New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Gregory V. Serio
Superintendent

This Office of General Counsel issued the following opinion on April 19, 2004, representing the position of the New York State Insurance Department.

Re: Underlying Individual Policy & New York Statutory Excess Medical Malpractice Insurance Coverage

Question Presented:

Under the facts presented below, may an eligible physician or dentist, who seeks New York statutory excess medical malpractice insurance coverage from the New York State hospital excess liability pool, be covered by an underlying group policy of primary medical malpractice insurance?

Conclusion:

No. An eligible physician, who is covered by the underlying policy described below, would not qualify for New York statutory excess medical malpractice insurance from the New York State hospital excess liability pool because such physician is not: (1) covered by an underlying individual policy of primary medical malpractice insurance, or (2) endorsed as an additional insured under a hospital professional liability policy, which is offered through a voluntary attending physician program previously permitted by the Superintendent of Insurance.

However, please note that an eligible physician or dentist may qualify for statutory excess medical malpractice insurance coverage if he or she is a member of a purchasing group, which has been issued a Department approved group policy of primary medical malpractice insurance.

Facts:

A facility licensed pursuant to Article 28 of the Public Health Law, which is not a general hospital, wishes to provide underlying coverage for its employed physicians by way of an additional insured endorsement to the facility’s medical professional liability policy (the "Policy"). Each physician will be provided with individual limits of one million three hundred thousand dollars for each claimant and three million nine hundred thousand dollars for all claimants. The individual limits for each physician will not be shared with any other insured or additional insured. The individual limits for each physician will not be encumbered by any losses paid for any other insured or additional insured. Each physician will receive an individual certificate of insurance.

The facility in question does not wish to purchase separate insurance policies for its physician employees. It contends that a single policy, with individual limits of coverage and certificates of insurance for the physicians involved, is more efficient for administrative and accounting purposes. The premium charged for each physician so endorsed will be the same as a particular insurer’s filed rate for the equivalent individual physician policy.

Analysis:

The New York Insurance Law provides that the New York Superintendent of Insurance and the New York Commissioner of Health, or their designees, will (1) purchase a policy, or policies, of excess insurance coverage for medical malpractice occurrences between July 1, 2003, and June 30, 2004, or (2) reimburse the hospital where the hospital purchases equivalent excess coverage for medical malpractice occurrences between the aforementioned period:

for physicians or dentists certified as eligible for each such period or periods pursuant to subdivision (2) of this section by a general hospital licensed pursuant to article 28 of the public health law; provided that no single insurer shall write more than fifty percent of the total excess premium for a given policy year; and provided, however, that such eligible physicians or dentists must have in force an individual policy, from an insurer licensed in this state of primary malpractice insurance coverage in amounts of no less than one million three hundred thousand dollars for each claimant and three million nine hundred thousand dollars for all claimants under that policy during the period of such excess coverage for such occurrences or be endorsed as additional insureds under a hospital professional liability policy which is offered through a voluntary attending physician ("channeling") program previously permitted by the superintendent of insurance during the period of such excess coverage for such occurrences.

1986 N.Y. Laws ch. 266, § 18, as amended by 2003 N.Y. Laws ch. 119, §§ 1-3.

Accordingly, an eligible physician or dentist, who seeks to participate in the New York State excess medical malpractice insurance program (the "Program"), must (1) have an underlying individual policy of primary medical malpractice insurance, or (2) be endorsed as an additional insured under a hospital professional liability policy, which is offered through a voluntary attending physician program previously permitted by the Superintendent of Insurance.1 Under the facts presented, the Policy is neither an individual policy of primary medical malpractice insurance, nor is it offered through a voluntary attending physician program previously permitted by the Superintendent of Insurance. Therefore, an eligible physician, who is covered by the underlying Policy, would not qualify for New York statutory excess medical malpractice insurance from the New York State hospital excess liability pool.

However, please note that N.Y. Ins. Law § 5907 (McKinney 2000) allows an eligible physician or dentist, who is a member of a purchasing group (which has registered with the Superintendent and has been issued a group policy of primary medical malpractice insurance to cover its members), to satisfy the Program’s underlying individual policy requirement with the group policy if such group policy complies with the rate, policy form, and other requirements of the Insurance Law, and regulations promulgated thereunder.

For further information you may contact Senior Attorney Kristian Earl Lynch at the New York City Office.


1 The Superintendent of Insurance has not permitted any new voluntary attending physician programs, and only one such program exists today.