Virginia regulators stopped paying the malpractice claims of hospitals insured by Reciprocal of America, Glen Allen, Va., and ordered the malpractice carrier to be liquidated because it has more than $200 million in debt. "Given the updated financial picture, the uncertainties regarding potential future claims liability are so great there was no choice but to stop paying hospital malpractice claims," Virginia Insurance Commissioner Alfred Gross said in a written statement. Reciprocal is licensed to operate in 40 states and the District of Columbia, although most of its business is concentrated in Alabama, Kentucky, Mississippi, Missouri and Virginia. The company covered about 2,100 doctors and 20 hospitals in Virginia. Reciprocal was ordered into state receivership in January, after losing $88 million in 2001 and $12 million in 2000. Subsequently, Tennessee regulators seized three risk retention groups that had the same management as Reciprocal and that reinsured virtually all of their business with the Virginia company. -- by Laura B. Benko
Va. orders end of malpractice carrier Reciprocal
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