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  • Physicians/Medical Groups
    Is Your Medical Malpractice Insurance Escalating Out of Control?
    Five Things To Think About As The Malpractice Market In NY Changes
    Recent Success
    What Are The Benefits Of Participating In A Risk Retention Group?
    Do You Have Questions About RRGs and J.M. Woodworth?
    Is Your Medical Malpractice Insurance Escalating Out of Control?
    BHL has been on the forefront of helping physicians and surgeons find a solution to the medical malpractice crisis. We have successfully developed unique and exclusive options that put you back in control of medical malpractice costs and coverage.

    BHL worked with Uni-Ter to develop the first physicians and surgeons Risk Retention Group for New York State, the J.M. Woodworth Risk Retention Group, Inc. It provides medical malpractice coverage exclusively for physicians and surgeons. J.M. Woodworth is an insurance company owned by physicians and surgeons practicing in New York, Connecticut, New Jersey and Massachusetts. J.M. Woodworth offers physicians and surgeons comprehensive malpractice insurance at affordable rates. Low rates and financial stability are made possible through selective underwriting, skilled risk management, aggressive defense against claims, Best-rated reinsurance and conservative balance sheet management.

    Woodworth was formed in 2006 as a Risk Retention Group under the Federal Liability Risk Retention Act, which enables business and professional organizations to obtain liability insurance that had become unavailable or unaffordable due to the lawsuit crisis.

    By utilizing alternatives with proven results, such as Claims Paid Coverage Form, BHL have succeeded where others have struggled and have provided physicians and surgeons one of the strongest malpractice insurance programs available today.


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    Five Things To Think About As The Malpractice Market In NY Changes
    1. The Bad News – premiums in New York are actually too low!
      Over the last 10 years, MLMIC has asked NYSID for increases totaling over 122%, but NYSID has only allowed them 45%. …They need MORE premium, but there was a freeze last year! They MUST raise premiums to be viable. They have asked for 7.5% this year, but most people expect the freeze to be continued. That will not fix the $600 million deficit of the MMIP program, or help the carriers stop the loss of surplus.
    2. Traditional carriers struggling financially
      MLMIC has lost over $1.5 billion in surplus since 2000, while PRI announced they were $43 million in deficit last month. They both need rate increases. We need tort reform as well, but that may not come for quite some time with our dysfunctional elected officials.
    3. Physicians paying more than their “fair share”
      Those with good loss histories (no/few Malpractice claims paid out) are getting tired of carrying the load for those with numerous claims. It works in every other line of insurance: If you have a good driving record, you pay less for your car insurance. Dr. Robert Minotti, President of MLMIC, said in Saratoga at the MGMA conference this June that it is time for tiered pricing for NYS physicians. This JMW RRG is just that – better pricing for those who qualify for it.
    4. Acceptance among hospitals is changing dramatically.
      Just as North Shore has recently done, many hospitals and systems are coming to the realization that they need to help their physicians find better alternatives. St. Luke’s Cornwall (Newburgh) is another example, where they brought in JMW to help their physicians find an alternative to this mess.
    5. The malpractice landscape in NY continues to change.
      The trigger for Statute of Limitations could be changed from date of incident (now) to date of discovery (proposed), which could increase rates by an additional 30%. MLMIC has dropped out of the excess market, stating that NYS has not reimbursed them enough to cover their costs. PRI is struggling financially. Consider all of this within the NYS budget shortfall of $14 billion – and growing – and the thoughts that some physicians used to have about “the state bailing us out” are gone. There are even questions of the existence and future availability of the “guaranty fund” that is backing carriers like MLMIC and PRI. Do we think that there is actually a lock box in New York with money set aside?
    Some J.M. Woodworth Highlights
    • Selective underwriting
    • Aggressive Claims and Defense philosophy – No nuisance claims
    • Claims Made and Paid Claims coverage options
    • Increased OPMC defense limits – up to $100,000 at no extra charge
    • Entity coverage included in premium (shared limits)
    • “A, Exceptional” financial rating form Demotech
    • Advisory council
    • Save over 50% off current Occurrence premiums
    • Maintain “Retro Date” (of your Claims Made policy) without buying “tail” from current carrier.
    • Regain control of your malpractice program, and your future
    • Pay for your losses, not someone else’s
    • Insulate your practice form increases, assessments and instability
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    Recent BHL Successes:
    • The Risk Retention Group saved an oncologist over $21,000 and will save more than $60,000 over five years.
    • A large multi-specialty group of 25 physicians saved over $500,000in the FIRST YEAR.
    • A gynecologist saved over 65% on their occurrence premium the first year.
    • A Western New York ortho group saved over $200,000 the first year and over $1 million over five years.
    • The Risk Retention Group helped a plastic surgeon pay 50% less premium the first year and gave him full “prior acts” coverage. No need for him to buy tail insurance.
    • A neurologist saved over $8,000 the first year and saved him from rate increases.
    • A large internal medicine group is saving over $460,000 over the next five years because they participated in the J.M. Woodworth Risk Retention Group.
    • A six-doctor ortho practice is saving over $575,000 in the next five years. Instead of handing these savings over to NYS or the insurance companies, and our financial planning and investment group is helping them securing their retirement by properly managing these funds.
    • A general surgeon saved over 70% on his premium in the first year alone and is back on track to retire on schedule.
  • Click here to read first-hand what doctors are saying about BHL and the J.M. Woodworth Risk Retention Group.

