A. 8620 2
amended by section 23 of part B of chapter 58 of the laws of 2008, is
amended to read as follows:
(a) The superintendent of insurance and the commissioner of health or
their designee shall, from funds available in the hospital excess
liability pool created pursuant to subdivision (5) of this section,
purchase a policy or policies for excess insurance coverage, as author-
ized by paragraph (1) of subsection (e) of section 5502 of the insurance
law; or from an insurer, other than an insurer described in section 5502
of the insurance law, duly authorized to write such coverage and actual-
ly writing medical malpractice insurance in this state; or shall
purchase equivalent excess coverage in a form previously approved by the
superintendent of insurance for purposes of providing equivalent excess
coverage in accordance with section 19 of chapter 294 of the laws of
1985, for medical or dental malpractice occurrences between July 1, 1986
and June 30, 1987, between July 1, 1987 and June 30, 1988, between July
1, 1988 and June 30, 1989, between July 1, 1989 and June 30, 1990,
between July 1, 1990 and June 30, 1991, between July 1, 1991 and June
30, 1992, between July 1, 1992 and June 30, 1993, between July 1, 1993
and June 30, 1994, between July 1, 1994 and June 30, 1995, between July
1, 1995 and June 30, 1996, between July 1, 1996 and June 30, 1997,
between July 1, 1997 and June 30, 1998, between July 1, 1998 and June
30, 1999, between July 1, 1999 and June 30, 2000, between July 1, 2000
and June 30, 2001, between July 1, 2001 and June 30, 2002, between July
1, 2002 and June 30, 2003, between July 1, 2003 and June 30, 2004,
between July 1, 2004 and June 30, 2005, between July 1, 2005 and June
30, 2006, between July 1, 2006 and June 30, 2007, between July 1, 2007
and June 30, 2008, between July 1, 2008 and June 30, 2009, between July
1, 2009 and June 30, 2010, and between July 1, 2010 and June 30, 2011 or
reimburse the hospital where the hospital purchases equivalent excess
coverage as defined in subparagraph (i) of paragraph (a) of subdivision
(1-a) of this section for medical or dental malpractice occurrences
between July 1, 1987 and June 30, 1988, between July 1, 1988 and June
30, 1989, between July 1, 1989 and June 30, 1990, between July 1, 1990
and June 30, 1991, between July 1, 1991 and June 30, 1992, between July
1, 1992 and June 30, 1993, between July 1, 1993 and June 30, 1994,
between July 1, 1994 and June 30, 1995, between July 1, 1995 and June
30, 1996, between July 1, 1996 and June 30, 1997, between July 1, 1997
and June 30, 1998, between July 1, 1998 and June 30, 1999, between July
1, 1999 and June 30, 2000, between July 1, 2000 and June 30, 2001,
between July 1, 2001 and June 30, 2002, between July 1, 2002 and June
30, 2003, between July 1, 2003 and June 30, 2004, between July 1, 2004
and June 30, 2005, between July 1, 2005 and June 30, 2006, between July
1, 2006 and June 30, 2007, between July 1, 2007 and June 30, 2008,
between July 1, 2008 and June 30, 2009, between July 1, 2009 and June
30, 2010, and between July 1, 2010 and June 30, 2011 for physicians or
dentists certified as eligible for each such period or periods pursuant
to subdivision (2) of this section by a general hospital licensed pursu-
ant to article 28 of the public health law; provided that no single
insurer shall write more than fifty percent of the total excess premium
for a given policy year; and provided, however, that such eligible
physicians or dentists must have in force an individual policy, from an
insurer licensed in this state of primary malpractice insurance coverage
in amounts of no less than one million three hundred thousand dollars
for each claimant and three million nine hundred thousand dollars for
all claimants under that policy during the period of such excess cover-
age for such occurrences or be endorsed as additional insureds under a
A. 8620 3
hospital professional liability policy which is offered through a volun-
tary attending physician ("channeling") program previously permitted by
the superintendent of insurance during the period of such excess cover-
age for such occurrences. During such period, such policy for excess
coverage or such equivalent excess coverage shall, when combined with
the physician's or dentist's primary malpractice insurance coverage or
coverage provided through a voluntary attending physician ("channeling")
program, total an aggregate level of two million three hundred thousand
dollars for each claimant and six million nine hundred thousand dollars
for all claimants from all such policies with respect to occurrences in
each of such years provided, however, if the cost of primary malpractice
insurance coverage in excess of one million dollars, but below the
excess medical malpractice insurance coverage provided pursuant to this
act, exceeds the rate of nine percent per annum, then the required level
of primary malpractice insurance coverage in excess of one million
dollars for each claimant shall be in an amount of not less than the
dollar amount of such coverage available at nine percent per annum; the
required level of such coverage for all claimants under that policy
shall be in an amount not less than three times the dollar amount of
coverage for each claimant; and excess coverage, when combined with such
primary malpractice insurance coverage, shall increase the aggregate
level for each claimant by one million dollars and three million dollars
for all claimants; and provided further, that, with respect to policies
of primary medical malpractice coverage that include occurrences between
April 1, 2002 and June 30, 2002, such requirement that coverage be in
amounts no less than one million three hundred thousand dollars for each
claimant and three million nine hundred thousand dollars for all claim-
ants for such occurrences shall be effective April 1, 2002. PROVIDED
FURTHER THAT, EFFECTIVE JULY 1, 2009, THE COST OF THE FIRST FIVE HUNDRED
FIFTY THOUSAND DOLLARS OF AN ELIGIBLE PHYSICIAN'S PRIMARY MEDICAL MALP-
RACTICE COVERAGE SHALL BE PAID THROUGH THE HEALTH CARE ACCESS PROTECTION
FUND CREATED PURSUANT TO SECTION 97-JJJJ OF THE STATE FINANCE LAW.
