Click on the question to view answers to the most frequently asked questions about professional liability coverage for the physicians and health care providers.

How important is an A. M. Best rating?

A rating from A. M. Best is viewed as an indication of a carrier’s financial fitness. For that reason, PCA is currently involved in discussions to secure our own. However, the mere existence of a rating should neither be presumed to imply a guarantee of a company’s health nor an assurance that a carrier’s underwriting appetite will remain whatever it is at the moment. There are too many examples of “A” rated companies that either fell into bankruptcy or abandoned the marketplace altogether. For those reasons, an equally important examination should be the relationship of the carrier to its reinsurer(s).

Is your company supported by a reinsurance arrangement?

The Association has always purchased reinsurance for its own account, as a hedge against catastrophic loss. Originally purchased on a quota-share basis, since 2008 that purchase has been made under an excess of loss arrangement. We have always partnered with highly rated reinsurers and that continues to be the case in 2014. Effective January 2014, SCOR Re and XL Re, both rated “A” by A. M. Best and “A+” by Standard & Poors, equally quota share our excess of loss treaty. Between them, they have policyholders’ surplus of more than $2.8 billion.

In the event of a claim, will I have input regarding legal representation or will the carrier dictate which law firm I use?

Our Claim professionals will certainly make assignment recommendations based on the jurisdiction where the allegation is being made as well as the type of case. But we always listen to our policyholders and, working from our approved panel, try to find a compatible match between physician and attorney.

Can the carrier settle my claim without my consent?

Under PCA’s General conditions, Item 2, Settlement of Claims, the policy clearly states that “the Company will not settle any claim without the insured’s consent”. (Note – You should be aware of other policy forms in the market which appear to provide the same feature, but instead, significantly modify it. That is, the insured will be responsible for any amount above the value the carrier establishes as a settlement, in the event the insured withholds his or her consent. This is sometimes referred to as a “hammer clause”.)

Can the carrier accommodate both Claims Made and Occurrence forms of coverage?

Historically, PCA had only offered Claims Made coverage. But effective May of 2013, we introduced an Occurrence form and from that time forward, approximately six (6%) percent of our new business premium volume has been generated from the Occurrence product. And to round out our portfolio in this regard, we have also developed a conversion product (effective January 15, 2014) which will allow Claims Made policyholders to migrate over to an Occurrence policy form.

Normal Claims Made premium comparisons are easy to make. How much consideration should be given to Tail premium calculations?

It certainly should not be overlooked. Because of all the Claims Made capacity available in the marketplace, there are not as many Tail purchases required as one might be lead to believe. But when making a Claims Made buying decision, it is important to know what Tail factors the contemplated carrier uses and whether their Tail is calculated from the premium on the policy (discounted) or from manual premium. PCA is one of the few carriers whose Tail charges are calculated from discounted premiums. The differences can be dramatic.

Does the carrier offer claims and risk management services as part of the insurance product, or are these unbundled at a separate cost?

PCA policyholders have access to very aggressive claim and risk management services at no additional cost. However, insureds may also engage our risk management partner – EMMI Solutions – to supplement what is provided by PCA at the modest subscription cost of $750/physician annually. In return for completion of the annual program, PCA will provide a $1000 discount off the next year’s premium renewal. Preview what EMMI has to offer by using the following link: www.emmisolutions.com

Has the carrier, in its history ever left any jurisdiction or terminated writing new business for any reason?

The underwriting mission at PCA has been to help restore a level of confidence and stability for the Pennsylvania physician community. Our strategy, therefore, has been to establish a competitive but sustainable rating structure. We think we’ve been successful in this regard — our growth and results bear that out — and we do not foresee a scenario where we will either have to cease writing new business or pull out of a jurisdiction.

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