N.Y. Comp. Codes R. & Regs. tit. 11, § 70.8 – Physicians medical malpractice liability insurance rates for claims-made and occurrence primary and excess policies and claims-made tail coverage.

(a) Pending enactment of chapter 266 of the Laws of 1986, which was signed into law on July 8, 1986, all physicians medical malpractice liability insurers were directed by the Fifth Amendment to Part 70 of this Title (section 70.8 repealed by the eighth amendment of this Part) that the rates for the policy period commencing July 1, 1986 and ending June 30, 1987 would continue to be, on a provisional basis, the rates last approved by the department for said insurers. All insurers that issued policies of medical malpractice liability insurance, as defined in section 70.1(a) of this Part, and all insurers with special licenses under section 6302 of the Insurance Law that issued policies including such coverage were directed to furnish their insureds with the following endorsement in connection with all such policies in effect on and after July 1, 1986:
"THE PREMIUMS ON THIS POLICY FOR THE PERIOD OF COVERAGE COMMENCING ON OR AFTER JULY 1, 1986 THROUGH JUNE 30, 1987 ARE PROVISIONAL AND ARE SUBJECT TO UPWARD OR DOWNWARD ADJUSTMENT. INSUREDS MAY BE REQUIRED TO PAY AN AMENDED PREMIUM RETROACTIVE TO JULY 1, 1986, OR THE ANNIVERSARY DATE OF THE POLICY, WHICHEVER IS LATER, OR BE ENTITLED TO A CREDIT IF IT IS DETERMINED THAT A DOWNWARD ADJUSTMENT IS NECESSARY IN ORDER TO MEET STATUTORY RATING STANDARDS."

(b) Pursuant to section 40 of chapter 266 of the Laws of 1986, the superintendent was directed to establish rates for policies providing coverage for physicians medical malpractice liability insurance for the periods commencing July 1, 1985 and ending June 30, 1988. The rates established herein for policies issued or renewed during the year July 1, 1985 through June 30, 1986 supersede the provisional rates mandated by section 70.5 of this Part for primary coverage and by section 70.6 of this Part for excess coverage, and interim rate increases, if any, approved by the superintendent for such policy year, and the rates established by prior amendment of this section, where inconsistent with this amendment. The rates established herein for policies issued or renewed during the year July 1, 1986 through June 30, 1987 supersede the rates established by prior amendment of this section, where inconsistent with this amendment. Insurers shall charge a rate for physicians medical malpractice liability insurance only as established by the superintendent.

