Thursday, July 31, 2003 | 11:15 a.m.
CARSON CITY -- A company that insures 58 doctors for medical malpractice is pulling out of Nevada, but these physicians should not have too much trouble finding other coverage, state officials said.
Medical Insurance Exchange of California has notified its physicians last Friday it is ending its coverage as of Feb. 1 when all the policies expire.
Medical Insurance Exchange of California's board, made up of physicians, had to make a business decision, Ron Neupauer vice president of underwriting said.
"They didn't take the decision lightly," he said.
Neupauer said the company came to Nevada in 1977 when doctors where having problems finding insurance. But large settlement in the mid 1990s, he said, have caused rates to increase and Medical Insurance Exchange of California's presence in Nevada to deminish.
He added that the board has not been encouraged by the legislation's attempts at reform.
State Insurance Commissioner Alice Molasky-Arman said today the company has collected $31 million in premiums but it has paid $39.5 million in claims. She said the firm also paid $8.3 million in the state premium tax and in reinsurance coverage.
"They had a $20 million gap between what they were spending and their income," she said.
Medical Insurance Exchange of California had "strict underwriting standards" and they covered "fairly good doctors," Molasky-Arman said. "The majority of policy holders will not have any difficulty in finding replacement coverage."
Neupauer said the company wanted to give it's clients enough time to find a new insurer and has provided contact information for other Nevada carriers.
"We wanted to help them find a home," he said.
Bob Byrd, president of Medical Liability Association of Nevada, said Medical Insurance Exchange of California was a "class company." He said the doctors covered under that policy would "presumably be insurable" by his company, which was created by the state during the medical malpractice crisis.
Medical Liability Association now covers 618 doctors. There are more than 4,000 physicians in the state.
The insurance division says there are nine other licensed insurance companies that include the Medical Liability Association. In addition, there is surplus line coverage available to doctors who have been turned down by three licensed companies. And there are risk return groups that are federally authorized companies that can write insurance but are not under the Nevada regulation.
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