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A malpractice lawsuit requires the involvement of 10–20 people for an average of 3.5 years and costs an average of $180,000. Plaintiff / Plaintiff’s Attorneys / Plaintiff’s Expert Witnesses /Defendant Physician / Defense Attorneys / Defendant’s Expert Witnesses /Claims Specialists / Judge / Jury / Court Reporter More recently in our history, the market became flooded with carriers eager to take advantage of what they saw as a friendly medical professional liability environment. Some of these carriers were the same ones that had left the medical malpractice marketplace earlier. Others were stock companies, newly formed from their physician carrier roots, eager to expand to reflect a positive picture to their new investors. Manuel S. Puebla President, The Doctors Company The Doctors Company We are strong. It was during this period that The Doctors Company faced its greatest challenge, maintaining its financial strength, serving the needs of its member-physicians, and continuing its physician advocacy. Some of our own members complained that The Doctors Company was out of step with a marketplace that continued to offer lower and lower premiums for the same risks. By the middle of year 2000, the marketplace began to change dramatically. First came downgrades from A.M. Best. Then over the year came announcements from various insurance departments that some of the most aggressive carriers had been placed under supervision. Some of these companies ended up being liquidated with an adverse impact on those insureds that depended on these companies for their coverage.Today, The Doctors Company has more than $1 billion in assets and nearly $400 million in surplus. Our key ratios reflect our financial strength as well. Insurance regulators and analysts look at key industry ratios to gauge an insurer’s financial strength. They recommend reserves-to-surplus ratios no greater than four-to-one and premium-to-surplus ratios no greater than three-to-one. Our key ratios consistently run much lower (better). In 2001, our reserves-to-surplus ratio was 1.4:1, and our premium-to-surplus was 0.8:1. We Are Responsible. We continue to carry a unique responsibility to our member-insureds. We continue the promise to protect our members. We will not put our financial integrity at risk in order to exploit market opportu-nities. We do not have outside stockholders to please, only our members. Short-term solutions can be dangerous for carriers and can be lethal to doctors left without protection when their insurer leaves the market or fails altogether. We won’t put our membership at risk by chasing short-term gains at the risk of long-term security.We Are Disciplined. Our financial strength is also built upon sound underwriting and effective and cost-efficient claims management. Our underwriting skills have developed as the health care delivery system has evolved. Although physicians in solo and small group practice are an important segment of our insured population, we also insure medical groups, hospitals, and other health care facilities. We offer solid, long-term solutions with innovative coverage and unique products.We maintain the same stringent standards of discipline in our claims management that we do in underwriting. Effective claims management is critical to the bottom line—about half of every premium dollar is spent on claims defense. Our record of successful claims defense is unsurpassed. The Doctors Company resolves 80 percent of claims against its doctors without indemnity payments or reports to the National Practitioner Data Bank (NPDB). Of the small percentage of claims that do go to trial, the results favor our doctors in 80 percent of the cases. We Look to the Long Term. Over our 26 years of offering professional liability coverage to our members, The Doctors Company has built a record of uninterrupted growth and achievement. We have had the foresight to recognize the changing trends in health care delivery, insurance, and law. We have adapted our business model to provide protection in the face of ever-changing needs. The Doctors Company protects its strength in order to protect its member-policyholders. In a time when the instability of the marketplace has caused tremendous disruption to the practice of medicine, The Doctors Company remains a leader in the industry and a model of stability, with a long and successful record of physician advocacy.TDC resolves more than 80 percent of claims without indemnity payments—and without National Practitioner Data Bank reports. Of the lawsuits against TDC’s members that do go to trial, more than 80 percent result in victories for our doctors. TDC’s reserves-to-surplus ratio. TDC’s premium-to-surplus ratio. TDC has more than $1 billion in assets. TDC has nearly $400 million in policyholders' surplus. TDC has been rated "A" (Excellent) by A.M. Best for 17 consecutive years. TDC has been named for the sixth time and third consecutive year to Ward’s 50 Benchmark Group of top performing insurers worldwide. The Doctors Company We are committed. MICRA is not an experiment. We