Medical Liability Insurer MMIC Forms Risk Retention Group Domiciled in Washington

Medical liability insurer MMIC Group Inc. has formed a risk retention group to meet the needs of physician groups, clinics or hospitals based in its eight-state core territory that may employ professionals in other states.

MMIC RRG Inc. is domiciled in Washington, D.C., and was formed in May 2011, a company spokesperson said. "We just haven't promoted it widely outside the company."

MMIC said it's offering the RRG option to accounts based in the eight Midwestern states where it's licensed and writing new business: Minnesota, Iowa, Wisconsin, North Dakota, South Dakota, Nebraska, Kansas and Missouri.

"A clinic or physician group insured by MMIC that is based in one of those states may, for example, employ radiologists or laboratory professionals in another state," Gerald O'Connell, vice president, alternative risk transfer solutions of MMIC, said in a statement. "If we are not licensed in the other state, the RRG option can include the professionals under their employer's coverage program."

MMIC also is licensed and admitted to do business in six other states. The RRG enables it to underwrite business in states where it is not licensed and admitted, subject to a registration to do business in those states, the company said.

"At a time of increasing consolidation in health care, this may also be a useful option for clinics, groups or systems that acquire operations and organizations in other states," O'Connell said.

MMIC is in the process of registering the RRG in several states, and will do so in the future based on policyholder needs.

Risks insured under an RRG are considered "non-admitted" and aren't governed by state guaranty funds.

Last November, the Minnesota Department of Commerce approved MMIC Group Inc. to transition from a stock holding company to a mutual insurance holding company. The Minneapolis-based firm, which is the largest writer of medical professional liability coverage in the state, had already secured approval from its physician policyholders and shareholders but had been awaiting final approval from state regulators (Best's News Service, Nov. 17, 2011).

MMIC says it insures more than 14,000 health care providers and 375 hospitals and health care facilities. It's the 20th-largest medical professional liability insurer in the United States ranked by direct premiums written, according to BestLink.

Caps on noneconomic damages have become common in states looking to lower medical professional liability insurance rates. Around mid-2011, almost 30 states had laws in place that limit damages in medical liability cases. In 2011, several states, including Texas, Oklahoma and Pennsylvania, passed laws that affect how medical liability cases are handled. (Best's News Service, Aug. 25, 2011).

(By Fran Matso Lysiak, senior associate editor, BestWeek: [email protected])