Almost 500 West Virginia doctors may have to pay malpractice claims of more than $1 million out of their own pockets now that their carrier has lost its reinsurance, according to the carrier's parent company, Birmingham, Ala-based ProAssurance Corp.
But ProAssurance officials say its subsidiary, Medical Assurance of West Virginia, is in discussions with other reinsurers for coverage that, once finalized, would probably require premium hikes for insured physicians.
ProAssurance spokesman Frank O'Neil tells Modern Physician that another ProAssurance subsidiary, The Medical Insurance Co., has been providing reinsurance to the West Virginia company, but rising malpractice verdicts caused it to stop coverage.
He says the change will affect any policies in West Virginia that are started or renewed after Wednesday.
O'Neil acknowledges that West Virginia policyholders would be temporarily liable for claims of more than $1 million but says that since malpractice cases take a while to resolve, a new reinsurer probably would be found before any payments had to be made.
He adds that Medical Assurance of West Virginia has $10 million in capital and will meet the statutory tests for capital adequacy up to the $1 million limit. Meanwhile, he says, the company will also start discussions with West Virginia authorities about future plans.
ProAssurance bills itself as the fourth largest writer of medical professional liability insurance in the nation, licensed to write business in more than 45 states.
In a statement, ProAssurance says the change in West Virginia, which accounts for less than 2% of its book of business, has no effect on consolidated financial results of the parent company. ProAssurance says it has $2 billion in assets and $495 million in annual gross written premiums.