have more than 25 years of experience with this legislation. We know, we do not speculate, that it has dramatically moderated the malpractice premium burden in California. Once the highest in the nation, California’s premiums are now among the lowest. We know, we do not speculate, that MICRA encourages more rapid settlement when indemnity payment is appropriate, because the lottery factor has been eliminated. We know, we do not speculate, that MICRA does not impede access to attorneys. California was and remains a litigious state, and the frequency of malpractice suits in California remains very high. We know, we do not speculate, that the malpractice crises blazing around the country today will not be resolved without effective reform of our medical-legal system. If society wishes to have no limits on liability, it must accept no limits on premiums, and ultimately, no limits on the cost of health care. This tort tax comes directly from funds that should be going into, not coming out of, our health care system. Our physician-dominated Board—today—includes four physician-members of the CPCC, and our chief counsel is one of the principal authors of the MICRA legislation itself. The Doctors Company understands doctors, we understand medicine, and we understand the real meaning of tort reform. We Are Physicians. We understand that malpractice suits are not merely a cost of doing business, but are an intensely personal attack on the core of a physician’s identity. We know that National Practitioner Data Bank reports are immortal, and will follow physicians throughout their professional life. We under-stand physicians have to make the incision, read the x-ray, or write the prescription now, in the face of attorneys waiting for the privilege of litigating through the retrospectascope later. We protect the practice of good medicine.We Are Advocates. In the courtroom, in legislative chambers, in the media, TDC actively represents the overriding interest of our policyholders: to be allowed to practice good medicine. This is something we do because it is necessary, because we wholeheartedly believe in its value, and because it is right.We Are Trusted. Today, more than ever, physicians cannot afford to be wrong in the choice of a professional liability insurance company. Our unique combination of expertise, belief, and passion make us the best choice for our members. TDC doctors are safer, stronger, and better prepared for their daily rounds because of the protections we provide. Every day, we earn the trust of our policyholders as they earn the trust of their patients.1970 –1975 In California, 80 percent of all malpractice suits filed in the first three quarters of the 20th century were filed between 1970 and 1975. 1975 The California Physicians Crisis Committee (CPCC) is formed to fight for medical liability reform. The California State Legislature passes the Medical Injury Compensation Reform Act (MICRA). 1976 The Doctors Company is founded in California. 1977 TDC works with physicians and medical associations to organize tort reform efforts in other states and toward a federal solution. 1978 The Doctors Company inaugurates its professional liability program in Nevada and is authorized to offer its medical malpractice insurance coverage to Wyoming physicians. 1979 The Doctors Company is authorized to offer its liability program in Montana. 1980 The Doctors Company testifies before the Nevada State Legislature on medical malpractice law reform. 1985 MICRA is challenged, but the California Supreme Court upholds four major provisions of MICRA. 1985 Medical tort reform legislation passes in Montana. 1986 The Doctors Company thwarts the plaintiff bar’s attempt to overturn California’s MICRA statutes and Proposition 51, restricting joint and several liability, is overwhelmingly passed by Californians. 1987 The Doctors Company receives final approval to enter the professional liability market in Washington and joins the state’s Liability Reform Coalition. 1989 The Doctors Company Board of Governors authorizes the creation of a doctors’ political action committee (DOCPAC) and legislative contact system. 1990 TDC supports California legislation to increase medical board authority, to aid insolvent health insurers, to prohibit physician advertising not approved by the state, and to improve reporting laws for physicians. (1) Our Government Relations Department champions tort reform in the national political and legislative arenas. In addition, TDC’s state and federal political action committees (DOCPACs) advocate for and defend medical liability reforms in their respective states and Congress. TDC monitors liability and insurance legislation on both state and federal levels. When appropriate, TDC will support or oppose selected legislation. We will also sponsor legislation when both need and opportunity are present. Highlights from our 26 years of advocacy follow. 1990 At the request of the Washington State Insurance Commissioner, TDC relates its experience with Washington’s 1986 state tort reform law, demonstrating this legislation was instrumental in our decision to begin service in Washington and, later, to reduce premium rates. 