OGC Op. No. 07-07-27
The Office of General Counsel issued the following opinion on July 26, 2007 representing the position of the New York State Insurance Department.\
RE: Medical Malpractice Reporting Requirements
Does a risk retention group, which is not domiciled in New York but is registered in New York to issue liability insurance in New York pursuant to the Liability Risk Retention Act (“LRRA”), codified as 15 U.S.C.A § 3901 et seq. (West 2001), have a claim reporting obligation under Insurance Law
§ 315(b)(1) for medical malpractice policies?
Yes. In accordance with the language of Insurance Law § 315(b)(1), since the risk retention group “is engaged in issuing medical malpractice insurance,” it has a claim reporting obligation.
The inquirer reports that his company is a risk retention group that is domiciled in a jurisdiction other than New York and has registered in accordance with Insurance Law § 5904 provide professional liability coverage to New York anesthesiologists. While the company has heretofore submitted reports pursuant to Insurance Law § 315 to the Commissioner of Health, it now asserts that the company has no such statutory obligation.
Insurance Law § 315, which is the subject of the inquiry, mandates reporting of information on medical malpractice claims. The statute provides:
(b)(1) Each insurance company engaged in issuing professional medical malpractice insurance in this state [and] the medical malpractice insurance association shall file with the superintendent and with the commissioner of health quarterly reports on all claims for medical malpractice made against any of its insureds and received by it during the preceding three month period . . . .
(2) Each hospital, as defined in article twenty-eight of the public health law, which, and each health care practitioner licensed, certified or registered pursuant to the provisions of title eight of the education law who, is self-insured for professional medical malpractice or is insured for professional medical malpractice with an insurance company not licensed to do business in this state shall also file quarterly reports with the superintendent and the commissioner of health on all claims for medical malpractice made against him, her, or it during the preceding three month period. . .
. . .
(f) Any report or information furnished or compiled pursuant to this section shall be deemed to be a confidential communication. . . . Reports required by subsection (b) hereof shall not be open for review or be subject to subpoena except by a public agency or authority of this state.
(g) Malpractice insurance compliance reporting requirements. The failure to make any report required by this section shall constitute a misdemeanor. The department of health shall oversee the enforcement of this subdivision, . . . .
The relevant predecessor to Insurance Law § 315, Insurance Law § 335 was enacted as part of the first major reform of the medical malpractice system, 1975 N.Y. Laws 109, and was intended to provide both agencies - the Insurance Department, to secure complete claims experience for rating purposes, and the Health Department, for disciplinary purposes - with relevant data concerning medical malpractice claims, where the physician or hospital was insured by a New York insurer or anticipated paying for such claims in another manner.
By agreement between the Commissioner of Health and the Superintendent of Insurance, entities subject to Insurance Law § 315 may fulfill their reporting obligation by submitting the required information to the Health Department, which then can furnish information as requested to the Insurance Department.
The LRRA, which was enacted by Congress after New York enacted its medical malpractice reporting requirement, was designed to enable insureds to secure liability insurance from insurance companies that the insureds formed. These insurers are known as risk retention groups. The LRRA pre-empts the ability of states to prohibit risk retention groups from issuing liability insurance to their members.
A risk retention group not domiciled in New York may issue liability insurance policies in New York to New York risks in accordance with 15 U.S.C.A. § 3902(a), provided that such group registers with the Superintendent in accordance with Insurance Law § 5904.
The Department recognizes that by its plain terms, Insurance Law § 315(a) specifically applies to “authorized” insurers. But since the Legislature in Insurance Law § 315(b)(1) used the term “engaged in issuing”, the Department is of the view that the Legislature did not intend to limit the reporting obligation of Insurance Law §315(b) to “authorized” insurers alone. Thus, the Department’s reading of Insurance Law § 315(b)(1) leads to the conclusion that insurers “engaged in issuing” medical malpractice policies, whether or not the insurer is authorized by New York, have an obligation to report. While this might result in reporting by a health care practitioner insured by an unauthorized insurer that already reports in accordance with Insurance Law § 315(b)(2), the burden on the practitioner is nonetheless minimal. For public policy reasons, it is reasonable to construe Insurance Law § 315 to require an over-inclusive rather than an under-inclusive degree of reporting.
Accordingly, the obligation to report pursuant to Insurance Law § 315(b) by insureds of a risk retention group resides both with the risk retention group and with the hospital or physician insured by the risk retention group.
For further information you may contact, Principal Attorney Alan Rachlin at the New York City Office.