NY Ins L § 5502 (2021)
2021 New York Laws ISC - Insurance Article 55 - Medical Malpractice Insurance Association 5502 - Medical Malpractice Insurance Association.

§  5502.  Medical  malpractice  insurance association. (a) The medical malpractice  insurance  association  is  continued  consisting  of   all insurers  authorized to write and engaged in writing, within this state, on a direct basis, personal injury  liability  insurance  but  excluding assessment  cooperative  fire  insurance  companies transacting business pursuant to article sixty-six of this chapter. Every such insurer  shall be  and  remain  a  member  of  the  association  as  a condition of its authority to continue to transact personal injury liability insurance in this state.  (b) The association shall be a non-profit  unincorporated  association constituting  a legal entity separate and distinct from its members. All funds and reserves of the  association  shall  be  separately  held  and invested. It shall maintain complete accounts of all monies received and all  losses  and  expenses  incurred  in connection with its operations, including investment income  on  policyholder-supplied  funds.  For  the purpose   of   any   contributions   required   by   insurers   to   the property/casualty  insurance   security   fund   pursuant   to   article seventy-six  of  this  chapter,  and  for  the purpose of the protection afforded policyholders by such fund, the association  is  an  authorized insurer.  The  association  shall  include  in  the premiums charged for medical malpractice insurance an amount sufficient to  offset  any  such contributions.  (c)  (1)  The purpose of the association is to provide, for the period July first, nineteen hundred seventy-five through  June  thirtieth,  two thousand  one,  a  market  for medical malpractice insurance pursuant to this article and subject to regulation pursuant to section two  thousand three  hundred  seventeen of this chapter. If, after June thirtieth, two thousand one, the surcharges on premiums  imposed  pursuant  to  section forty,  as  amended,  of  chapter  two  hundred sixty-six of the laws of nineteen hundred  eighty-six,  by  the  superintendent  to  satisfy  any actuarially  projected  deficiency  that  is attributable to the premium levels for policies  providing  coverage  for  physicians  and  surgeons medical  malpractice  for  the  periods  commencing July first, nineteen hundred eighty-five and ending June thirtieth,  two  thousand  one,  are still  in  effect  or  may  still be reasonably imposed, the association shall continue in existence until June  thirtieth  next  following  such time  as  such  surcharges  are  no  longer  imposed or may no longer be reasonably imposed.   ** (2) (A) The association shall, no later  than  December  thirtieth, nineteen  hundred ninety-nine, submit to the superintendent for approval a plan for  the  final  dissolution  of  the  association,  including  a transfer  or  extinguishment of all liabilities of the association and a plan for the servicing of existing  policies  of  the  association.  The dissolution  of the association and cessation of its activities shall be fully accomplished and the association shall be deemed dissolved at such time and under such  conditions  as  the  superintendent  deems  proper; provided,  however,  that  all  policies  of  insurance  written  by the association shall expire or be transferred prior to such dissolution.  (B) In the preparation of a plan for  the  final  dissolution  of  the association,  the  board  of  directors  of  the  association shall: (i) solicit proposed plans for the dissolution of the  association  from  at least  three outside entities; (ii) arrange for an independent actuarial review of the association, its operations, assets and  liabilities;  and (iii)  recommend,  by  a  majority  vote of its board of directors, that proposal which maximizes the value of the association to the state.  The association  shall  thereafter  file  all proposed plans, along with the plan recommended by the board, to the superintendent for approval.  (C) (i) The superintendent shall, by April  thirtieth,  two  thousand, review all proposed plans, along with the recommended plan, filed by the board  of  directors  of the association with the superintendent and may approve a plan of dissolution. The superintendent may determine  to  add provisions  which  may  vary  from those submitted by the association or delete others as proposed by the association or adopt an alternate plan. Any plan of dissolution of the association which provides for  the  sale or  transfer  of  its operations, assets and/or liabilities to a private entity shall do so  net  of  any  appropriated  and  encumbered  amounts required  by  subsection  (c)  of  section  five  thousand  five hundred sixteen, subsection (c) of section five thousand five hundred sixteen-a, subsection  (c)  of  section  five  thousand  five  hundred   sixteen-b, subsection  (c)  of  section  five  thousand  five hundred sixteen-c and subsection (c) of section five thousand five hundred sixteen-e  of  this article  and,  in  the event such plan is approved and implemented, such sections five thousand five hundred sixteen, five thousand five  hundred sixteen-a,  five  thousand  five  hundred  sixteen-b, five thousand five hundred sixteen-c, and five thousand five hundred sixteen-e  are  hereby deemed  repealed. A public hearing shall be held to examine the proposed plan of  dissolution,  the  plans  reviewed,  and  the  superintendent's recommended  plan  of  approval.  