(1) For the purposes of this Part, the base year occurrence rate shall be the occurrence rate approved for the insurer by the superintendent for policies issued or renewed during the year July 1, 1984 through June 30, 1985, as reduced by the 15-percent downward modification mandated by section 70.5 (c)(1) of this Part.
(2) For any insurer that had no base year occurrence rate as provided in paragraph (1) of this subdivision, but had a claims-made rate approved, the base year occurrence rate shall be the third year claims-made rate approved by the superintendent, as reduced by the 15-percent downward modification mandated by section 70.5(c)(1) of this Part, multiplied by 1.158.
(3) For any insurer that utilized a rate which has not been approved by the superintendent, and for any insurer that has not previously written policies subject to this Part, the base year occurrence rate shall be the approved rate of another insurer, that is most appropriate for that insurer, together with any modification which can be adequately supported. Such rate shall not be used until established by the superintendent.
(d) Rating plans.
(1) For any insurer that utilized a rating plan which has not been approved by the superintendent, and for any insurer that has not previously written policies subject to this Part, the rating plan shall be the approved rating plan of another insurer that is most appropriate for that insurer, together with any modification which can be adequately supported. Such plan may not be used until it is approved by the superintendent.
(e) Occurrence primary and excess coverage rates.
(1) Rates for occurrence policies issued or renewed during the year July 1, 1985 through June 30, 1986:
1. (i) For primary coverage, up to $1 million/$3 million, the rate shall be 14 percent greater than the base year occurrence rate.
2. (ii) For a first excess layer providing $1 million/$3 million of excess coverage above $1 million/$3 million primary coverage the rate shall be 30 percent of the $1 million/$3 million rate for primary coverage established in subparagraph (i) of this paragraph.
3. (iii) For a second excess layer providing $1 million/$3 million of excess coverage above the underlying primary coverage and first layer of excess coverage described in subparagraph (ii) of this paragraph, the rate shall be 20 percent of the $1 million/$3 million rate for primary coverage established in subparagraph (i) of this paragraph.
(2) Rates for occurrence policies issued or renewed during the year July 1, 1986 through June 30, 1987:
1. (i) For primary coverage, up to $1 million/$3 million, the rate shall be nine percent greater than that established pursuant to subparagraph (1)(i) of this subdivision.
2. (ii) For a first excess layer providing $1 million/$3 million of excess coverage above $1 million/$3 million primary coverage, the rate shall be 35 percent of the $1 million/$3 million rate for primary coverage established in subparagraph (i) of this paragraph.
3. (iii) For a second excess layer providing $1 million/$3 million of excess coverage above the underlying primary coverage and first layer of excess coverage, described in subparagraph (ii) of this paragraph, the rate shall be 24 percent of the $1 million/$3 million rate for primary coverage established in subparagraph (i) of this paragraph.
(3) Rates for occurrence policies issued or renewed during the year July 1, 1987 through June 30, 1988:
1. (i) For primary coverage, up to $1 million/$3 million, the rate shall be nine percent greater than that established pursuant to subparagraph (2)(i) of this subdivision.
2. (ii) For a first excess layer providing $1 million/$3 million of excess coverage above $1 million/$3 million primary coverage, the rate shall be 40 percent of the $1 million/$3 million rate for primary coverage established in subparagraph (i) of this paragraph.
3. (iii) For a second excess layer providing $1 million/$3 million of excess coverage above the underlying primary coverage and first layer of excess coverage, described in subparagraph (ii) of this paragraph, the rate shall be 28 percent of the $1 million/$3 million rate for primary coverage established in subparagraph (i) of this paragraph.
(4) The rates for the excess layers apply to policies purchased directly by physicians and to policies purchased by general hospitals on behalf of their eligible physicians, as required by section 19 of chapter 294 of the Laws of 1985 and by section 18 of chapter 269 of the Laws of 1986.
(5) The rates for occurrence excess layer policies providing coverage other than as specifically established herein shall be established by the superintendent after a review of proposed rates and supporting documentation to be submitted by each insurer writing such coverage, in accordance with paragraph (j)(3) of this section. The superintendent shall consider such submissions, as well as any other relevant factors, and will thereafter establish a rate for each such excess layer.
(f) Claims-made primary and excess coverage rates.
(1) Claims-made primary coverage rates. The claims-made rate for a particular primary coverage policy shall be the corresponding occurrence rate multiplied by the appropriate claims-made factor, as follows:
Year in claims-made program Claims-made factor
First: 31%
Second: 64
Third: 85
Fourth: 94
Fifth: 99
Sixth: 102
(2) Optional extended reporting period (tail) primary coverage rates.
1. (i) The rate for optional tail coverage that is required to be offered for a particular claims-made primary coverage policy shall be the corresponding occurrence rate multiplied by the appropriate tail factor, as follows:
  Number of years completed in claims-made program Tail factor
  One: 74.8%
  Two: 122.1
  Three: 146.4
  Four: 162.4
  Five: 173.3
  Six: 181.0
2. (ii) For a policy terminated on a date other than the policy anniversary date, the tail factor shall be obtained by interpolating, on a daily basis, between the tail factors applicable to the last and next policy anniversaries.
3. (iii) For any policy that was written at a reduced rate because the insured was eligible for a new doctor discount, the tail premium shall be reduced by a percentage equal to the percentage that the current year's rate (exclusive of any surplus contributions) was reduced as a result of such new doctor discount.
(3) Rates for claims-made and tail excess coverage policies purchased by hospitals. The aggregate rate for a claims-made excess coverage policy and its simultaneously issued tail (as mandated by subdivision [g] of this section) purchased by a general hospital on behalf of a physician, shall be equal to the corresponding occurrence excess coverage rate.
(4) Rates for claims-made and tail excess coverage policies purchased by physicians directly. The rates for the claims-made and tail first and second excess layers required to be offered when purchased directly by a physician, and the rates for any other claims-made and tail excess layer other than as specified herein, shall be established by the superintendent after a review of proposed rates and supporting documents to be submitted by each insurer writing, or required to write, such coverage, in accordance with paragraph (j)(3) of this section. The superintendent shall consider such submissions, as well as any other relevant factors, and will thereafter establish a rate for each such excess layer.
(g) Excess coverage—types of policies; required tail.
(1) Pursuant to section 19 of chapter 294 of the Laws of 1985, and as established in section 70.7(c) of this Part, excess coverage policies providing $1 million/$3 million of excess coverage above $1 million/$3 million primary coverage, purchased by general hospitals on behalf of physicians, afforded such coverage for “occurrences” between July 1, 1985 through June 30, 1986 and were issued on an “occurrence” basis.
(2) Pursuant to section 18 of chapter 266 of the Laws of 1986, excess coverage policies providing $1 million/$3 million of excess coverage above $1 million/$3 million primary coverage, purchased by general hospitals on behalf of physicians, shall provide such coverage for “occurrences” between July 1, 1986 and June 30, 1987. Accordingly, all physicians medical malpractice liability insurers which issue such an excess policy on a claims-made basis shall simultaneously issue full tail coverage.
(3) Except where required to be issued on a claims-made basis pursuant to section 5504(f), excess coverage policies issued or renewed on and after July 1, 1986 shall provide coverage on either an occurrence or claims-made basis, subject to paragraph (2) of this subdivision, provided that:
1. (i) An excess coverage policy shall be renewed on the same basis (occurrence or claims- made) as it was previously issued, except that the insured may choose to substitute claims- made coverage for occurrence coverage.
2. (ii) If the insured so requests, an excess coverage policy issued by the same insurer that issued the underlying primary coverage shall be issued with the same type of coverage (occurrence or claims-made) as the primary coverage.
(4) The provisions of section 70.7(b)(2) and (d) of this Part continue to be applicable to all medical malpractice liability insurers.
(h) Segregated accounts and surcharge accounts.
(1) Physicians medical malpractice insurers shall establish:
1. (i) policy year segregated accounts for premiums, reserves, and investment income attributable to each policy year period; and
2. (ii) separate surcharge accounts for revenue received from surcharges established by the superintendent.
(2) Reports concerning the segregated and surcharge accounts required by paragraph (1) of this subdivision shall be furnished on a prescribed form as set forth in section 70.9(l) of this Part in accordance with the instructions set forth in section 70.9(m) of this Part.
(3) No transfer shall be made from a surcharge account to a segregated account:
1. (i) unless the segregated account for that policy year falls below $1 million; or
2. (ii) if such transfer increases the segregated account balance, at the end of that policy year, to more than $1.5 million.
(4) No transfers shall be made from any segregated account or surcharge account to the insurer’s unassigned surplus.

