Three groups apply for malpractice permission

Monday, April 22, 2002 | 9:58 a.m.

CARSON CITY -- One group has been approved and two others have applied to state Insurance Commissioner Alice Molasky-Arman to start soliciting investors and shareholders to begin medical malpractice insurance companies.

In addition, 101 doctors have applied to be covered for malpractice by the newly created Medical Liability Association of Nevada, a quasi-state organization.

The association's board of directors meets in Las Vegas today to set rates for doctors and underwriting standards on which physicians will be accepted.

Molasky-Arman said she has approved one group, Nevada Mutual Insurance Co., to start soliciting investors and shareholders to begin a private medical malpractice company in the state. The incorporation papers were filed in the Secretary of State's Office by Las Vegas attorney James Wadhams.

Wadhams said the group is an association of Las Vegas doctors who want to form their own insurance company. They have hired a firm called Trean Co., which is experienced in the medical malpractice business.

Wadhams expects the group to file an application within the next two weeks to be licensed as a mutual insurance company, with the doctors becoming the owners.

The officers of the would-be company have not been selected yet, Wadhams said.

The other two applicants are Physicians Mutual Insurance Co. and Physicians Insurance Co. of Nevada. Physicians Mutual has reserved its name with the Secretary of State but has not yet filed papers of incorporation.

Larry Matheis, executive director of the Nevada State Medical Association, said Dr. Lonnie Hammargren, a former lieutenant governor, is a leader of the Physicians Mutual Insurance.

There is no record of Physicians Insurance Co. of Nevada in the Secretary of State's Office.

Matheis said a fourth group of doctors is talking about forming a private company.

The state's liability company "seems to be right on course" although it hasn't set rates or underwriting standards, Matheis said.

And the private marketplace seems to be working, he said.

The medical association, he said, has now shifted its focus from the medical malpractice insurance to its agenda for the next Legislature.

In another development, Molasky-Arman said she has ordered TRG Marketing LLC to stop selling unauthorized health insurance polices in Nevada.

TRG marketed its health plans as a federal ERISA plan, alleging it is exempt from state regulations and that employers could offer the plan to workers at greatly discounted premiums.

She said Florida, Kentucky and Hawaii have already taken disciplinary action against TRF for operating in their states without a license.