Such  public hearing shall be held not later than thirty days prior to the superintendent's  approval  of  that plan which maximizes the value of the association to the state while not impairing or impeding the operation of the voluntary medical malpractice insurance  market or limiting the access to medical malpractice coverage for health care practitioners or facilities insured by the  association. Upon  approval, the superintendent shall certify the estimated amount of funds to be transferred pursuant  to  subsection  (b)  of  section  five thousand  five hundred sixteen-f of this article and shall transmit such certification to the director of the division of the budget.   To assist in making such determination, the superintendent may appoint one  or  more  qualified  disinterested  persons  or   institutions   as consultants  to  advise  on  any matters related to the dissolution. The appointment of a consultant shall be in writing and shall set forth  the duties  and  responsibilities  of  the consultant. The association shall provide access to the superintendent, and any consultants  appointed  by the  superintendent, to its books and records and any information in its possession necessary to make valuations and determinations  required  by this  section.  For the purposes of this section, all expenses and costs associated with such appointment shall be deemed and considered expenses pursuant to section three hundred thirteen of this chapter.  (ii) (I) Any action challenging the validity of or arising out of acts taken or  proposed  to  be  taken  under  this  paragraph  two  of  this subsection  must be commenced within two months after a copy of the plan of final dissolution  of  the  association,  with  the  superintendent's approval  endorsed  thereon,  has  been  filed  in  the  office  of  the superintendent.  (II) In any action arising out of acts taken or proposed to  be  taken under this paragraph two of this subsection, the superintendent shall be entitled  to,  at  any  stage  of the proceedings before final judgment, petition the court to give security for the costs and charges which  may be  incurred by the superintendent in connection with such action and by any other parties defendant in connection therewith  or  for  which  the superintendent  or the association may become liable under this chapter, under  any  contract  or  otherwise  by  law,  to  which  security   the superintendent  shall  have  recourse in such amount as the court having jurisdiction of such action shall determine  upon  termination  of  such action.  The  amount  of  security  may  thereafter from time to time be  increased  or  decreased  in  the  discretion  of   the   court   having jurisdiction  of such action upon showing that the security provided has or may become inadequate or excessive.  (III)  Any  person aggrieved by any act taken or order, regulation, or rule issued pursuant to  this  paragraph  two  of  this  subsection  may petition  for  judicial review of such acts taken or orders, regulations or rules, pursuant to the limitations period prescribed in clause (I) of item (ii) of this subparagraph. The petition shall  be  brought  in  the appellate   division   of  the  supreme  court  in  the  third  judicial department. The jurisdiction of the appellate division  of  the  supreme court  in  the  third  judicial  department  shall  be exclusive and its judgment and order shall be final subject to  review  by  the  court  of appeals in the same manner and form and with the same effect as provided for appeals in a special proceeding. All such proceedings shall be heard and  determined by the appellate division and by the court of appeals as expeditiously as possible and with lawful precedence over other matters. Acts taken or orders, regulations  or  rules  issued  pursuant  to  this section  shall  not be stayed or enjoined except upon application to the appellate division of the supreme court in the third judicial department after notice to the superintendent and to the attorney general and  upon a  showing  that  the petitioner has a substantial likelihood of success and will suffer irreparable harm  if  the  stay  or  injunction  is  not granted.  (IV)  Provided,  however,  that  if  a  determination  by  a  judicial proceeding prevents the final consummation of the determination  by  the superintendent  that  the  association  be dissolved, and if the amounts required to be transferred and deposited from  the  association  to  the miscellaneous  special  revenue  fund  pursuant  to  the requirements of section five thousand five hundred sixteen-f of this article are not  in fact  so  transferred and deposited in the miscellaneous special revenue fund, then the provisions of subsections (a) through (f) of section nine thousand one hundred eleven-c of this chapter shall become operative and the tax imposed by subsections (a) through (e) of such section shall  be imposed. Provided, further, however, that if there is thereafter a final judicial determination that the final consummation of the dissolution of the  association  may  be effectuated, and the full transfer and deposit shall be made to the miscellaneous special revenue fund,  then  in  such event  the amount of the tax imposed and paid pursuant to the provisions of subsections (a) through (e) of  section  nine  thousand  one  hundred eleven-c  of  this  chapter shall be returned to the companies that paid such assessment on a pro rata basis, in a  manner  consistent  with  the procedures set forth in subsections (f) and (g) of section nine thousand one hundred eleven-c of this chapter.   * (D)  Prior  to  July  first, two thousand, the superintendent shall, after a public hearing to be held not less than thirty days before  such promulgation,   promulgate   regulations  prescribing  a  plan  for  the equitable  distribution  to  authorized  medical  malpractice   insurers writing  such  coverage in the state the insureds of the association and health care practitioners and facilities which are otherwise  unable  to secure coverage in the voluntary market following the dissolution of the association.  Such  plan shall provide that upon initial distribution to the voluntary market the insureds of the association receive policies in the voluntary market with provisions and at a rate which are at least as favorable to the insured as those which they would have received if they were issued a renewal policy by the association, provided, however, that subsequent to the initial distribution, the plan shall not  be  required to make available a second layer of excess medical malpractice insurance to   insureds.  Such  plan  shall  also  ensure  that  all  health  care  practitioners or facilities have access to medical malpractice insurance from an authorized insurer pursuant to the provisions of  this  chapter. Such plan may also provide for, and the superintendent may designate, in lieu  of  the  plan  for the equitable distribution of policies from the association  and  the  availability  of   coverages   to   health   care practitioners  and  facilities,  a  single entity or entities to provide such coverages  consistent  with  such  a  plan  if  the  superintendent determines  that  such  entity  or  entities  can  provide the coverages necessary to meet the purposes and objectives of an  equitable  plan  of distribution  were  it  to  have been effectuated. Notice of the hearing required by this subparagraph shall be no less than thirty  days  before the date of the hearing and shall include a summary of the plan proposed by the superintendent.   * NB Effective until July 1, 2023   * (D)  Prior  to  July  first, two thousand, the superintendent shall, after a public hearing to be held not less than thirty days before  such promulgation,   promulgate   regulations  prescribing  a  plan  for  the equitable  distribution  to  authorized  medical  malpractice   insurers writing  such  coverage in the state the insureds of the association and health care practitioners and facilities which are otherwise  unable  to secure coverage in the voluntary market following the dissolution of the association.  Such  plan shall provide that upon initial distribution to the voluntary market the insureds of the association receive policies in the voluntary market with provisions and at a rate which are at least as favorable to the insured as those which they would have received if they were issued a renewal policy by the association. Such  plan  shall  also ensure  that  all health care practitioners or facilities have access to medical malpractice insurance from an authorized insurer pursuant to the provisions of this chapter. Such plan may  also  provide  for,  and  the superintendent  may  designate,  in  lieu  of the plan for the equitable distribution of policies from the association and  the  availability  of coverages  to  health care practitioners and facilities, a single entity or entities to provide such coverages consistent with such a plan if the superintendent determines that such entity or entities can  provide  the coverages  necessary to meet the purposes and objectives of an equitable plan of distribution were it to have been  effectuated.  Notice  of  the hearing required by this clause shall be no less than thirty days before the date of the hearing and shall include a summary of the plan proposed by the superintendent.   * NB Effective July 1, 2023   ** NB  The plan referred to herein is Title 11 NYCRR, Chapter XX, Part 430  (d) Upon dissolution, the association shall  not  resume  underwriting operations    for    physicians,    dentists,   podiatrists,   certified nurse-midwives, certified registered nurse anesthetists or for hospitals respectively, until the  superintendent,  after  consultation  with  the commissioner   of   health,  has  determined  that  medical  malpractice insurance  is  not   readily   available   for   physicians,   dentists, podiatrists,   certified   nurse-midwives,  certified  registered  nurse anesthetists or for hospitals, as the case  may  be,  in  the  voluntary market  and  has approved or promulgated a new plan of operation. If the superintendent determines during such period that insurance  is  readily available    for    physicians,    dentists,    podiatrists,   certified nurse-midwives,  certified  registered   nurse   anesthetists   or   for hospitals,   as   the   case  may  be,  in  the  voluntary  market,  the superintendent shall not authorize its underwriting operations  for  the respective categories.  (e)  The association shall, pursuant to the provisions of this article and the plan of operation with respect to medical malpractice insurance, have the power:  (1)  To  issue,  or  to  cause  to be issued, policies of insurance to physician, dentist and podiatrist applicants subject  to primary  limits specified  in the plan of operation not in excess of one million dollars for each claimant under one policy and three  million  dollars  for  all claimants  under  one  policy  in  any  one year, and excess coverage as provided in  this  paragraph.  Each  applicant   shall  be  entitled  to purchase  a  policy  providing  primary limits not to exceed one million dollars for each claimant and three million dollars for all claimants in any one year. In addition, any applicant insured by the  association  in an  amount   equal  to  or  greater  than  one million dollars for each claimant and three million dollars for all claimants in any one year, or any other applicant covered under a policy or  policies  providing  such primary  levels  of insurance  against liability for medical, dental  or podiatric malpractice that is issued by an authorized insurer, shall  be entitled  to  purchase  a  policy  from the association providing excess coverage of at least one million dollars per claimant and  three million dollars for all claimants in  any  one  year.   The  association  shall, subject  to  the  approval of the superintendent, make available, and if requested by the applicant, provide additional  excess  coverage  in  an amount   requested  by  such  applicant.  With  respect to the coverage required to be made available on and after July first, nineteen  hundred eighty-five  by  this paragraph, the superintendent shall establish  and promulgate rates to be charged for such excess coverage and   additional excess  coverage  and  shall require that the association accept payment for such coverage from the hospital  excess liability pool pursuant to a payment schedule that  is consistent with the receipt of funds  by  such pool  from  the hospital reimbursement system. Rates for excess coverage and  additional  excess  coverage  shall  not   be   subject    to   the stabilization  reserve fund charge established  by section five thousand five hundred nine of this article.  (2) To issue, or cause to be issued, policies of insurance,  including incidental liability coverages, to hospital applicants subject to limits specified  in  the  plan  of  operation with limits not in excess of one million dollars for each  claimant  and  ten  million  dollars  for  all claimants in any one year; provided that policies for coverage in excess of  one  million dollars for each claimant and three million dollars for all claimants in any one year shall be issued only upon the obtaining of reinsurance for such excess coverage for the term of the policy and  the excess coverage shall remain in effect only so long as reinsurance is in effect. The association shall obtain such reinsurance, if available, for coverage  in  excess  of one million dollars for each claimant and three million dollars for all claimants in any one year.  If  the  association fails  to obtain such reinsurance, the superintendent may order it to do so for the term of the policy from sources found by him to be available. The rates charged by the association for coverage  in  excess  of  three million   dollars  shall  not  be  subject  to  prior  approval  by  the superintendent, and shall equal the charges to the association for  such reinsurance.  (3)  To  underwrite  such insurance and to adjust and pay losses or to appoint service companies to perform those functions.  (4) To assume reinsurance from its members.  (5) To cede reinsurance.  (6) To make the lump sum payments provided for in subdivision  (b)  of section  five  thousand  thirty-six of the civil  practice law and rules  and receive the  periodic  payments   due  under  the  annuity  contract provided for therein.