Florida doctors who had medical malpractice coverage with the former Caduceus Self Insurance Fund Inc. could potentially see reimbursements for assessments they paid to bail out the financially impaired company after a jury found the defunct company is owed nearly $18 million from a company that assumed some of the business.
Caduceus, a Florida-domiciled medical malpractice insurer, was ordered into state receivership in January 2000. Prior to being placed into receivership, Caduceus entered a contract with The Doctor’s Company to be paid for policyholders who switched to TDC. A jury found TDC owes Caduceus $17.9 million under that contract. TDC has appealed the decision.
“We take our job very seriously to recover every asset that can go toward making affected Floridians whole,” Tom Gallagher, Florida’s chief financial officer. Gallagher oversees the Department of Financial Services, which includes the Division of Rehabilitation and Liquidation. The judgment is one of the largest ever for a company in rehabilitation or liquidation with the department.
The department determined about two-thirds of the doctors formerly with Caduceus, which operated only in Florida, elected to obtain coverage through Napa, Calif.-based TDC. When department accountants looked at the contract language and what had been paid by TDC, they concluded Caduceus had been shortchanged, and as receiver the department brought a lawsuit to recover what TDC was believed to owe Caduceus.
Caduceus’ policyholders were assessed fees to make up Caduceus’ shortfall. The judgment would first be used to pay any claims against physicians who were former members and pay off creditors. Gallagher said any remaining funds will be used to reimburse physicians’ assessments.
The Division of Rehabilitation and Liquidation plans, coordinates and directs the conservation, rehabilitation and liquidation of insolvent insurance companies, unlicensed insurance companies and unlicensed insurance entities and rehabilitates financially troubled insurance companies.
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