HB 1087 -- Medical Malpractice Insurance

Sponsor:  Schaaf

This bill changes the laws regarding medical malpractice
insurance.  The bill:

(1)  Subjects malpractice insurers to Sections 383.100 - 383.111,
RSMo, relating to reports from medical malpractice insurers; and
Sections 383.400 - 383.412, relating to notification, data
reporting, and rating requirements;

(2)  Requires the Director of the Department of Insurance,
beginning December 31, 2006, and annually thereafter, to report
to the General Assembly the actual rates charged for malpractice
insurance and a comparison to the rates of the previous year;

(3)  Defines the term "insurer" to include every entity operating
under Chapter 383 including self-insured health care providers;

(4)  Subjects insurers that fail to report claims information as
required by Sections 383.100 - 383.125 to the penalties
applicable to insurance companies under Section 374.215.
Guarantee associations paying claims on behalf of an insolvent
insurer will be subject to the same reporting requirements as an
insolvent insurer;

(5)  Requires the additional first-year association charge of
policyholders to be in the form of cash or a cash equivalent and
not in the form of a promissory note;

(6)  Establishes a procedure by which medical malpractice
insurers, excluding surplus lines insurers operating under
Chapter 384 or any entity self-insuring its exposure to medical
malpractice liability, are allowed to make premium rate changes;

(7)  Prohibits insurance companies and other entities providing
malpractice insurance to health care providers in Missouri from:

(a)  Increasing premium charges by more than 10% without 60 days'
prior notice to the insured; however, notice is not required if
the premium change is due to the request of the insured;

(b)  Refusing to renew policies without 60 days' prior notice,
unless the refusal to renew is based upon nonpayment of insurance
premiums, license termination or suspension, termination of the
insurer's reinsurance program, or a material change in the nature
of the insured's health care practice;

(c)  Ceasing to issue insurance policies without 180 days' prior
notice to the department; and

(d)  Requiring any insurer that fails to provide the required
notice, at the option of the insured, to continue the coverage;

(8)  Requires the department to establish, by October 1, 2006,
health care provider classification codes and risk-reporting
categories, considering available history or prior court
judgments for claims by any county or St. Louis City, for medical
malpractice insurance premiums and regulations for their
reporting;

(9)  Requires insurance companies and other entities providing
malpractice insurance in Missouri to report to the department, by
January 1, 2007, and annually thereafter, the premium rates
charged by category;

(10)  Requires the department, by June 1, 2007, and annually
thereafter, to establish and publish a market rate reflecting the
median of the actual rates charged for each risk-reporting
category for the preceding year;

(11)  Defines for purposes of Sections 383.308 - 383.316 the
terms "base rate" and "schedule rating or individual risk-rating
credits or debits";

(12)  Requires the department to establish reporting standards
for insurers to report base rates for health care provider
classifications in categories determined to be actuarially
appropriate.  The department will create a database, available to
the public, comparing base rates and the schedule of rating or
individual risk-rating credits or debits charged by insurers.
The database may distinguish between rates for different types of
coverage;

(13)  Requires the department to establish reporting standards
for insurers or an advisory organization designated by the
department to report annually on medical malpractice insurance
premiums, deviations from the base rate losses, exposures, and
other information the department requires for the purpose of
compiling a rate-making database.  The information collected will
be used in assisting medical malpractice insurers in developing
future rates and will be considered confidential.  Any
information that identifies a particular insurer will be removed;

(14)  Creates penalties for violations and authorizes license
suspension upon the written order of the director after notice to
the insurer and a hearing;

(15)  Requires the department to promulgate rules defining the
term "claim" as it relates to medical malpractice; and

(16)  Requires insurers writing medical malpractice insurance to
offer policies written so as to apply to injury resulting from
acts or omissions occurring during the policy period, regardless
of when the claim is filed.

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:42 am