    There are many, many more examples of physicians and surgeons taking back control of their incomes and their future. [back to top]

    What Are The Benefits Of Participating In A Risk Retention Group?
    • Identify areas of potential liability exposure
    • Provide coverage tailored to your unique needs
    • Improve patient relations
    • Improve defensibility of lawsuits
    • Improve quality of care and services by reducing the insurance burden
    • Reduce, mitigate and/or eliminate risk exposures
    • Reduce the frequency and severity of malpractice claims
    • Save money with lower malpractice insurance premiums
    • Return to you control of your insurance program
    • Provide you with broader coverage
    • Enjoy the highest-level service from an independent insurance agency
    • Delivers a stable, long-term solution
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    Do You Have Questions About RRGs and J.M. Woodworth?
    Many medical professionals have questions about whether Risk Retention Groups are a safe choice that will offer them effective liability protection. They worry that their sponsoring hospital will not accept Risk Retention Group insurance. Many professionals are misinformed and confused. The following information answers many of those questions and dispels the myths that have been perpetuated by competing programs that are now under severe financial pressure.

    Q. What is a Risk Retention Group/Why was Woodworth established in Nevada?
    A. The J.M. Woodworth Risk Retention Group is a stock insurance company authorized by the Federal Liability Risk Retention Act of 1986 to provide Medical Malpractice Insurance for its Shareholders/Members, primarily New York based physicians. Authorization under the Federal Statute allows Risk Retention Groups to be chartered in any State, subject to regulatory approval, of their choosing. Nevada was selected based on the ease, speed and lower expense of doing business in that jurisdiction as opposed to other States. Once chartered an RRG can engage in the business of insurance in all States. Woodworth is registered as an authorized Risk Retention Group with the New York State Insurance Department.

    Q. Is Woodworth financially rated by Bests or other insurance rating agencies?
    A. Woodworth does enjoy “A” rated reinsurance and has a Demotech “A” financial stability rating. Financially the largest medical malpractice carrier in New York, MLMIC, has sustained serious reductions in its capital/surplus over the past several years as indicated on the attached exhibit, incurring loss and operating ratios well in excess of 140%. In addition it could be argued that MLMIC might actually have a negative net worth if their percent of MMIP’s $500+mm deficit was taken into consideration.

    Q. Is Woodworth a non-admitted carrier in the State of New York?
    A. Yes, Woodworth is indeed a non-admitted carrier and is not subject to the New York State Guarantee Fund. As a non-admitted carrier, Woodworth has freedom and flexibility in determining its own rates and forms and will not be subject to funding assessment obligations for the State’s assigned risk MMIP facility. It is able to avoid the regulatory constraints that contributed to and have created the crisis in New York’s Medical Malpractice market in the first place!

