Oklahoma Insurance Commissioner Carroll Fisher announced that officials with Physicians Liability Insurance Co. (PLICO) and Hospital Casualty Co. have signed agreements placing the two companies under formal supervision by the Oklahoma Insurance Department.
The move comes after months of on-site monitoring by the department, and was necessitated by the companies’ financial status. Both companies write medical malpractice insurance—PLICO for physicians and Hospital Casualty for hospitals. Together they account for nearly 72 percent of the premiums written in Oklahoma for medical malpractice insurance.
Fisher said both companies are paying current bills in a timely fashion, but that the action was necessary for the long-term survival of the companies.
“Many claims made against medical malpractice insurance policies last for several years,” Fisher said. “We need to make sure the companies are financially healthy, not only today but even 20 years from now.
“Obviously, with the impact these companies have on the medical community in Oklahoma, we must be cautious in anything we do,” Fisher said. “We felt this was the most prudent step to take at this time.”
In recent months, Fisher has approved significant rate increases for both companies. He noted the state’s third largest writer of medical malpractice insurance has requested it be allowed to more than double its rates, and that increase is being studied.
Under the supervision, the companies are required to provide a rehabilitation plan to the Oklahoma Insurance Department. In addition, the companies must get the insurance commissioner’s approval to enter into certain contracts, such as transfers of property, mergers with other companies or reinsurance agreements.
Fisher said he expects the companies to be fully rehabilitated so that the formal supervision can be discontinued. No target date for removal of the supervision has been set.
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