Doby Consulting RM
Insurance companies or insuring entities usually go into runoff for two (2) reasons: 1) a line or lines of business become unprofitable or 2) organic change in the company's line of business.
The company usually has three options 1) outright sale of the book of business; 2) transfer of the book; or 3) contracting with a third party to administer the runoff of exposures or liabilities to conclusion (outsourcing).
The reinsurer or insurer face the daunting challenge of unpredictable exposures based on expansive jurisdictional interpretation of policy forms such as in the California Montrose Chemical case which essentially allowed the manifestation of one incident to trigger coverage under successor policies not anticipated by underwriters. Our runoff portfolio acquisition and claims management focus involves school districts, independent professional associations, construction entities, and an assortment of specialty line/human resource and assigned risk or claims-made exposures.
The Medical Injury Compensation Reform Act of 1975 (MICRA), California faced a medical malpractice insurance crisis. MICRA places a $250,000 cap on non-economic damages (i.e. pain and suffering) only and did not cap damages for lost wages, medical bills, among other quantifiable factors. MICRA also places a cap on the plaintiff attorney fees. That said, there have been challenges and proposed revisions which may cause the cap to increase which means proactive risk management and claims administration may be pivotal to management of cost. Claims-made policies are the most common policy type in California and have a maximum maturation length of six years.
Claims-made coverage provides coverage for claims that arise while the policy is in effect if the insured had coverage at the time of the incident. The typical limits of liability in this state are $1,000,000 per occurrence with a $3,000,000 aggregate limit. Most health care providers require their doctors to carry sufficient limits of liability.
There are (3) three types of malpractice insurance carriers in the state (Surplus Lines, Admitted, and Risk Retention Groups) all have a loss sensitive claims component we can help you navigate even if you already have insurance. DCRM believes that all professional liability exposures, whether as a lawyer or a physician, poses more than economic loss but also brand and risk profile loss . Your insurance companies primary concern is your economic loss or their economic loss; However, the ultimate cost is to your reputation and your ability to gain cost-effective insurance coverage in the future. We can help mitigate this exposure while working seamlessly with your insurer to balance these interest as your select risk management consultant.