Year in claims-made program	Claims-made factor
First:	31%
Second:	64
Third:	85
Fourth:	94
Fifth:	99
Sixth:	102

Number of years completed in claims-made program	Tail factor
One:	74.8%
Two:	122.1
Three:	146.4
Four:	162.4
Five:	173.3
Six:	181.0

(5) Each insurer shall collect and retain or remit any required surcharges, in accordance with the criteria set forth herein, and shall be responsible for determining, with regard to any insured for which it provides primary coverage on or after July 1, 1989, the identity of each insurer that had provided that insured primary coverage with a policy inception or renewal date on or after July 1, 1985, and on or before June 30, 1999:

(i) If the insured has had coverage with a policy inception or renewal date on or after July 1, 1985, and on or before June 30, 1999, from an insurer that is entitled to a surcharge, in accordance with section 70.22(c) of this Part, the surcharge shall be collected from that insured by the insurer that provides coverage on or after July 1, 1999, and shall then be retained by, or remitted to, the insurer entitled thereto.
(ii) If the insured had coverage with a policy inception or renewal date on or after July 1, 1985, and on or before June 30, 1999, from two or more insurers entitled to a surcharge in accordance with section 70.22(c) of this Part, the surcharge shall be collected from that insured by the insurer that provides the coverage on and after July 1, 1999, and shall then be retained by, or remitted to, the insurers entitled thereto in proportion to the number of policy inception or renewal dates for each insurer on or after July 1, 1985, and on or before June 30, 1999.
(iii) If the insured had coverage with a policy inception or renewal date on or after July 1, 1985, and on or before June 30, 1999, only with insurers not entitled to a surcharge in accordance with section 70.22(c) of this Part, no surcharge shall be collected from that insured.

(iv) If the insured did not have coverage on or after July 1, 1985, and on or before June 30, 1999, and is insured on or after July 1, 1999, with an insurer entitled to a surcharge in accordance with section 70.22(c) of this Part, a surcharge shall be collected from the insured by that insurer, and then remitted to the following insurers in the following proportions:

Medical Liability Mutual Insurance Company	55.85%
Physicians Reciprocal Insurers	20.90%
Frontier Insurance Company	5.90%
Group Council Mutual Insurance Company	5.50%
Medical Malpractice Insurance Association	3.45%
HANYS	2.65%
Healthcare Underwriters Mutual Insurance Company	2.55%
Academic Health Professionals Insurance Association	2.00%
Legion Insurance Company	1.15%

(v) No surcharge shall be collected from an insured with a policy inception or renewal date on or after July 1, 1985, and on or before June 30, 1996, from an insurer entitled to a surcharge in accordance with section 70.22(c) of this Part, if the insured has not been insured on or after July 1, 1996, by an insurer entitled to a surcharge.