S 3. The state finance law is amended by adding a new section 97-jjjj
to read as follows:
S 97-JJJJ. HEALTH CARE ACCESS PROTECTION FUND. FUNDS ACCUMULATED,
INCLUDING INCOME FROM INVESTED FUNDS, FROM THE PAYMENTS SPECIFIED IN
SECTIONS THREE THOUSAND TWO HUNDRED FORTY AND FOUR THOUSAND THREE
HUNDRED TWENTY-EIGHT OF THE INSURANCE LAW SHALL BE DEPOSITED AND CREDIT-
ED TO A SPECIAL REVENUE FUND-OTHER FUND TO BE ESTABLISHED BY THE COMP-
TROLLER. TO THE EXTENT OF FUNDS APPROPRIATED THEREFOR, THE COMMISSIONER
SHALL PROVIDE FUNDING FOR THE PURPOSES OF COVERING THE COST OF THE FIRST
FIVE HUNDRED FIFTY THOUSAND DOLLARS OF PRIMARY MEDICAL MALPRACTICE
COVERAGE OF A PHYSICIAN WHO IS ELIGIBLE TO OBTAIN EXCESS COVERAGE, AS
SET FORTH PURSUANT TO PARAGRAPH (A) OF SUBDIVISION ONE OF SECTION EIGH-
TEEN OF CHAPTER TWO HUNDRED SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED
EIGHTY-SIX.
S 4. The insurance law is amended by adding a new section 3240 to read
as follows:
S 3240. LOSS RATIO PAYMENT. BEGINNING IN CALENDAR YEAR TWO THOUSAND
NINE, IF THE LOSS RATIO FOR AN INDIVIDUAL HEALTH INSURANCE POLICY FORM,
A SMALL GROUP HEALTH INSURANCE OR A LARGE GROUP HEALTH INSURANCE POLICY
FORM IS LESS THAN EIGHTY-SEVEN PERCENT, AN INSURER SHALL PAY TO THE
COMMISSIONER OF HEALTH OR SUCH COMMISSIONER'S DESIGNEE A PERCENT OF THE
AGGREGATE PREMIUM COLLECTED FOR THE POLICY FORM IN THE PREVIOUS YEAR
EQUAL TO THE DIFFERENCE BETWEEN THE MINIMUM LOSS RATIO FOR THE POLICY
FORM STARTED IN THIS SECTION AND THE ACTUAL LOSS RATIO; PROVIDED, HOWEV-
A. 8620 4
ER, SUCH AMOUNTS SHALL BE OFFSET BY ANY AMOUNT REQUIRED TO BE RETURNED
TO POLICY HOLDERS IN ACCORDANCE WITH SECTION THREE THOUSAND TWO HUNDRED
THIRTY-ONE OF THIS ARTICLE. AMOUNTS DUE UNDER THIS SECTION SHALL BE PAID
BY MAY FIRST OF THE YEAR FOLLOWING THE CALENDAR YEAR IN WHICH A LOSS
RATIO REQUIREMENT WAS NOT SATISFIED. THE INSTRUCTIONS AND FORMAT FOR
CALCULATING AND REPORTING LOSS RATIOS SHALL BE THE SAME AS THOSE THAT
APPLY TO SECTION THREE THOUSAND TWO HUNDRED THIRTY-ONE OF THIS ARTICLE.
