AMC/NOMA voiced support for Insurance Director Ann Womer Benjamin’s legislative request for standby authority to create a state-operated medical malpractice joint underwriting association in the event the existing "volatile" commercial market "takes a dive." The Ohio State Medical Association also voiced their support. However, insurance and hospital associations are waiting to see reviewed the proposal.

The department is asking legislators to authorize the director, based on a trigger mechanism reflecting deteriorating market conditions, to operate a medical malpractice insurance company financed with premiums of physicians and hospitals buying coverage from it. Capital also would come from $12 million left over from a previous JUA that stopped writing policies in 1980. That money otherwise would go to the Department of Job and Family Services. The new JUA would be similar to one established in 1975 that stopped writing policies in 1980 after market conditions improved. "I need the flexibility to move quickly if things take a dive," Ms. Womer Benjamin said in written testimony delivered to the committee.

There are five major medical malpractice insurance companies that provide coverage for 72% of the Ohio market at present. The only Ohio-based insurer, the OHIC Insurance Company (for the Ohio Hospital Insurance Company), was downgraded in its financial rating by A.M. Best to a B last summer. Ms. Womer Benjamin said the rating slip puts OHIC "at serious risk for being able to insure doctors at Ohio’s hospitals, which generally require an A rating. OHIC got a general grace period to December 31, 2003 to stabilize its situation." The insurance director said that within the last three weeks, the rating of Medical Protective was downgraded because premium growth was outpacing surplus growth, and A.P. Capital announced "a significant loss and its share price dropped 38 percent."

The department said Medical Protective writes about 21% of the malpractice coverage in the state; Medical Assurance, 20%; OHIC, 18%; American Physicians, 7%; and Doctors’ Company 6.5 percent.

Rates increased an average of 30% this year, although some sections of the state experienced higher increases particularly in medical specialty areas. If current writers of malpractice insurance choose to exit Ohio availability could become an issue instead of affordability.

AMC/NOMA sent comments to ODI expressing concerns on how the establishment of the JUA would be funded and where the funds would come from.

Meetings on the JUA proposal continue and the AMC/NOMA lobbyist is attending the meetings on our behalf.