Pa. Approves New Med-Mal Insurer

January 26, 2005

A new physician liability insurance company has been established in northeastern Pennsylvania.

Officals at Northeast Physician Risk Retention Group, Inc. said they organization has been approved in Pennsylvania to offer medical professional liability insurance to physicians and surgeons of all recognized specialties in a 10-county area of northeastern Pennsylvania including Lackawanna and Luzerne Counties. Surrounding counties include Bradford, Carbon, Columbia, Monroe, Pike, Susquehanna, Wayne, and Wyoming
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There are approximately 25 hospitals and 2,100 physicians located in the region.

Community Medical Center, Scranton, in response to concerns created by the on-going medical malpractice insurance crisis in Pennsylvania, played a key role in the development and capitalization of NEPRRG.

“I am pleased CMC participated in the creation of NEPRRG because it presented a great opportunity to work with local physicians and to be able to help the greater community by making Northeastern Pennsylvania a more hospitable place for physicians to practice,” said C. Richard Hartman, M.D., president and CEO of CMC. “NEPRRG is not only a locally-owned and controlled insurance vehicle, but an innovative one as well because it employs a rigorous risk and claims management program that will help to prevent events from becoming lawsuits and help to hold down premium costs,” he added.

In recent years, physicians across the U.S. have experienced a medical malpractice insurance crisis as their premiums have skyrocketed. Physicians say the crisis has been especially severe in Pennsylvania. Several insurers became insolvent, some stopped writing new policies, others established stricter underwriting policies and increased malpractice insurance premiums dramatically. Others left Pennsylvania altogether. According to physicians, some doctors in high-risk specialties have elected to leave for other states with more favorable insurance climates, or are limiting the types of services they offer.

CMC provided the required initial capital to NEPRRG to permit it to operate in Pennsylvania. As physicians join NEPRRG and pay their own capital contributions to become policyholders, the physician capital will replace the CMC-advanced “bridge” capital
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Other factors that founders hope will help to hold down premium costs are the location of the physicians in the 10-county northeastern Pennsylvania area, thus excluding higher risk locations.

Information on the risk retention group is available at www.neprrg.com.

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