OGC Op. No. 06-08-01
The Office of General Counsel issued the following opinion on August 1, 2006, representing the position of the New York State Insurance Department.
Re: Premium Discount Risk Management Program Regulation 124
When an insured physician has qualified for a premium credit for medical malpractice coverage authorized pursuant to Section 2343(e) of the Insurance Law and Section 152.5 of Department Regulation 124, and the insured physician subsequently allows his or her premium credit to lapse, what type of risk management course must the physician complete in order to have the premium credit reinstated?
When an insured physician allows his or her premium credit to lapse, such physician must complete a risk management follow-up course of at least three hours authorized pursuant to Section 152.6(b)(2) of Regulation 124, in order to reinstate the discount.
With respect to medical malpractice insurance rates, N.Y. Ins. Law § 2343(e) (McKinney 2006) provides that the Superintendent " may approve an appropriate premium reduction for an insured physician who successfully completes a risk management course, which must be approved by the superintendent subject to such standards as the superintendent may prescribe by regulation ".
In implementation of Section 2343(e), 152.5(a) of N.Y. Comp. Codes R. & Regs. tit. 11 Pt. 152 (Regulation 124) permits insurers to file, for approval by the Superintendent, a premium credit of up to five percent for an insured physician who successfully completes "a qualified risk management program". Standards for qualified risk management programs are provided under N.Y. Comp. Codes R. & Regs. tit. 11 § 152.6. Specifically, Section 152.6(b)(1) provides for an initial basic risk management course which must meet the minimum standards required under Section 152.6(c) (which includes a lecture of at least five hours). Pursuant to Section 152.5(b)(1), the premium credit becomes effective on the next anniversary date of the policy following completion of the basic risk management course. Section 152.6(b)(2) provides for a follow-up course which must be taken once every two years after first receiving the risk management premium reduction. The follow-up risk management course must meet the requirements of Section 152.6(e) (which includes a lecture at least three hours in length).
The regulation makes clear that a condition for continuation of the premium discount is that the insured must take the follow-up course once during the two year period after first receiving the credit subsequent to completion of the basic course, and if the insured does not complete the follow-up course, the credit will lapse at the completion of the policy period. The regulation does not specify whether, in the event of such lapse, an insured physician must either complete another five hour basic course or complete a three hour follow-up course in order to reinstate the discount.
Since one of the requirements of Section 152.6(e)(2) is that the follow-up risk management course must "be designed to reinforce the concepts covered in the basic risk management course and to bring to the insureds attention any relevant developments since completion of the basic course;", it is the Departments view that, in order to be eligible for the discount, the regulation does not require an insured physician to complete another basic course when the discount has lapsed due to the failure of the insured to complete the requisite follow-up course within the prescribed two year time period. Rather, it would be consistent with the regulations intent to have the discount re-instated after the insured has completed that which was already required, i.e. the follow-up course, which is designed both to reinforce and augment the principles and education that were originally provided in the initial basic course.
For further information you may contact Supervising Attorney Lawrence M. Fuchsberg at the New York City Office.