LBD02166-01-3
A. 973 2
amended by section 15 of part C of chapter 59 of the laws of 2011, is
amended to read as follows:
(a) The superintendent of [insurance] FINANCIAL SERVICES and the
commissioner of health or their designee shall, from funds available in
the hospital excess liability pool created pursuant to subdivision 5 of
this section, purchase a policy or policies for excess insurance cover-
age, as authorized by paragraph 1 of subsection (e) of section 5502 of
the insurance law; or from an insurer, other than an insurer described
in section 5502 of the insurance law, duly authorized to write such
coverage and actually writing medical malpractice insurance in this
state; or shall purchase equivalent excess coverage in a form previously
approved by the superintendent of insurance for purposes of providing
equivalent excess coverage in accordance with section 19 of chapter 294
of the laws of 1985, for medical or dental malpractice occurrences
between July 1, 1986 and June 30, 1987, between July 1, 1987 and June
30, 1988, between July 1, 1988 and June 30, 1989, between July 1, 1989
and June 30, 1990, between July 1, 1990 and June 30, 1991, between July
1, 1991 and June 30, 1992, between July 1, 1992 and June 30, 1993,
between July 1, 1993 and June 30, 1994, between July 1, 1994 and June
30, 1995, between July 1, 1995 and June 30, 1996, between July 1, 1996
and June 30, 1997, between July 1, 1997 and June 30, 1998, between July
1, 1998 and June 30, 1999, between July 1, 1999 and June 30, 2000,
between July 1, 2000 and June 30, 2001, between July 1, 2001 and June
30, 2002, between July 1, 2002 and June 30, 2003, between July 1, 2003
and June 30, 2004, between July 1, 2004 and June 30, 2005, between July
1, 2005 and June 30, 2006, between July 1, 2006 and June 30, 2007,
between July 1, 2007 and June 30, 2008, between July 1, 2008 and June
30, 2009, between July 1, 2009 and June 30, 2010, between July 1, 2010
and June 30, 2011, between July 1, 2011 and June 30, 2012, between July
1, 2012 and June 30, 2013 and between July 1, 2013 and June 30, 2014 or
reimburse the hospital where the hospital purchases equivalent excess
coverage as defined in subparagraph (i) of paragraph (a) of subdivision
1-a of this section for medical or dental malpractice occurrences
between July 1, 1987 and June 30, 1988, between July 1, 1988 and June
30, 1989, between July 1, 1989 and June 30, 1990, between July 1, 1990
and June 30, 1991, between July 1, 1991 and June 30, 1992, between July
1, 1992 and June 30, 1993, between July 1, 1993 and June 30, 1994,
between July 1, 1994 and June 30, 1995, between July 1, 1995 and June
30, 1996, between July 1, 1996 and June 30, 1997, between July 1, 1997
and June 30, 1998, between July 1, 1998 and June 30, 1999, between July
1, 1999 and June 30, 2000, between July 1, 2000 and June 30, 2001,
between July 1, 2001 and June 30, 2002, between July 1, 2002 and June
30, 2003, between July 1, 2003 and June 30, 2004, between July 1, 2004
and June 30, 2005, between July 1, 2005 and June 30, 2006, between July
1, 2006 and June 30, 2007, between July 1, 2007 and June 30, 2008,
between July 1, 2008 and June 30, 2009, between July 1, 2009 and June
30, 2010, between July 1, 2010 and June 30, 2011, between July 1, 2011
and June 30, 2012, between July 1, 2012 and June 30, 2013 and between
July 1, 2013 and June 30, 2014 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
A. 973 3
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 liabil-
ity 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 occur-
rences. During such period, such policy for excess coverage or such
equivalent excess coverage shall, when combined with the physician's or
dentist's primary malpractice insurance coverage or coverage provided
through a voluntary attending physician ("channeling") program, total an
aggregate level of two million three hundred thousand dollars for each
claimant and six million nine hundred thousand dollars for all claimants
from all such policies with respect to occurrences in each of such years
provided, however, if the cost of primary malpractice insurance coverage
in excess of one million dollars, but below the excess medical malprac-
tice insurance coverage provided pursuant to this act, exceeds the rate
of nine percent per annum, then the required level of primary malprac-
tice insurance coverage in excess of one million dollars for each claim-
ant shall be in an amount of not less than the dollar amount of such
coverage available at nine percent per annum; the required level of such
coverage for all claimants under that policy shall be in an amount not
less than three times the dollar amount of coverage for each claimant;
and excess coverage, when combined with such primary malpractice insur-
ance coverage, shall increase the aggregate level for each claimant by
one million dollars and three million dollars for all claimants; and
provided further, that, with respect to policies of primary medical
malpractice coverage that include occurrences between April 1, 2002 and
June 30, 2002, such requirement that coverage be in amounts no less than
one million three hundred thousand dollars for each claimant and three
million nine hundred thousand dollars for all claimants for such occur-
rences shall be effective April 1, 2002. PROVIDED FURTHER THAT, EFFEC-
TIVE JULY 1, 2013, THE COST OF THE FIRST FIVE HUNDRED FIFTY THOUSAND
DOLLARS OF AN ELIGIBLE PHYSICIAN'S PRIMARY MEDICAL MALPRACTICE COVERAGE
SHALL BE PAID THROUGH THE HEALTH CARE ACCESS PROTECTION FUND CREATED
PURSUANT TO SECTION 97-LLLL OF THE STATE FINANCE LAW.
