Section 627.912(7) authorizes the Office to monitor losses and claims development in the Florida medical malpractice insurance market by establishment of an open claims database. This rule establishes such a database.

OIR Insurance Regulation

RULE NO.: RULE TITLE:

69O-171-009 Medical Malpractice Insurance Open Claims Reporting

PURPOSE, EFFECT, AND SUMMARY: Section 627.912(7) authorizes the Office to monitor losses and claims development in the Florida medical malpractice insurance market by establishment of an open claims database. This rule establishes such a database.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS:No SERC has been prepared.

Any person who wishes to provide information regarding the statement of estimated regulatory costs, or to provide a proposal for a lower cost regulatory alternative, must do so in writing within 21 days of this notice.

SPECIFIC AUTHORITY:

LAW IMPLEMENTED: 627.912(7) FS.

IF REQUESTED IN WRITING WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: March 21, 2006, 9:30 a.m.

PLACE: 116142143 Larson Building, 200 East Gaines Street, Tallahassee, Florida.

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this program, please advise the Office at least 5 calendar days before the program by contacting the person listed above.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS : Claude Mueller, Property and Casualty Financial Oversight, Office of Insurance Regulation, E-mail [e-mail].

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69O-171.009 Medical Malpractice Insurance Open Claims Reporting.

(1) Each insurer transacting medical malpractice insurance in this state shall file with the Office, on an annual basis, the information required by this rule. The information shall be filed electronically on or before March 1 for the immediately preceding calendar year to the Office using the “Professional Liability Claims Reporting (“PLCR”) located at https://apps.fldfs.com/plcr, Form OIR-A1-1672 (1-06). The PLCR is incorporated and adopted by reference.

(2) Each insurer shall submit the following information in aggregate for all claims-made medical malpractice policies written in Florida. Information for direct, assumed, and ceded business shall be reported separately.

(a) Number of open claims for each year;

(b) Number of closed claims for each year;

(c)1. Direct premiums earned,

2. Assumed premiums earned, and

3. Ceded premiums earned for each year;

(d)1. Direct loss payments,

2. Assumed loss payments, and

3. Ceded loss payments for each year;

(e)1. Direct allocated loss adjustment expense payments and defense and cost containment expense payments,

2. Assumed allocated loss adjustment expense payments and defense and cost containment expense payments, and

3. Ceded allocated loss adjustment expense payments and defense and cost containment expense payments for each year;

(f)1. Direct case losses unpaid,

2. Assumed case losses unpaid, and

3. Ceded case losses unpaid for each year;

(g)1. Direct bulk losses unpaid,

2. Assumed bulk losses unpaid, and

3. Ceded bulk losses unpaid for each year;

(h)1. Direct incurred but not reported unpaid,

2. Assumed incurred but not reported unpaid, and

3. Ceded incurred but not reported unpaid for each year;

(i)1. Direct case allocated loss adjustment expense unpaid and case defense and cost containment expense unpaid,

2. Assumed case allocated loss adjustment expense unpaid and case defense and cost containment expense unpaid, and

3. Ceded case allocated loss adjustment expense unpaid and case defense and cost containment expense unpaid for each year;

(j)1. Direct bulk allocated loss adjustment expense unpaid and bulk defense and cost containment expense unpaid,

2. Assumed bulk allocated loss adjustment expense unpaid and bulk defense and cost containment expense unpaid, and

3. Ceded bulk allocated loss adjustment expense unpaid and bulk defense and cost containment expense unpaid for each year;

(k)1. Direct incurred but not reported allocated loss adjustment expense unpaid and incurred but not reported defense and cost containment expense unpaid,

2. Assumed incurred but not reported allocated loss adjustment expense unpaid and incurred but not reported defense and cost containment expense unpaid, and

3. Ceded incurred but not reported allocated loss adjustment expense unpaid and incurred but not reported defense and cost containment expense unpaid for each year.

(3) Each insurer shall submit the following information in aggregate for all occurrence medical malpractice policies written in Florida. Information for direct, assumed, and ceded shall be reported separately:

(a) Number of open claims for each year;

(b) Number of closed claims for each year;

(c)1. Direct premiums earned,

2. Assumed premiums earned, and

3. Ceded premiums earned for each year;

(d)1. Direct loss payments,

2. Assumed loss payments, and

3. Ceded loss payments for each year;

(e)1. Direct allocated loss adjustment expense payments and defense and cost containment expense payments,

2. Assumed allocated loss adjustment expense payments and defense and cost containment expense payments, and

3. Ceded allocated loss adjustment expense payments and defense and cost containment expense payments for each year;

(f)1. Direct case losses unpaid,

2. Assumed case losses unpaid, and

3. Ceded case losses unpaid for each year;

(g)1. Direct bulk losses unpaid,

2. Assumed bulk losses unpaid, and

3. Ceded bulk losses unpaid for each year;

(h)1. Direct incurred but not reported unpaid,

2. Assumed incurred but not reported unpaid, and

3. Ceded incurred but not reported unpaid for each year;

(i)1. Direct case allocated loss adjustment expense unpaid and case defense and cost containment expense unpaid,

