New Hampshire to Wind Down Med Mal JUA

The New Hampshire Insurance Department announced on July 24 that following a court order, Insurance Commissioner Roger A. Sevigny has been officially named as receiver of the New Hampshire Medical Malpractice Joint Underwriting Association (JUA).

The order from the Merrimack County Superior Court came in response to a new law directing the wind-down and closure of the JUA through a court-supervised receivership process.

The JUA is New Hampshire’s risk-sharing plan for medical malpractice insurance. It was established by the New Hampshire Insurance Department in 1976 to make med-mal insurance available to the growing number of medical providers who had difficulty purchasing coverage from private insurers.

Last December, a legislative committee asked the Insurance Department to determine whether there was still a need for a government risk-sharing plan to provide med-mal insurance. After a public hearing with testimony from interested stakeholders, the Department determined that med-mal coverage is now readily available from private insurers.

As a result of these findings, the Legislature passed H.B. 508, calling for an orderly wind-down of the JUA. The bill, which Gov. Maggie Hassan signed into law on July 20, directs the insurance commissioner to “facilitate the orderly resolution of the obligations of the JUA and transition of policyholders to coverage in the private market.”

As required by this bill, the Insurance Department filed pleadings to begin the court’s supervision of the closure of the JUA. The court’s order establishes the commissioner as receiver and approves the appointment of a special deputy, who will oversee the wind-down effort.

Policyholders who have existing coverage with the JUA will be able to retain their existing policies until those policies expire. Policyholders whose policies expire in 2015 may be able to renew their JUA coverage for the short term, but all policies will terminate no later than Dec. 31, 2016. Policyholders are advised to explore coverage options from private insurers.

In addition, under the bill, policyholders with JUA “claims-made” coverage may elect “tail coverage” under the terms of their policies if they are eligible or, instead, receive a return of a portion of paid premium reflecting the cost of this coverage.

The Insurance Department said a temporary hardship fund will be set up to help policyholders who have difficulty buying insurance from private insurers after their JUA policies expire. Many JUA policyholders currently pay below-market rates.

“Almost four decades ago, the New Hampshire Insurance Department, in cooperation with the state Legislature, acted to make medical malpractice insurance available in order to ensure New Hampshire residents had access to needed care,” said Sevigny.

“Today, thanks to a competitive insurance marketplace, health care providers now have access to coverage without state intervention,” the commissioner said. “We are pleased to see that the free market has resolved this issue, and we will carry out the Legislature’s wishes to close the JUA.”