S 3. The state finance law is amended by adding a new section 97-llll
to read as follows:
S 97-LLLL. HEALTH CARE ACCESS PROTECTION FUND. FUNDS ACCUMULATED,
INCLUDING INCOME FROM INVESTED FUNDS, FROM THE PAYMENTS SPECIFIED IN
SECTIONS THREE THOUSAND TWO HUNDRED FORTY AND FOUR THOUSAND THREE
HUNDRED TWENTY-EIGHT OF THE INSURANCE LAW SHALL BE DEPOSITED AND CREDIT-
ED TO A SPECIAL REVENUE FUND-OTHER FUND TO BE ESTABLISHED BY THE COMP-
TROLLER. TO THE EXTENT OF FUNDS APPROPRIATED THEREFOR, THE COMMISSIONER
SHALL PROVIDE FUNDING FOR THE PURPOSES OF COVERING THE COST OF THE FIRST
FIVE HUNDRED FIFTY THOUSAND DOLLARS OF PRIMARY MEDICAL MALPRACTICE
COVERAGE OF A PHYSICIAN WHO IS ELIGIBLE TO OBTAIN EXCESS COVERAGE, AS
SET FORTH PURSUANT TO PARAGRAPH (A) OF SUBDIVISION ONE OF SECTION EIGH-
TEEN OF CHAPTER TWO HUNDRED SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED
EIGHTY-SIX.
S 4. The insurance law is amended by adding a new section 3240 to read
as follows:
S 3240. LOSS RATIO PAYMENT. BEGINNING IN CALENDAR YEAR TWO THOUSAND
ELEVEN, IF THE LOSS RATIO FOR AN INDIVIDUAL HEALTH INSURANCE POLICY
FORM, A SMALL GROUP HEALTH INSURANCE OR A LARGE GROUP HEALTH INSURANCE
POLICY FORM IS LESS THAN EIGHTY-SEVEN PERCENT, AN INSURER SHALL PAY TO
A. 973 4
THE COMMISSIONER OF HEALTH OR SUCH COMMISSIONER'S DESIGNEE A PERCENT OF
THE AGGREGATE PREMIUM COLLECTED FOR THE POLICY FORM IN THE PREVIOUS YEAR
EQUAL TO THE DIFFERENCE BETWEEN THE MINIMUM LOSS RATIO FOR THE POLICY
FORM STATED IN THIS SECTION AND THE ACTUAL LOSS RATIO; PROVIDED, HOWEV-
ER, SUCH AMOUNTS SHALL BE OFFSET BY ANY AMOUNT REQUIRED TO BE RETURNED
TO POLICY HOLDERS IN ACCORDANCE WITH SECTION THREE THOUSAND TWO HUNDRED
THIRTY-ONE OF THIS ARTICLE. AMOUNTS DUE UNDER THIS SECTION SHALL BE PAID
BY MAY FIRST OF THE YEAR FOLLOWING THE CALENDAR YEAR IN WHICH A LOSS
RATIO REQUIREMENT WAS NOT SATISFIED. THE INSTRUCTIONS AND FORMAT FOR
CALCULATING AND REPORTING LOSS RATIOS SHALL BE THE SAME AS THOSE THAT
APPLY TO SECTION THREE THOUSAND TWO HUNDRED THIRTY-ONE OF THIS ARTICLE.