(6) Any hospital, health maintenance organization or other institution in this State that employs or otherwise is associated with any physician who was insured by an insurer which is entitled to receive a surcharge in accordance with section 70.22(c) of this Part, having a policy inception or renewal date on or after July 1, 1985, and on or before June 30, 1999 and which is responsible for responding in damages for liability arising out of such physician's practice of medicine, shall continue to ascertain the amount of the surcharge to be remitted and remit such amount to that insurer in accordance with section 10 of part JJ of chapter 407 of the Laws of 1999.
(7) Amounts received for a surcharge account shall be allocated in accordance with any deficiencies recorded in the reports required by paragraph (2) of this subdivision. If no deficiencies exist, the amount shall be paid directly into a segregated surcharge account in the proportion that premiums for that year bear to the total premiums for all policies with policy inception or renewal dates on or after July 1, 1985, and on or before June 30, 2000. All surcharge revenues collected by an insurer required to be remitted to another insurer shall be remitted within 90 days of receipt by the first insurer.
(i) Required filings—primary coverage.
(1) All physicians medical malpractice liability insurers were required to file by August 1, 1986 amended rate manual pages with the superintendent in accordance with the primary coverage rates established by prior amendments of this Part. Any such insurer not previously issuing a policy on a claims-made form was required to file such form for approval at the same time.
(2) All such insurers are required to file by December 31, 1986, amended rate manual pages with the superintendent in accordance with the primary coverage rates established by the eighth amendment of this Part.
(3) All such insurers are required to file by July 15, 1987 amended rate manual pages with the superintendent in accordance with the primary coverage rates established by the 10th amendment of this Part.
(j) Required filings—excess coverage.
(1) All physicians medical malpractice liability insurers were required to file by August 22, 1986 amended rate manual pages with the superintendent in accordance with the excess coverage rates established by prior amendments of this Part.
1. (i) All such insurers are required to file by December 31, 1986 amended rate manual pages with the superintendent in accordance with the excess coverage rates specifically established by the eighth amendment of this Part.
2. (ii) All such insurers are required to file by July 15, 1987 amended rate manual pages with the superintendent in accordance with the excess coverage rates specifically established by the 10th amendment of this Part.
(2)
(3) Insurers writing, or required to write excess layers other than for which rates are specifically established herein shall file, by December 31, 1986, proposed rates with supporting documentation. For the policy year 1987-1988, such insureds shall file by July 15, 1987 proposed rates with supporting documentation.
(k) Rate service organization.
(1) A physicians medical malpractice liability insurance rate filed by a rate service organization on behalf of its members and subscribers shall be established in accordance with this section. Any such organization shall make the appropriate rate filing required by subdivisions (i) and (j) of this section by December 31, 1986. For the policy year 1987-1988, such organization shall make the appropriate rate filing by July 15, 1987.
(2) A member or subscriber of a rate service organization may adopt the established rates and approved rating plan filed by the organization if said member or subscriber notifies the department by December 31, 1986 and the department determines that such filing is not inappropriate. For the policy year 1987-1988 the member or subscriber shall notify the department by July 15, 1987 that it is adopting such rates.
(l) Purchasing groups.
The rates and rating plan for medical malpractice liability insurance issued to a purchasing group and its members shall be established in accordance with the provisions of this Part, except that, where the insurer and the purchasing group have complied with all applicable provisions of the LRRA, if an insurer submits rates or a rating plan affording advantages, based on the purchasing group's loss and expense experience, not afforded to other persons, the superintendent shall review such submission, and thereafter establish rates or a rating plan, as appropriate, reflecting such advantages. Any such insurer shall file by July 15, 1987 proposed rates adequately supported.
(m) Required filing—rating plans.
(1) All physicians medical malpractice liability insurers shall file with the superintendent by August 15, 1987 adequate support for their rating plans (as defined in this Part, but excluding the merit rating plan). Such insurers shall include actuarial data and other relevant considerations.
(2) Any insurer who has adopted the rating plan of another insurer, pursuant to subdivision (d) of this section, may instead submit to the superintendent a statement to that effect. Such statement will be deemed to be compliance with paragraph (1) of this subdivision.