New Jersey Department
|For Immediate Release: July 22, 2003||
For Further Information:: Mary
Commissioner of Banking and Insurance Calls For A Hearing
On Availability of Medical Malpractice Reinsurance
TRENTON- Commissioner Holly C. Bakke of the Department of Banking and Insurance today called for a hearing to determine the availability of medical malpractice reinsurance in the New Jersey marketplace. Her announcement follows a notification by Princeton Insurance Company of its intention to temporarily suspend the writing of new policies effective August 21, 2003.
Over the last year, despite the difficult market conditions, Princeton remained a committed player in the New Jersey marketplace. As other carriers exited the market and qualified New Jersey physicians lost their professional liability insurance, Princeton absorbed a considerable amount of that business. As a result of these efforts, Princeton's book of business currently consists of 53 percent of the New Jersey marketplace. Along with this growth over the last year, Princeton cited its inability to secure reinsurance at traditional levels (below $1M*) as a factor contributing to its current financial condition, making it necessary to temporarily suspend writing new business.
"Based on the substantial position Princeton occupies in the New Jersey marketplace and industry concerns that traditional reinsurance is not readily available, I am exercising my statutory authority to determine if reinsurance for medical malpractice coverage is unavailable in the New Jersey market. Should a Department hearing determine that reinsurance is unavailable, I am prepared to consider reactivating the Medical Malpractice Reinsurance Association," stated the Commissioner.
"I am confident that Princeton's decision is both a temporary and a responsible one, in the best interest of current Princeton policyholders. Physicians covered by PIC should be assured that the company will continue to meet its obligations to them, renew its existing book of business, and cover additional doctors who join practices Princeton now insures."
Bakke further reassured policyholders stating, "While Princeton Insurance Company's announcement may cause some concern among its policyholders, the Department of Banking and Insurance supports this move and believes that this is the most prudent course for the long-range protection of Princeton insureds. Princeton continues to act responsibly and cooperate fully with Department regulators as we work together to protect the interests of Princeton policyholders."
The announcement to hold this hearing is the latest in a series of regulatory actions the Administration has taken to manage a difficult medical malpractice insurance market. Over the last year, recognizing the importance of the problem, the Governor directed the Department of Banking and Insurance to take immediate steps to assist physicians until a more comprehensive reform package can be adopted. To date, the Department has:
*Princeton Insurance Company claims that part of the difficulty
it is currently experiencing is due to its inability to secure reinsurance at
attachment levels below $1M