchasing group, and 
any other person providing insurance coverage. 
SEC. 407. MEDICAL MALPRACTICE INSURANCE PRICE COM-
PARISON. 
(a) INTERNET SITE.—Not later than July 1, 2003, 
and after consultation with the medical malpractice insur-
ance industry, the Secretary of Health and Human Serv-
ices shall establish an interactive, secure internet site (in 
this section referred to as the ‘‘internet site’’) which shall 
enable any health care provider licensed in the United 
States to obtain a quote from each medical malpractice 
insurer licensed to write the type of coverage sought by 
the provider. 
(b) ONLINE FORMS.—
(1) IN GENERAL.—The internet site shall en-
able health care providers to complete an online 
form that shall capture a comprehensive set of infor-
mation sufficient to generate a quote for each in-
surer. The Secretary shall develop transmission soft-
ware components which allow such information to be 
formatted for delivery to each medical malpractice 
insurer based on the requirements of the computer 
system of the insurer. 
(2) PROTECTION OF CONFIDENTIALITY OF IN-
FORMATION
DISCLOSED.—All information provided
by a health care provider for purposes of generating 
a quote through the internet site shall be used only 
for that purpose and shall not be used in connection 
with the National Physician’s Data Bank or for any 
other purposes, including in connection with any 
legal action. 
(c) INTEGRATION OF RATING CRITERIA.—The Sec-
retary shall integrate the rating criteria of each insurer 
into its online form after consultation with each insurer. 
The Secretary shall integrate such criteria using one of 
the following methods: 
(1) Developing a customized interface with the 
insurer’s own rating engine. 
(2) Accessing a third-party rating engine of the 
insurer’s choice. 
(3) Loading the carrier’s rating information 
into a rating engine operated by the Secretary. 
(4) Any other method agreed on between the 
Secretary and the insurer. 
(d) PRESENTATION OF QUOTES.—After a health care 
provider has answered all the questions appearing on the 
online form, such provider will be presented with quotes 
from each medical malpractice insurer licensed to write 
the coverage requested by the provider.
(e) ACCURACY OF QUOTES.—Quotes provided at the 
internet site shall at all times be accurate. Whenever any 
insurer changes its rates, such rate changes shall be imple-
mented at the internet site by the Secretary, in consulta-
tion with the insurer, as soon as practicable, but in no 
event later than 10 days after such changes take effect. 
During any period during which an insurer has changed 
its rates but the Secretary has not yet implemented such 
changed rates on the internet site, quotes for that insurer 
shall not be obtainable at the internet site. 
(f) USER-FRIENDLY
FEATURES.—The Secretary 
shall design the internet site to incorporate user-friendly 
formats and self-help guidance materials, and shall de-
velop a user-friendly internet user-interface. 
(g) CONTACT INFORMATION.—The internet site shall 
also provide contact information, including address and 
telephone number, for each medical malpractice insurer 
for which a provider obtains a quote at the site. 
(h) REPORT.—Not later than December 31, 2004, 
the Secretary shall submit a report to the Congress on 
the development, implementation and effects of the inter-
net site. Such report shall be based on—
(1) the Secretary’s consultation with health 
care providers, medical malpractice insurers, State
insurance commissioners, and other interested par-
ties; and 
(2) the Secretary’s analysis of other informa-
tion available to the Secretary. 
The report shall describe the Secretary’s views concerning 
the extent to which this section has contributed to increas-
ing the availability of medical malpractice insurance cov-
erage, and the effect this section has had on the cost of 
medical malpractice insurance coverage.
TITLE V—TAX-RELATED 
PROVISIONS
SEC. 501. DEDUCTION FOR PREMIUMS FOR MEDICAL LI-
ABILITY INSURANCE FOR HIGH RISK SPE-
CIALTIES. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
itemized deductions for individuals and corporations) is 
amended by adding at the end the following new section: 
‘‘SEC. 199. DEDUCTION FOR PREMIUMS FOR MEDICAL LI-
ABILITY INSURANCE FOR HIGH RISK SPE-
CIALTIES. 
‘‘(a) IN GENERAL.—In the case of a physician whose 
medical practice is in a high risk specialty, there shall be 
allowed as a deduction from gross income for the taxable 
year an amount equal to 125 percent of the aggregate pre-
miums paid for medical liability insurance with respect to 
such specialty for such taxable year. 
‘‘(b) HIGH RISK SPECIALTY.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, a specialty is a high risk specialty for a taxable 
year if, for the calendar year in which the taxable 
year begins, the average premiums for medical liabil-
ity insurance with respect to such specialty are equal 
to or greater than 67 percent of the average pre-
miums for medical liability insurance for all special-
ties for such calendar year, based on a weighted av-
erage of the number of physicians practicing in each 
specialty. 
‘‘(2) SPECIALTIES TAKEN INTO ACCOUNT.—For 
purposes of paragraph (1), the Secretary, in con-
sultation with the Secretary of Health and Human 
Services and appropriate professional organizations, 
shall determine the specialties to be taken into ac-
count for purposes of paragraph (1) and shall con-
sider those specialities for which a payment may be 
made under section 1886(h) of the Social Security 
Act. In making such determination, the Secretary 
shall provide for an appropriate treatment of sub-
specialties.
‘‘(3) PUBLICATION OF SPECIALITIES.—The Sec-
retary shall publish the high risk specialities for a 
calendar year before the beginning of the calendar 
year. 
‘‘(c) PHYSICIAN.—The term ‘physician’ has the 
meaning given such term by section 1861(r)(1) of the So-
cial Security Act. 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion—
‘‘(1) MEDICAL
PRACTICE
SPANNING
MORE 
THAN 1 SPECIALTY.—In the case of a medical prac-
tice a portion of which is in a high risk specialty, the 
portion of the premiums paid for medical liability in-
surance that may be taken into account under sub-
section (a) shall be determined under regulations 
prescribed by the Secretary. 