2. Assumed case allocated loss adjustment expense unpaid and case defense and cost containment expense unpaid, and

3. Ceded case allocated loss adjustment expense unpaid and case defense and cost containment expense unpaid for each year;

(j)1. Direct bulk allocated loss adjustment expense unpaid and bulk defense and cost containment expense unpaid,

2. Assumed bulk allocated loss adjustment expense unpaid and bulk defense and cost containment expense unpaid, and

3. Ceded bulk allocated loss adjustment expense unpaid and bulk defense and cost containment expense unpaid for each year;

(k)1. Direct incurred but not reported allocated loss adjustment expense unpaid and incurred but not reported defense and cost containment expense unpaid,

2. Assumed incurred but not reported allocated loss adjustment expense unpaid and incurred but not reported defense and cost containment expense unpaid, and

3. Ceded incurred but not reported allocated loss adjustment expense unpaid and incurred but not reported defense and cost containment expense unpaid for each year.

(4) Reporting Instructions.

(a) Cumulative historical data by year for the immediately preceding 10 years and an aggregate amount of the total change for all other years (“prior”) shall be reported. The “prior year” entry shall reflect only amounts paid, received or incurred in the current year or remaining reserved at its end. Loss payments shall be reported net of salvage and subrogation received.

(b) Earned premium shall be reported on a calendar-year basis. Losses incurred shall be reported under the year in which the event occurred that triggered coverage under the contract. This may be a date of accident (occurrence policy), a date of report (claims-made policy) or a policy issue date (tail policy).

(c) Claims-made earned premiums shall include earned premiums arising from any policy where the predominant exposure is claims-made, but claims-made earned premiums shall not include “tail” earned premiums. “Tail” earned premiums applicable to a claims-made insurance program, along with the claims they cover, are to be included in the occurrence part for the respective line.

(d) The following shall be used in accounting for claims-made losses:

1. For losses attributable to claims-made (but not “tail” forms), the incurred date shall be the report date.

2. Losses shall be booked to the report year that is consistent with the report year definition contained in the policy.

(e) Losses incurred on tail policies must be assigned to the year in which the policy was issued and are to be included in the occurrence data for the respective line.

(f) For reporting items that cover both allocated loss adjustment expense and defense and cost containment, note that new accounting directions for handling loss adjustment expenses in the Property and Casualty Annual Statement were adopted by the National Association of Insurance Commissioners effective January 1, 1998. Prior to January 1, 1998, loss adjustment expenses were split between “allocated loss adjustment expenses” and “unallocated loss adjustment expenses”. The new directions split the loss adjustment expenses between “Defense and Cost Containment” and “Adjusting and Other”. Most of the expenses that formerly fell within “allocated loss adjustment expenses” now fall within “Defense and Cost Containment”. Insurers shall comply with this direction from the National Association of Insurance Commissioners. Each reporting entity shall report each calendar year portion of each accident year consistent with how that portion was reported in the entity’s most recent annual statement Schedule P. For example, if the accident year 1996 paid defense and cost containment in the entity’s most recent Schedule P consists of accident year 1996 allocated loss adjustment expenses paid during 1996 and 1997, and accident year 1996 defense and cost containment paid in 1998 and later years, the accident year defense and cost containment submitted with this form should be computed the same way. Entities that do not prepare a Schedule P or similar schedule shall report defense and cost containment for all portions of all years.

(g) If the company has data that is not available by individual claim, this data shall be reported separately via footnote disclosure. The method of disclosure shall be consistent with the reporting contained within the company’s NAIC annual statement. An example of such information might be an aggregate excess of loss contract containing large deductibles that do not define individual claimants or a policy issued to a hospital organization insuring multiple locations.

(h) Many insurers have a pooling arrangement with affiliated companies, approved by the domiciliary commissioner, in which the business written is reallocated among the affiliated companies according to a specified percentage. Pooled business shall be reported as follows:

1. The premiums and losses are to be reported in the claims data after such pooling arrangements, not before.

2. In reporting pooled premiums and losses, the direct business results (prior to both pooling and reinsurance) shall first be allocated to the pool participants as direct premiums and losses. Then the reinsurance ceded to companies outside the pool shall also be allocated among the pool members. The transfer of premiums or losses between companies through the pooling mechanism shall not be reported as reinsurance.

3. If ceded reinsurance applies after the pool, i.e., the pooling inures to the benefit of the reinsurer, the ceded reinsurance is not to be allocated among the pool members.

Specific Authority 627.912(7) FS., 624.308(1) FS. Law Implemented 627.912(7) FS. History–New __________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Claude Mueller, Director, Property and Casualty Financial Oversight, Office of Insurance Regulation.

NAME OF SUPERVISOR OR PERSON WHO APPROVED THE PROPOSED RULE: Tom Streukens, Deputy Commissioner, Office of Insurance Regulation.

DATE PROPOSED RULERULESRULE CHAPTER APPROVED BY THE AGENCY HEAD: January 24, 2006.

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FLORIDA ADMINISTRATIVE WEEKLY: September 19, 2003 and August 26, 2005.

 

 

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