Senate Committee Substitute

SCS/SBs 905 & 910 - FILING OF INFORMATION BY MEDICAL MALPRACTICE INSURANCE COMPANIES - This act modifies the definition of "insurer" to include 383 medical malpractice associations and self-insured health care providers for the purposes of filing medical malpractice claim reports (Section 383.105). The act requires the director of the Department of Insurance to establish by rule reporting standards in which insurers shall report annually insurance premiums, losses, exposure, and other information the director may require. This data will assist the department to monitor marketplace rates, financial solvency, affordability and the availability of medical malpractice insurance. The data collected shall be compiled in such a manner to assist medical malpractice insurers in developing future base rates, schedule rating or individual rating factors. The act requires the director to establish risk-reporting categories for medical malpractice insurance and establish regulations for the reporting of all base rates and premiums charged by such categories. These risk-reporting categories shall be established prior to May 30, 2007. Beginning June 1, 2008, medical malpractice insurers and self-insured health care providers must provide an annual report describing the actual rates or assessments charged for insurance for each of the risk-reporting categories (Section 383.106).

PUBLISHING OF MARKET RATES - The act requires the director to establish and publish market rates using the data collected under the act. The market rate shall reflect the median of the actual rates charged by insurers (those who have at least a 3% market share) for the various risk-reporting categories for the preceding year (Section 383.107).

The director shall, utilizing the information provided by Section 383.106, publish comparisons of the base rates charged by each insurer (Section 383.108).

PENALTIES FOR NOT FILING OR REPORTING INFORMATION - If an insurer violates any of the provisions relating to reporting medical malpractice information, the director may issue administrative orders and seek other remedies outlined in the act to assure compliance (Section 383.124).

APPROVAL OF MEDICAL MALPRACTICE RATES - This act requires medical malpractice insurers to file manuals, minimum premium, class rates, rating schedules and other rating rules with the director. Under the act, rates shall not be excessive, inadequate or unfairly discriminatory. The act requires that rates shall be based upon Missouri loss experience and not the insurance company's or the insurance industry's loss experience in other states unless the failure to do so would jeopardize the financial stability of the insurer. When approving rates, the director may consider the investment income or investment losses of the insurer for the ten-year period prior to the rate request.

Rates and supplementary rate information shall be filed at least 90 days before the rate's effective date. The director must make a determination of whether or not to approve a rate within 60 days of its filing. If the director fails to make an approval or disapproval within 60 days, the rate application shall be deemed approved. Rate information filed with the director shall be open to public inspection. The act allows the insurer to request a hearing within 30 days after a disapproval order. Rates may be disapproved at any time subsequent to the effective date. The director may only do this if the director provides the insurer a hearing on the issue.

Under the act, a medical malpractice insurer shall not implement any rate increase without first providing notice 30 days prior to implementing the rate increase.

Sections 383.196 to 383.199 shall expire on December 31, 2010.

NOTICE FOR REFUSAL TO RENEW POLICIES OR CEASING A LINE OF BUSINESS - This act prohibits medical malpractice insurers from refusing to renew a policy without providing written notice 60 days before such action unless the refusal to renew is based upon failure to pay premiums, suspension of provider's license or other material factors. The act prohibits insurers from ceasing a line of business within the state of Missouri without first providing written notice at least 180 days before ceasing the issuance of such policies (Section 383.450).


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