    It should also be noted that the Guarantee Fund is made available only to the extent that monies exist in it at the time of a carrier’s insolvency. Woodworth has a 3 year reinsurance contract backing its primary insurance coverage.

    Q. Does Woodworth offer “free excess” or VAP credits to its doctors in the policy rating formula?
    A. Woodworth makes available similar limits of coverage under its program as provided by Section 18 “free excess” coverage. It should be noted that MLMIC and PRI very rarely offer more than $1,000,000 in their typical settlement negotiations and “free excess” coverage only applies if the entire $1,000,000 is offered. As such from a practical standpoint this “free excess” benefit is a cosmetic one in all but the most serious liability cases.

    The VAP credits are addressed by Woodworth through the crediting and/or discounting of its standard rates based on an underwriting analysis of the doctor applying for coverage.

    Q. Do Woodworth policy forms require the consent of the physician to settle a covered claim?
    A. Woodworth’s policy includes an automatic consent to settle provision as no additional premium charge.

    Q. Does Woodworth offer a “paid claims” policy form which will be utilized to deliberately non-renew and/or cancel policyholders prior to the time claims are supposed to actually be paid?
    A. As pointed out earlier the Woodworth facility is dedicated to serving the risk management insurance needs of the physicians/policyholders in the group. Non renewal or cancellation of a physician/ shareholder is a serious decision which requires the involvement of the Physician’s Group and/or Hospital with admitting privileges. The Board of Directors will consist of policyholders and other stake holders that have a keen interest in preserving and promoting the underwriting viability and results of the group. These actions are only taken with great care and consideration not to merely avoid contract obligations for profit.

    This is not designed to be a “set up” and there is no motivation other than to purge the group of bad performers in an effort to make certain that it succeeds long term.

    Q. If Woodworth is successful won’t it further accelerate the financial decline and results of MLMIC and PRI?
    A. To the contrary. We think and hope that competition could create a better overall environment for the entire physician/healthcare community for the obvious reasons. The interest of the physicians would be best served by at least having a cost effective long term alternative to policies issued by MLMIC or PRI. Likewise, we think it has become clear that the marketplace has not been particularly well served by having two (2) carriers dominate - either for them or for the buying community - as evidenced by their financial deterioration and the continued rate increases being passed on to physicians and other healthcare providers.

    Q. Does Woodworth utilize low initial pricing to attract new membership and then use the “paid claims” platform to increase rates on an unregulated basis going forward?
    A. The Woodworth rates are guaranteed for the first three (3) years; are backed by a three (3) year reinsurance contract and are presently based on current blended MLMIC/PRI rate levels. Because of this they are at least starting with a degree of rate adequacy that should serve as a solid foundation to support the program’s effectiveness over time.

    Woodworth’s ability to offer lower rates in the initial years of the program revolves around the “paid claims” coverage approach which allows for a much greater degree of predictability in terms of the actual claims costs for the policy period being priced.

    Future rate increases will be predicated on the financial performance of the group as determined by the Woodworth Board of Directors relying on Deloite, as consulting actuaries.

    Q. Will Woodworth arbitrarily cancel or non-renew doctors with claims pending and charge exorbitant “tail” exit premiums at the same time?
    A. Again, the cancellation and/or non-renewal process is governed by the Board of Directors and its peer review process. These bodies also determine, in connection with underwriters and actuaries, what tail premiums will be charged based on the individual experience of the doctor. Contractually the tail premium is capped between 215% and 550% of the expiring premium.

    Hospitals have the flexibility to purchase claims made tail coverage as opposed to occurrence tail coverage at a charge of 250% of the mature premium.


    If you have additional questions, we are pleased to take the time to provide you with in-depth replies. Please call Brian Hurley at 1-800-268-1830 ext. 407 or email him at bhurley@bhlinsurance.com

    Brian Hurley
    Commercial Lines Account Executive

    (315) 413-4407
    bhurley@bhlinsurance.com


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