Doctor-Run Insurance Will Be Ready by July

From the Charleston Daily Mail, May 19, 2004, Wednesday

The state’s first physician-run insurance company is set to debut July 1 with about 1,450 clients.

That’s about half of all West Virginia physicians whose liability coverage isn’t provided by hospitals, the federal government or medical schools.

The state Insurance Commission is expected to issue a license within 15 days to the Physician’s Mutual Insurance Company, Commissioner Jane Cline said.

Also, still to be completed are the 10 or so contracts for reinsurance with both domestic and international companies, said Dr. Robert Ghiz, chairman of the mutual’s board.

Ghiz said the reinsurance company officials are familiar with the state’s medical malpractice insurance problems.

“They know all about it, even in London,” Ghiz said. “West Virginia had a reputation there. But they are very excited about our tort reform. It’s model legislation.”

Contracts for several related services also have been signed, Ghiz said. Acordia will handle administration while Ernst & Young will provide actuaries who will determine rates.

The board has hired David Rader as executive director. His offices are in the West Virginia State Medical Association building in Kanawha City.

“Everything is almost complete to start July 1,” Ghiz said.

Only two major liability insurance companies remain in West Virginia, Medical Assurance with about 300 physicians and Commonwealth with about the same number, Cline said.

But Ghiz said the mutual represents “the only significant act in town.”

“This has to survive,” he said. “If this doesn’t go, we’ll just hemorrhage a lot of people.”

Ghiz said he believes courts and juries would be more sympathetic to a domestic company. Plus, physicians feel a certain loyalty to their own company. They might be inclined to stick with the physician’s mutual even if companies move back to the state and offer cheaper premiums.

Last year’s legislation created the mutual. Until July 1, physicians are insured through the state Board of Risk and Insurance Management.

About $ 24 million from tobacco settlement funds and $ 1,000 physician assessments will provide the initial capital for the company.

“We are confident this program will be successful,” Cline said. “The Insurance Commission is monitoring it closely. It has a nice sized book of business, particularly when you consider the size of the state.”