THE SUPERINTENDENT SHALL HAVE AUTHORITY TO AUDIT DATA, IMPOSE PENALTIES
FOR NONCOMPLIANCE WITH THIS SECTION CONSISTENT WITH AUTHORITY PROVIDED
TO THE SUPERINTENDENT IN OTHER PROVISIONS OF THIS CHAPTER, AND PROMUL-
GATE REGULATIONS TO IMPLEMENT THIS SECTION. SUCH SUMS SHALL BE DIRECTED
TO THE HEALTH CARE ACCESS PROTECTION FUND SET FORTH PURSUANT TO SECTION
NINETY-SEVEN-JJJJ OF THE STATE FINANCE LAW. FOR THE PURPOSES OF THIS
SECTION, THE TERM "LOSS RATIO" SHALL MEAN ALL FUNDS EXPENDED DIRECTLY
FOR THE PURPOSES OF REIMBURSING MEDICAL CARE, INCLUDING CARE PROVIDED BY
PHYSICIANS AND OTHER HEALTH CARE PROFESSIONALS, HOSPITALS, NURSING
HOMES, HOME CARE, PRESCRIPTION DRUGS AND DURABLE MEDICAL EQUIPMENT,
PROVIDED TO INSUREDS COVERED UNDER AN INDIVIDUAL HEALTH INSURANCE POLICY
FORM, A SMALL GROUP HEALTH INSURANCE POLICY FORM OR A LARGE GROUP HEALTH
INSURANCE POLICY FORM, AS A PERCENTAGE OF REVENUE DERIVED BY SUCH INSUR-
ER FOR SUCH POLICY FORM.
S 5. The insurance law is amended by adding a new section 4328 to read
as follows:
S 4328. LOSS RATIO PAYMENT. BEGINNING IN CALENDAR YEAR TWO THOUSAND
NINE, IF THE LOSS RATIO FOR AN INDIVIDUAL DIRECT PAYMENT CONTRACT FORM,
A SMALL GROUP OR A SMALL GROUP REMITTANCE CONTRACT FORM OR A LARGE GROUP
CONTRACT FORM IS LESS THAN EIGHTY-SEVEN PERCENT, A CORPORATION SUBJECT
TO THE PROVISIONS OF THIS ARTICLE SHALL PAY TO THE COMMISSIONER OF
HEALTH OR SUCH COMMISSIONER'S DESIGNEE A PERCENT OF THE AGGREGATE PREMI-
UMS EARNED FOR THE CONTRACT FORM IN THE PREVIOUS CALENDAR YEAR EQUAL TO
THE DIFFERENCE BETWEEN THE MINIMUM LOSS RATIO FOR THE POLICY FORM AS
STATED IN THIS SECTION AND THE ACTUAL LOSS RATIO; PROVIDED, HOWEVER,
THAT SUCH AMOUNT SHALL BE OFFSET BY ANY AMOUNT REQUIRED TO BE RETURNED
TO CONTRACT HOLDERS IN ACCORDANCE WITH SECTION FOUR THOUSAND THREE
HUNDRED EIGHT OF THIS ARTICLE. AMOUNTS DUE UNDER THIS SECTION SHALL BE
PAID BY MAY FIRST OF THE YEAR FOLLOWING THE CALENDAR YEAR IN WHICH THE
LOSS RATIO REQUIREMENT WAS NOT SATISFIED. THE INSTRUCTIONS AND FORMAT
FOR CALCULATING AND REPORTING LOSS RATIOS SHALL BE THE SAME AS THOSE
THAT APPLY TO SECTION FOUR THOUSAND THREE HUNDRED EIGHT OF THIS ARTICLE.