THE SUPERINTENDENT SHALL HAVE AUTHORITY TO AUDIT DATA, IMPOSE PENALTIES
FOR NONCOMPLIANCE WITH THIS SECTION CONSISTENT WITH AUTHORITY PROVIDED
TO THE SUPERINTENDENT IN OTHER PROVISIONS OF THIS CHAPTER, AND PROMUL-
GATE REGULATIONS TO IMPLEMENT THIS SECTION. SUCH SUMS SHALL BE DIRECTED
TO THE HEALTH CARE ACCESS PROTECTION FUND SET FORTH PURSUANT TO SECTION
NINETY-SEVEN-LLLL OF THE STATE FINANCE LAW. FOR THE PURPOSES OF THIS
SECTION, THE TERM "LOSS RATIO" SHALL MEAN ALL FUNDS EXPENDED DIRECTLY
FOR THE PURPOSES OF REIMBURSING MEDICAL CARE, INCLUDING CARE PROVIDED BY
PHYSICIANS AND OTHER HEALTH CARE PROFESSIONALS, HOSPITALS, NURSING
HOMES, HOME CARE, PRESCRIPTION DRUGS AND DURABLE MEDICAL EQUIPMENT,
PROVIDED TO INSUREDS COVERED UNDER AN INDIVIDUAL HEALTH INSURANCE POLICY
FORM, A SMALL GROUP HEALTH INSURANCE POLICY FORM OR A LARGE GROUP HEALTH
INSURANCE POLICY FORM, AS A PERCENTAGE OF REVENUE DERIVED BY SUCH INSUR-
ER FOR SUCH POLICY FORM.
S 5. The insurance law is amended by adding a new section 4328 to read
as follows:
S 4328. LOSS RATIO PAYMENT. BEGINNING IN CALENDAR YEAR TWO THOUSAND
ELEVEN, IF THE LOSS RATIO FOR AN INDIVIDUAL DIRECT PAYMENT CONTRACT
FORM, A SMALL GROUP OR A SMALL GROUP REMITTANCE CONTRACT FORM OR A LARGE
GROUP CONTRACT FORM IS LESS THAN EIGHTY-SEVEN PERCENT, A CORPORATION
SUBJECT TO THE PROVISIONS OF THIS ARTICLE SHALL PAY TO THE COMMISSIONER
OF HEALTH OR SUCH COMMISSIONER'S DESIGNEE A PERCENT OF THE AGGREGATE
PREMIUMS EARNED FOR THE CONTRACT FORM IN THE PREVIOUS CALENDAR YEAR
EQUAL TO THE DIFFERENCE BETWEEN THE MINIMUM LOSS RATIO FOR THE POLICY
FORM AS STATED IN THIS SECTION AND THE ACTUAL LOSS RATIO; PROVIDED,
HOWEVER, THAT SUCH AMOUNT SHALL BE OFFSET BY ANY AMOUNT REQUIRED TO BE
RETURNED TO CONTRACT HOLDERS IN ACCORDANCE WITH SECTION FOUR THOUSAND
THREE HUNDRED EIGHT OF THIS ARTICLE. AMOUNTS DUE UNDER THIS SECTION
SHALL BE PAID BY MAY FIRST OF THE YEAR FOLLOWING THE CALENDAR YEAR IN
WHICH THE LOSS RATIO REQUIREMENT WAS NOT SATISFIED. THE INSTRUCTIONS
AND FORMAT FOR CALCULATING AND REPORTING LOSS RATIOS SHALL BE THE SAME
AS THOSE THAT APPLY TO SECTION FOUR THOUSAND THREE HUNDRED EIGHT OF THIS
ARTICLE. THE SUPERINTENDENT SHALL HAVE AUTHORITY TO AUDIT DATA, IMPOSE
PENALTIES FOR NONCOMPLIANCE WITH THIS SECTION CONSISTENT WITH AUTHORITY
PROVIDED TO THE SUPERINTENDENT IN OTHER PROVISIONS OF THIS CHAPTER, AND
PROMULGATE REGULATIONS TO IMPLEMENT THIS SECTION. SUCH FUNDS SHALL BE
DIRECTED TO THE HEALTH CARE ACCESS PROTECTION FUND ESTABLISHED PURSUANT
TO SECTION NINETY-SEVEN-LLLL OF THE STATE FINANCE LAW. FOR THE PURPOSES
OF THIS SECTION, THE TERM "LOSS RATIO" SHALL MEAN ALL FUNDS EXPENDED
DIRECTLY FOR THE PURPOSES OF REIMBURSING MEDICAL CARE, INCLUDING CARE
PROVIDED BY PHYSICIANS AND OTHER HEALTH CARE PROFESSIONALS, HOSPITALS,
NURSING HOMES, HOME CARE, PRESCRIPTION DRUGS AND DURABLE MEDICAL EQUIP-
MENT, PROVIDED TO INSUREDS COVERED UNDER AN INDIVIDUAL DIRECT PAYMENT
CONTRACT FORM, A SMALL GROUP OR SMALL GROUP REMITTANCE CONTRACT FORM OR
A. 973 5
A LARGE GROUP CONTRACT FORM, AS A PERCENTAGE OF REVENUE DERIVED BY SUCH
INSURER FOR SUCH POLICY FORM.
