New malpractice group begins taking applications

Cy Ryan and Chris Jones

Monday, April 15, 2002 | 9:41 a.m.

Doctors' Info

Doctors who want more information can contact American Governmental Risk & Insurance Programs of Houston at (800) 284-4747, ext. 2277, by fax at (713) 652-2216, by mail at 333 Clay St., Suite 1215, Houston, TX 77002-4005 or by e-mail, mlan@amgrip.com. Applications can be downloaded at the state Insurance Division's website (www.doi.state.nv.us).

Capping a whirlwind month that saw the Medical Liability Association of Nevada go from concept to reality, the state's newly formed essential insurance association began today accepting applications from Nevada's medical personnel.

Initial rates will be 80 percent of what was charged by St. Paul Cos., which is withdrawing from the market, State Insurance Commissioner Alice Molasky-Arman said.

St. Paul covered 40 percent of the state's doctors, and its decision to get out of the medical malpractice business touched off a crisis. Gov. Kenny Guinn responded by establishing the Nevada Liability Association of Nevada to provide essential insurance.

Molasky-Arman said she expected 40 to 50 applications from doctors whose present coverage expires May 1.

She said she hoped the applications can be reviewed and approval given within a week. If the Nevada Liability Association accepts the physician, the coverage is good from the date the application was submitted.

The association's board of directors last week chose the American Governmental Risk & Insurance Programs of Houston to operate the company. Final details of the contract are not worked out.

American Governmental Risk is a subsidiary of the New York-based March & McLennan. It will handle underwriting, risk and claims and other management duties.

The state Board of Examiners Friday approved $250,000 to get the system off the ground. Deputy Insurance Commissioner John Orr said $50,000 would be paid to the association on April 30 and another $50,000 on May 31.

Doctors will pay a $5,000 fee to apply. Applications for retroactive acceptance will cost $10,000.

Orr said all doctors will be accepted at the lowest rate in a five-step premium scale. For instance, an insurance division document distributed in March showed the average beginning rate for a cardiovascular surgeon at $22,636 in Clark County, rising to $70,737 in the fifth year.

For those who specialize in OB/GYN, the rate starts at $36,163 and jumps to $113,008 in the fifth year.

Orr said the rates go up as the exposure to malpractice suits increases.

But Orr said doctors who apply to the state system will have to pay "tail" premiums to St. Paul Cos. to cover negligent acts in the past. The doctors will spread the payments over time.