THE SUPERINTENDENT SHALL HAVE AUTHORITY TO AUDIT DATA, IMPOSE PENALTIES
FOR NONCOMPLIANCE WITH THIS SECTION CONSISTENT WITH AUTHORITY PROVIDED
TO THE SUPERINTENDENT IN OTHER PROVISIONS OF THIS CHAPTER, AND PROMUL-
GATE REGULATIONS TO IMPLEMENT THIS SECTION. SUCH FUNDS SHALL BE DIRECTED
TO THE HEALTH CARE ACCESS PROTECTION FUND ESTABLISHED PURSUANT TO
SECTION NINETY-SEVEN-JJJJ OF THE STATE FINANCE LAW. FOR THE PURPOSES OF
THIS SECTION, THE TERM "LOSS RATIO" SHALL MEAN ALL FUNDS EXPENDED
DIRECTLY FOR THE PURPOSES OF REIMBURSING MEDICAL CARE, INCLUDING CARE
PROVIDED BY PHYSICIANS AND OTHER HEALTH CARE PROFESSIONALS, HOSPITALS,
NURSING HOMES, HOME CARE, PRESCRIPTION DRUGS AND DURABLE MEDICAL EQUIP-
MENT, PROVIDED TO INSUREDS COVERED UNDER AN INDIVIDUAL DIRECT PAYMENT
CONTRACT FORM, A SMALL GROUP OR SMALL GROUP REMITTANCE CONTRACT FORM OR
A LARGE GROUP CONTRACT FORM, AS A PERCENTAGE OF REVENUE DERIVED BY SUCH
INSURER FOR SUCH POLICY FORM.
S 6. The insurance law is amended by adding a new section 3224-c to
read as follows:
A. 8620 5
S 3224-C. PHYSICIAN REIMBURSEMENT. (A) IF THE SUPERINTENDENT APPROVES
AN INCREASE IN THE COST OF MEDICAL MALPRACTICE INSURANCE COVERAGE FOR
PHYSICIANS AND SURGEONS, BY SEPTEMBER FIRST OF EACH YEAR IN WHICH SUCH
INCREASE IS APPROVED, A HEALTH PLAN SHALL INCREASE ITS FEE SCHEDULE FOR
PHYSICIAN REIMBURSEMENT BY A PERCENTAGE EQUAL TO OR GREATER THAN A
PERCENTAGE AS DETERMINED BY THE SUPERINTENDENT TO BE THE INCREASE IN
PHYSICIAN OFFICE EXPENSE ALLOCABLE TO THE INCREASE IN THE COST OF A
MEDICAL MALPRACTICE INSURANCE POLICY APPROVED BY THE SUPERINTENDENT FOR
THE POLICY YEAR BEGINNING THE PREVIOUS JULY FIRST. THE SUPERINTENDENT
SHALL HAVE THE AUTHORITY TO ESTABLISH SEPARATE PERCENTAGES BASED UPON
REGION OR SPECIALTY OF PRACTICE.
(B) AN INSURER'S, ORGANIZATION'S OR CORPORATION'S PURPOSEFUL OR KNOW-
ING FAILURE TO INCLUDE SUCH INCREASE IN ITS FEE SCHEDULE FOR EACH PHYSI-
CIAN FOR THE CONTRACT CYCLE NEXT FOLLOWING OR FAILURE TO INCLUDE SUCH
INCREASE IN FUTURE REIMBURSEMENT FOR OUT OF NETWORK SERVICES WILL BE
ASSESSED A MONETARY PENALTY OF ONE MILLION DOLLARS FOR EACH AFFECTED
PHYSICIAN.
(C) NOTHING IN THIS SECTION SHALL BE CONSTRUED: (1) TO PREVENT A
HEALTH PLAN FROM INCREASING ITS FEE SCHEDULE IN A PERCENTAGE GREATER
THAN THE PERCENTAGE AS DETERMINED BY THE SUPERINTENDENT TO BE THE
INCREASE IN PHYSICIAN OFFICE EXPENSE ALLOCABLE TO THE INCREASE IN THE
COST OF A MEDICAL MALPRACTICE INSURANCE POLICY APPROVED BY THE SUPER-
INTENDENT FOR THE POLICY YEAR BEGINNING THE PREVIOUS JULY FIRST; OR
(2) TO REQUIRE THE IMPOSITION OF A DECREASE IN PHYSICIAN REIMBURSEMENT
AS A RESULT OF AN AVERAGE RATE DECREASE FOR MEDICAL MALPRACTICE INSUR-
ANCE COVERAGE APPROVED BY THE SUPERINTENDENT.
(D) FOR THE PURPOSES OF THIS SECTION, A "HEALTH PLAN" SHALL BE DEFINED
AS AN INSURER THAT IS LICENSED TO WRITE ACCIDENT AND HEALTH INSURANCE,
OR THAT IS LICENSED PURSUANT TO ARTICLE FORTY-THREE OF THIS CHAPTER OR
IS CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW.
S 7. This act shall take effect immediately; provided that the amend-
ments to chapter 266 of the laws of 1986 made by section one of this act
shall apply to physician malpractice insurance policies issued on or
after July 1, 2009.