SCS/SB 908 & 719 - This act modifies the law of how insurance companies may be formed to offer malpractice insurance.

STOCK INSURANCE COMPANIES - This act allows medical malpractice insurance stock insurance companies to form under certain conditions. The general incorporation provisions of Chapter 379, RSMo, and insurance laws of this state shall be applicable unless the provisions of the act provide otherwise. No company authorized to issue medical malpractice insurance prior to August 28, 2004, shall incorporate under the provisions of this act. Under this act, the director of the Department of Insurance may waive the capital and surplus requirements solely for medical malpractice for any company formed under the provisions of this act. The act also provides that any company formed under this act shall not be a member of the Missouri Property and Casualty Insurance Guarantee Association, unless the company meets the applicable capital and surplus requirements and maintains such capital and surplus requirements for a period of not less than three consecutive years. Physician mutual insurance companies formed under Chapter 383, RSMo, may be merged into any company formed under this act.

SUBJECTING CERTAIN MED MAL POLICIES TO CANCELLATION AND RATE FILING REQUIREMENTS - Under this act, the definition of "commercial casualty insurance" as used in Section 379.882 and 379.888 shall include medical malpractice insurance. By including medical malpractice insurance in the definition of "commercial casualty insurance" in those sections, medical malpractice insurance polices will be subject to certain cancellation and nonrenewal requirements and the rate filing requirements that apply to other forms of commercial casualty insurance.

CONVERTING BEDPAN MUTUALS - Under this act, physician mutual insurance companies (383s or bedpan mutuals) formed under Chapter 383, RSMo, may be converted into an insurance company licensed under Chapter 375, 377, or 379, RSMo, or other business entity. Before converting into another form of insurance company, the physician mutual insurance company must pay all outstanding claims, indemnities and other liabilities.

WAIVER OF LAWSUITS PROHIBITED - No physician mutual insurance company shall require, as a condition in any insurance policy, that the insured health care provider waive any right to pursue a cause of action against the managers or directors of the company for mismanagement or other breach of fiduciary duties.

ARTICLES OF ASSOCIATION - The articles of incorporation filed by a company formed under sections 383.010 to 383.040 shall specify the types of assessments that will be applied to its members.

FINANCIAL AND MARKET CONDUCT EXAMINATIONS - This act modifies the section which subjects mutual insurance companies formed under Sections 383.010 to 383.040 to market conduct and financial examinations by the Department of Insurance.

CAPITAL AND SURPLUS OF 383 COMPANY - This act subjects associations formed under Sections 383.010 to 383.040 to the capital and surplus requirements of Section 379.080.

MAINTENANCE OF UNEARNED PREMIUM AND LOSS RESERVES - This act subjects associations formed under Sections 383.010 to 383.040 to the maintenance of unearned premium and loss reserves requirements of Section 379.102.

UNFAIR TRADE PRACTICES - Medical malpractice insurance associations formed under Sections 383.010 to 383.040 shall be subject the unfair trade practices act.

SOLVENCY - This act requires the Director of the Department of Insurance to order associations formed under Sections 383.010 to 383.040 to submit to its surplus to at least zero dollars. The Director of the Department of Insurance shall monitor the performance of the association's plan and order assessments upon its members if these surplus requirements are not met. Under the current law, this function is discretionary. The act provides that it is an unfair trade practice for an association to assert, contrary to its articles and bylaws, to its members that assessments shall not be made.
STEPHEN WITTE