S 6. The insurance law is amended by adding a new section 3224-d to
read as follows:
S 3224-D. PHYSICIAN REIMBURSEMENT. (A) IF THE SUPERINTENDENT APPROVES
AN INCREASE IN THE COST OF MEDICAL MALPRACTICE INSURANCE COVERAGE FOR
PHYSICIANS AND SURGEONS, BY SEPTEMBER FIRST OF EACH YEAR IN WHICH SUCH
INCREASE IS APPROVED, A HEALTH PLAN SHALL INCREASE ITS FEE SCHEDULE FOR
PHYSICIAN REIMBURSEMENT BY A PERCENTAGE EQUAL TO OR GREATER THAN A
PERCENTAGE AS DETERMINED BY THE SUPERINTENDENT TO BE THE INCREASE IN
PHYSICIAN OFFICE EXPENSE ALLOCABLE TO THE INCREASE IN THE COST OF A
MEDICAL MALPRACTICE INSURANCE POLICY APPROVED BY THE SUPERINTENDENT FOR
THE POLICY YEAR BEGINNING THE PREVIOUS JULY FIRST. THE SUPERINTENDENT
SHALL HAVE THE AUTHORITY TO ESTABLISH SEPARATE PERCENTAGES BASED UPON
REGION OR SPECIALTY OF PRACTICE.
(B) AN INSURER'S, ORGANIZATION'S OR CORPORATION'S PURPOSEFUL OR KNOW-
ING FAILURE TO INCLUDE SUCH INCREASE IN ITS FEE SCHEDULE FOR EACH PHYSI-
CIAN FOR THE CONTRACT CYCLE NEXT FOLLOWING OR FAILURE TO INCLUDE SUCH
INCREASE IN FUTURE REIMBURSEMENT FOR OUT OF NETWORK SERVICES WILL BE
ASSESSED A MONETARY PENALTY OF ONE MILLION DOLLARS FOR EACH AFFECTED
PHYSICIAN.
(C) NOTHING IN THIS SECTION SHALL BE CONSTRUED: (1) TO PREVENT A
HEALTH PLAN FROM INCREASING ITS FEE SCHEDULE IN A PERCENTAGE GREATER
THAN THE PERCENTAGE AS DETERMINED BY THE SUPERINTENDENT TO BE THE
INCREASE IN PHYSICIAN OFFICE EXPENSE ALLOCABLE TO THE INCREASE IN THE
COST OF A MEDICAL MALPRACTICE INSURANCE POLICY APPROVED BY THE SUPER-
INTENDENT FOR THE POLICY YEAR BEGINNING THE PREVIOUS JULY FIRST; OR
(2) TO REQUIRE THE IMPOSITION OF A DECREASE IN PHYSICIAN REIMBURSEMENT
AS A RESULT OF AN AVERAGE RATE DECREASE FOR MEDICAL MALPRACTICE INSUR-
ANCE COVERAGE APPROVED BY THE SUPERINTENDENT.
(D) FOR THE PURPOSES OF THIS SECTION, A "HEALTH PLAN" SHALL BE DEFINED
AS AN INSURER THAT IS LICENSED TO WRITE ACCIDENT AND HEALTH INSURANCE,
OR THAT IS LICENSED PURSUANT TO ARTICLE FORTY-THREE OF THIS CHAPTER OR
IS CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW.
S 7. This act shall take effect immediately; provided that the amend-
ments to chapter 266 of the laws of 1986 made by section one of this act
shall apply to physician malpractice insurance policies issued on or
after July 1, 2013.