Special Fund Could Help Insure Doctors

DETROIT -- Doctors unable to get medical malpractice insurance through normal channels could be insured by a special backup fund, a group of maverick state insurance commissioners agreed during a day-long meeting here Monday. The "shirt-sleeves" meeting was called by Michigan Insurance Commissioner Daniel J. Demlow. Attending were insurance commissioners from New Jersey, North Carolina and Arkansas. Members of the group have professed their impatience with the "slowness" of the National Associátion of Insurance Commissioners in dealing with problems of professional liability insurance. Most of Monday's meeting focused on ways to establish malpractice insurance funds called "reinsurance facilities." As envisioned by Demlow, such a fund in Michigan would be made up from contributions by all companies that sell malpractice insurance in the state. In a plan proposed for New Jersey, any I company that sells general liability inI surance in the state and malpractice inI surance anywhere in the United States I would have to participate to the reinsurI anee facility pool. A company would have join tKeT New JerseHund Wen if it didn't sell medical malpractice insurance in the state. Demlow said such a requirement could be added to the Michigan plan but that it isn't included now. Problems with availability of malpractice insurance have troubled Michigan doctors for months. One company, Shelby Mutual, last month announced it was cancelling all its medical malpractice insurance coverage in the state. The company insures about 20 per cent of Michigan's medical doctors. After being given a large rate increase, Shelby agreed to continue covering doctors in the state for at least six months. Three other companies that insure Michigan doctors, Medical Protective, Aetna Casualty and Surety and St. Paul Fire and Marine, also agreed to stay in the state for at least six months at the -request oï Demlow's office. The moratorium on insurance cancellations ends in June. Demlow said his office is trying to find solutions to the insurance availability problem by that time. "You could say creation of a reinsurance facility is the way we're planning to go now," Demlow said at Monday's meeting. ,,.__ Under such a plan doctors would 1 tinue to buy insurance from a private ' surance agent. The insurance would be written on one of the companies selling medical malpractice insurance. If at some point the company decided it no longer wanted to insure a specific doctos it could "cede" his coverage to the reinsurance facility. The facility would be created by statute and opérate as a non-profit corporation. All maalpractice insurers in the state would pay into its reserve fund for payment of claims. Doctors insured by the facility would be assessed an additional amount each year. They would also have to pay a certain amount of any settlement made against them. This amount would be established in the form of a "deductible" like that used in many auto insurance policies in which the driver agrees to pay the first $50 or more of an accident claim. Demlow's plan may also include provisión for binding arbitration of all malpractice suits. The arbitration would be binding in cases where settlements are less than a predetermined "threshold amount." In settlements that exeeed the threshold amount, the cases could go oñ to courtroom litigation. Demlow and members of his staff seemed concerned about doctor apathy under a reinsurance facility concept. For this reason their proposal would include j l billing of all Michigan doctors when