New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter V - Rates And Rating Organizations › Subchapter B - Commercial And Industrial Risks › Part 152 - Physicians And Surgeons Professional Insurance Merit Rating Plan › Section 152.1 - Preamble

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Section 2343 (d)  of the Insurance
				  Law requires that the Insurance Department promulgate a regulation establishing
				  a Physicians and Surgeons Professional Liability Merit Rating Plan to take
				  effect on January 1, 1986. A merit rating plan is a system of rules for
				  imposing rate surcharges or credits, within the existing class and territory
				  matrix, based upon an individual's past history of claims or disciplinary
				  actions. The plan is intended to produce a more accurate individual premium by
				  using past claim history to predict the likelihood of future claims.
(b) At the time this regulation was first
				  promulgated some insurers had a formal merit rating plan, while others imposed
				  surcharges and credits on an ad hoc judgmental basis. The department believed
				  it was in the best interests of insurers, physicians, and the public to
				  maintain stability in the rating system by requiring all insured physicians to
				  be experience-rated under the same set of criteria. A physician's merit rating
				  plan was established by section
				  152.3 
				  of this Part and all insurers were required to utilize that plan, unless the
				  superintendent approved the use of an alternative plan pursuant to section
				  152.4  of this
				  Part. The plan, which applies to all claims-made and occurrence policies, is
				  intended to be revenue-neutral: i.e., any additional funds generated by
				  surcharges must be offset by a rate discount factor that is applied to the base
				  rates: over the long term and for all insurers within the entire system. After
				  reviewing the use of the plan established by the Insurance Department and
				  approved alternative merit rating plans, the superintendent has determined that
				  the use of alternative merit rating plans may be expanded and that insurers
				  need not be restricted to the use of the plan established in this
				  Part.
(c) Section 2343 (e)  of the Insurance
				  Law provides that the superintendent may approve an appropriate premium
				  reduction for an insured physician who successfully completes a risk management
				  course. Standards for the risk management course must be prescribed by the
				  superintendent by regulation, and the course must be approved by the
				  superintendent.
(d) The
				  superintendent has determined that a premium credit as hereinafter permitted
				  may be appropriate for all physicians who successfully complete an approved
				  risk management program meeting the standards contained in section
				  152.6 
				  of this Part (qualified risk management program).
(e) Section 42 of part A of chapter 1 of the
				  Laws of 2002, as amended by section 16 of part J of chapter 82 of the Laws of
				  2002 and chapter 420 of the Laws of 2005, requires all physicians, surgeons and
				  dentists participating in the Excess Medical Malpractice Insurance Program
				  established by the Legislature in 1986 to participate in a proactive risk
				  management program. Section 42 authorizes the superintendent to promulgate
				  regulations that provide for the establishment and administration of proactive
				  risk management programs.