New Jersey Banking and Insurance Commissioner Holly Bakke has ordered Zurich America to roll back rates reportedly found to be “excessive” in a Department review, a move that will save thousands for the affected physicians and preserve access to health care.
Bakke issued an order that will bring refunds for some physicians and ensure that others are not charged inappropriate rates. New Jersey law gives the Commissioner the power to intervene when rates are found to be “excessive.”
“Today’s action shows that the Department of Banking and Insurance will continue to use its regulatory authority to protect policyholders and hold companies accountable,” Bakke said.
The order states that:
*Zurich must cease and desist from billing a base rate increase of 108 percent for its physicians and surgeons professional liability program in 2003;
*The carrier must implement an immediate rate rollback to no more than a 30 percent base rate increase and notify all affected policyholders; those who have overpaid will receive refunds;
*Rate increases cannot exceed 30 percent to those policyholders who will be billed in 2003.
The Commissioner acknowledged the difficult conditions in the medical malpractice insurance market, but she stressed that the Department of Banking and Insurance would continue to be vigilant in monitoring companies. “Though there have been increased payouts and a decline in the investment market, this does not mean inappropriate rates will be tolerated. We expect insurance companies doing business in New Jersey to play by the rules and follow our laws.”
According to the Department’s review, Zurich raised rates for 48 percent of its healthcare providers by more than 30 percent; including 60 percent of its obstetricians. This reportedly was far above the rest of the marketplace, which overall raised rates above 30 percent for only 7.44 percent of all providers, including 21 percent of obstetricians.
The Department’s action is the latest in a series of regulatory actions taken to protect medical malpractice policyholders. Previously, the Commissioner ordered the state’s malpractice carriers to offer physicians a series of coverage options that, if exercised, would result in lower premiums. In addition, the Department of Banking and Insurance expedited its approval process to admit three new carriers into the marketplace, assuring availability. The Department also developed a Marketplace Assistance Program to directly assist those doctors having trouble finding coverage
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