‘‘(2) GROUP
PRACTICE, ETC.—Under regula-
tions prescribed by the Secretary, the deduction al-
lowed by this section shall be allowed in case of a 
group practice or health care facility which is a C 
corporation in the manner prescribed by the Sec-
retary. 
‘‘(3) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion shall be allowed under any other provision of
this chapter for any amount for which a deduction 
is allowed under this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part VI of subchapter B of chapter 1 of such Code 
is amended by adding at the end the following new item:
‘‘Sec. 199. Deduction for premiums for medical liability insurance 
for high risk specialties.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 502. DEDUCTION FOR PREMIUMS FOR MEDICAL LI-
ABILITY INSURANCE FOR PRACTICES SERV-
ING 
MEDICALLY 
UNDERSERVED 
COMMU-
NITIES. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
itemized deductions for individuals and corporations) is 
amended by adding at the end the following new section: 
‘‘SEC. 200. DEDUCTION FOR PREMIUMS FOR MEDICAL LI-
ABILITY INSURANCE FOR PRACTICES SERV-
ING 
MEDICALLY 
UNDERSERVED 
COMMU-
NITIES. 
‘‘(a) IN GENERAL.—In the case of a physician whose 
medical practice serves medically underserved commu-
nities, there shall be allowed as a deduction from gross 
income for the taxable year an amount equal to 125 per-
cent of the aggregate premiums paid for medical liability 
insurance with respect to such practice for such taxable 
year. 
‘‘(b) MEDICALLY UNDERSERVED COMMUNITY.—For 
purposes of this section, the term ‘medically underserved 
community’ means a medically underserved community 
(as defined by section 799B of the Public Health Service 
Act) that has been designated under one of the categories 
specified in such section for a calendar year in which the 
taxable year of the physician begins. 
‘‘(c) PHYSICIAN.—The term ‘physician’ has the 
meaning given such term by section 1861(r)(1) of the So-
cial Security Act. 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion—
‘‘(1) MEDICAL
PRACTICE
SPANNING
MORE 
THAN 1 COMMUNITY.—In the case of a medical prac-
tice a portion of which serves a medically under-
served community, the portion of the premiums paid 
for medical liability insurance that may be taken 
into account under subsection (a) shall be deter-
mined under regulations prescribed by the Secretary. 
‘‘(2) GROUP
PRACTICE, ETC.—Under regula-
tions prescribed by the Secretary, the deduction al-
lowed by this section shall be allowed in case of a
group practice or health care facility which is a C 
corporation in the manner prescribed by the Sec-
retary. 
‘‘(3) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion shall be allowed under any other provision of 
this chapter for any amount for which a deduction 
is allowed under this section. 
‘‘(4) ELECTION.—A physician may elect wheth-
er to take a deduction under this section or under 
section 199.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part VI of subchapter B of chapter 1 of such Code 
is amended by adding at the end the following new item:
‘‘Sec. 200. Deduction for premiums for medical liability insurance 
for practices serving medically underserved commu-
nities.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003.
TITLE VI—ADDITIONAL 
PROVISIONS 
SEC. 601. STATE CONSIDERATION OF ADDITIONAL AND AL-
TERNATIVE METHODS. 
It is the sense of Congress that the States, as primary 
regulators of the insurance industry, should consider the 
following additional and alternative methods for dealing
with the rates and availability of medical malpractice in-
surance: 
(1) Using claims history as a rating factor in 
establishing premiums and requiring each medical 
malpractice insurer to offer its lowest rate to all doc-
tors in a State meeting its eligibility criteria for such 
rate. 
(2) Limiting the percentage of an insurer’s as-
sets that can be invested in stocks or other high-risk 
investments and preventing insurers from seeking to 
recoup losses on their investments by raising rates. 
(3) Requiring prior approval by the state insur-
ance regulators of any medical malpractice insurance 
rates and allowing health care providers to intervene 
in proceedings regarding rate changes. 
(4) Establishing new medical malpractice insur-
ance entities, using loans authorized by States, simi-
lar to the model (enacted in Missouri) that estab-
lished a new workers compensation insurer. 
(5) Setting up a fund to address birth-related 
neurological injury compensation.
SEC. 602. MANDATING EQUAL TREATMENT BETWEEN TRA-
DITIONAL INSURERS AND RISK RETENTION 
GROUPS, 
INCLUDING 
MEDICAL 
MAL-
PRACTICE RISK RETENTION GROUPS. 
(a) RISK RETENTION GROUPS.—Section 3 of the Li-
ability Risk Retention Act of 1986 (15 U.S.C. 3902) is 
amended—
(1) in subsection (a)(1), in the matter before 
subparagraph (A), by inserting ‘‘or have a disparate 
impact on,’’ after ‘‘directly or indirectly’’; and 
(2) in subsection (c), by inserting ‘‘or has a dis-
parate impact on’’ after ‘‘which discriminates 
against’’. 
(b) PURCHASING GROUPS.—Section 4 of such Act 
(15 U.S.C. 3903) is amended—
(1) in subsection (a)—
(A) by striking ‘‘or’’ at the end of para-
graph (7); 
(B) by redesignating paragraph (8) as 
paragraph (9); and 
(C) by inserting after paragraph (7) the 
following new paragraph: 
‘‘(8) have a disparate impact on a purchasing 
group; or’’; and
(2) in subsection (c), by inserting ‘‘or has a dis-
parate impact on’’ after ‘‘which discriminates 
against’’.
Æ