Firm selected to manage malpractice association

Chris Jones

Monday, April 8, 2002 | 11:12 a.m.

With a deadline to provide emergency malpractice insurance to Nevada's medical personnel by April 15 rapidly approaching, the board of directors of the Medical Liability Association of Nevada on Friday selected the American Governmental Risk & Insurance Programs (AMGRIP) to act as the association's management company.

A subsidiary of the New York-based Marsh & McLennan, AMGRIP will direct the association's underwriting, risk and claims management, policy administration and other tasks daily tasks required to operate an insurance provider.

Financial details of the agreement were not finalized, but AMGRIP representatives had said Thursday that, if selected, their company would take the unusual step of operating without a contract for several days so it could meet the state's self-imposed deadline to provide initial coverage by next Monday, when many doctors' current policies are set to expire.

"We're ready to get started ... so we don't waste any time getting this off the ground," Bradley Harmes, a senior vice president with AMGRIP, said Thursday.

Robert Byrd, a Reno-based insurance executive who was named association chairman Thursday, and fellow board member Richard Jost, a Las Vegas-based attorney, plan to negotiate a short-term contract with AMGRIP before the board's next meeting Thursday in Las Vegas.

Harmes said last week an initial contract would likely cost the association about $1,500 per day, although its specific service requirements could prompt a change in that amount during upcoming negotiations.

At the request of Gov. Kenny Guinn, Nevada's Board of Examiners last month approved the transfer of $250,000 from the state's emergency fund to cover the initial costs of launching the association. Once its responsibilities are more defined, Byrd said the association is likely to use a portion of premiums collected to finance a long-term management deal with AMGRIP.

"It wouldn't make sense to set up anything long-term now because we still have no idea if this association is going to (insure) 100 doctors or 1,000 doctors or more," Byrd said. "How much (AMGRIP's services) will cost is still undetermined, but we hope to have a better idea when we meet again (this) week."

AMGRIP was selected over Sobieski & Bradley Inc., the only other candidate that made a formal proposal. Members of the state Division of Insurance said initial inquiries were made with several management companies, but most said they could not meet the state's deadline.

After the board heard AMGRIP's proposal Thursday afternoon, Byrd moved to delay any decision until Friday in order to allow Sobieski & Bradley's representatives to make their presentation on Friday.

"It's imperative at the outset we choose the right company to do this because it's a key part of this association," Byrd said of the delay. "If there are more companies we can consider, at this early stage I think it's incumbent we do that."

In the end, however, AMGRIP's experience handling similar medical malpractice insurance operations in other states won the board's favor. The company was created more than 15 years ago to specifically manage insurance pools launched by government agencies and currently oversees medical malpractice insurance programs on behalf of New Hampshire, Rhode Island, South Carolina and West Virginia, Harmes said.

"The depth of their organization and their experience in other states was impressive," said Byrd, who added the insurance commissioners from New Hampshire and West Virginia had contacted Nevada officials to express their satisfaction with AMGRIP's management.