Physicians’ Reciprocal Insurers is in the news again, great article in the Times Union. Physicians in New York need to clearly understand the financial health of their medical malpractice insurance carrier or they could be left hoping the state of New York providers coverage.
One person with knowledge of the Department of Financial Services’ workings told the Times Union that the release of a negative report might cause doctors who currently use the insurer to flee to other companies. That scenario — similar to a Depression-era run on a bank — could throw PRI into turmoil.
In the context of the Skelos trial, the agency’s failure to release the reports “does look really bad, like someone’s got something to hide,” the person said.
PRI’s annual reports with the National Association of Insurance Commissioners have consistently indicated financial problems. In 2014, it reported having $86 million more in liabilities than in assets.
That same year, PRI paid $250,000 to four Albany lobbying firms. “Financial Reporting” was listed as a priority for legislative needs for PRI in a disclosure form; the firm’s lobbyists in the past have pushed for changes in the state’s accounting methods that would tend to enhance PRI’s shaky balance sheet.
Under New York law, state regulators are required to conduct deep, months-long examinations probing the books of medical malpractice insurance companies every five years. But since 1997, regulators have not publicly released any report detailing the results of fiscal checkups on PRI. The Department of Financial Service, created in 2011 through the merger of the state agencies that oversaw banking and insurance, refused to explain why neither the agency nor its predecessor, the state Insurance Department, have released the results of its PRI examinations for nearly two decades.
“I can’t speculate on why they haven’t been posted (online),” said the agency’s spokesman, Ron Klug.
PRI’s annual financial statement for 2014, in fact, says that no examination report has become “available” from New York government since 1996.
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