BILL NUMBER: S4964
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the insurance law, in relation to excess line coverage
for certain medical malpractice insurance
 
PURPOSE:
To repeal the requirement that excess line brokers must obtain a decli-
nation from the medical malpractice insurance pool before the broker can
place primary malpractice insurance in the excess line market
 
SUMMARY OF PROVISIONS:
Section one of the bill amends subsection (e) of section 2118 of the
insurance law.
 
JUSTIFICATION:
New York State continues to suffer in numerous ways from a malfunction-
ing medical malpractice insurance marketplace that many describe as in
crisis. There are only four insurers which assume a significant volume
of medical malpractice business, insuring over 80% of the entire New
York market. Three of those insurers support the fourth insurer finan-
cially by bearing a portion of the losses which exceed premium. That
fourth market is the residual market, Medical Malpractice Insurance
Pool("MMIP"). MMIP exists to underwrite all medical malpractice risks
rejected by licensed insurers. MMIP insures physicians and hospitals
which cannot obtain insurance from other licensed insurers in New York
willing to write medical malpractice risks.
New York Law (§ 2118(e) (2) (A) (ii)) currently requires excess line
brokers to obtain a declination from the MMIP before the broker can
place primary malpractice insurance in the excess line market. As a
practical matter, MMIP will not decline such risks except in the rarest
of circumstances, which, by and large, bars the excess line market from
this line of business in New York. This bill would repeal the require-
ment for the excess line brokers to obtain a declination from the MMIP.
Repealing the MMIP declination requirement will provide doctors,
dentists and general hospitals a broader array of choices, products,
terms and conditions to suit a professional's particular insurance
needs. While all insurers, including MMIP, will be permitted to continue
to make available their malpractice insurance products, the addition of
excess line insurers will allow insureds greater choice in the selection
of insurance policies which best suit their needs from a number of addi-
tional, highly rated insurers.
While excess line brokers will continue to be required to diligently
search the licensed market before placing coverage with an excess line
insurer, the insured professional will be permitted to accept an offer
of coverage from an excess line insurer when the policy terms and condi-
tions are superior to those offered by MMIP. This legislation will
bolster the marketplace and treat the medical malpractice residual
market MMIP, in a manner consistent with the New York Property Insurance
Association and the Assigned Risk Plan. As a result, these changes will
provide medical professionals with more secure coverage options, while
also benefiting consumers who need protection and support should an
unfortunate medical event occur.
 
LEGISLATIVE HISTORY:
2023-24: Passed Senate
2021-22: Passed Senate
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
Immediately.