INSURER THAT TRIGGERED NEVADA MALPRACTICE CRISIS PAYS $1 MILLION:

The St. Paul insurance companies, whose pullout from the medical malpractice insurance market caused a crisis for Nevada doctors, will pay a group of Las Vegas physicians $900,000 under terms of a settlement announced April 9. Another $100,000 will be paid to the state in administrative assessments, resolving a separate complaint that two St. Paul companies didn’t follow proper procedures in issuing policies. The $900,000 will be split among 164 doctors who were charged higher rates in 2001 before the rate increase took effect, state Insurance Commissioner Alice Molasky-Arman said. The amounts will vary depending on types of coverage. “This settlement represents a fair compromise to an impasse which could have potentially turned into a lengthy court battle without resulting in any monies being refunded to policyholders,” Gov. Kenny Guinn stated. “The settlement will result in immediate refunds to Nevada’s physicians, which could not have been accomplished through a potentially lengthy and costly legal process.” Molasky-Arman said the settlement will give the doctors a dollar-for-dollar refund of a 25 percent rate increase that had been added onto their policy renewal bills a month or two before a September 2001 effective date. Nevada’s problems began when St. Paul Cos., which had insured 60 percent of the state’s doctors, began canceling its malpractice policies in December 2001. Facing losses of nearly $1 billion, the Minnesota-based company said it was getting out of the malpractice insurance business worldwide.