1992 The Doctors Company establishes the first state DOCPAC in California and successfully fights to exempt California medical liability insurers from the Department of Insurance claims handling regulations. The company also becomes a founding member of Californians Allied for Patient Protection. 26 Years of Advocacy State Federal 1992 The Doctors Company successfully lobbies Physician Insurers Association of America to establish a congressional lobby effort to adopt California MICRA statutes at the federal level and joins Citizens for Civil Justice Reform and the American Tort Reform Association. 1993 TDC successfully sponsors House amendment and lobbies for tort reform in federal health care legislation, resulting in the first action on this matter in the history of Congress. 1994 The Doctors Company launches the first federal DOCPAC. 1994 The Doctors Company establishes the Nevada state DOCPAC. 1995 The Doctors Company plays a key role in the Health Care Liability Alliance, a Capitol Hill force for national medical liability reform advocacy. 1996 The Manhattan Institute publishes "An ‘Epidemic’ of Malpractice? A Commentary on the Harvard Medical Practice Study" by TDC Chairman Richard E. Anderson, M.D. 1996 Jerrald R. Goldman, M.D., TDC Board of Governors, hosts the national "Conference on Medical Malpractice in the Media." 1997 The Doctors Company defeats an attempt to post California medical malpractice settlements on the Internet and sets the stage for a review of the reporting policies of the National Practitioner Data Bank (NPDB). 1997 The Doctors Company establishes Colorado and Montana state DOCPACs. 1998 TDC defeats California state legislation that would have created exceptions to MICRA statutes and raised the cap on noneconomic damages and successfully campaigns to exempt medical liability insurers from bad faith legislation in the state. The company also establishes the Washington state DOCPAC. 1999 The Doctors Company vigorously—and successfully—opposes U.S. Department of Health and Human Services regula-tions that would have required medical malpractice insurers to determine the relative liabilities of doctors in cases and report these to the NPDB. 2000 The Doctors Company hosts the first annual Tort Reform Summit of tort reform leaders from around the country. 2000 TDC begins its fight to amend the Patients’ Bill of Rights to limit physician liability. 2001 The Doctors Company hosts the second annual Tort Reform Summit of national tort reform leaders. 2001 TDC establishes Florida DOCPAC. TDC successfully defends Utah’s medical liability reforms in state courts. Richard E. Anderson, M.D., F.A.C.P. / Medical Oncologist / Chairman Chairman of the Board of Governors since 1994, Dr. Anderson is a member of the American Society of Clinical Oncology and a fellow of the American College of Physicians-American Society of Internal Medicine. Dr. Anderson is former chief of medicine of Scripps Memorial Hospital, where he was also senior oncologist for 18 years, and clinical professor of medicine at the University of California at San Diego. He is widely published on medical malpractice liability and physician advocacy.Richard E. Anderson, M.D., F.A.C.P. / Medical Oncologist / Chairman Chairman of the Board of Governors since 1994, Dr. Anderson is a member of the American Society of Clinical Oncology and a fellow of the American College of Physicians-American Society of Internal Medicine. Dr. Anderson is former chief of medicine of Scripps Memorial Hospital, where he was also senior oncologist for 18 years, and clinical professor of medicine at the University of California at San Diego. He is widely published on medical malpractice liability and physician advocacy.We Are Advocates. The Doctors Company has an unequaled record of support for medical liability reform and of vigorous advocacy in defense of the practice of medicine—all achieved without compromising fair redress for those with real injuries. We were founded on the principle of physician advocacy, and we remain dedicated to reforming the medical-legal system. We have waged campaigns for 26 years to achieve a better balance between the rights of plaintiffs and defendants, and we will continue to seek tort reform that protects physicians against the seemingly limitless expansion of potential liability. States that have enacted real tort reform enjoy less defensive medicine, faster resolution of litigation, and lower insurance premiums. In those states, liability premiums can be as much as two-thirds less. Tort reform not only contributes to a more reasonable medical-legal environment, it also plays a significant role in stabilizing medical malpractice premiums and providing parity for physicians in the courtroom. Ultimately, effective tort reform improves medical care, decreases its cost, and reduces the need for defensive medicine. As legislative opportunities arise, The Doctors Company actively pursues political agendas that protect existing tort reforms and encourage the passage of new reforms. We are strong. The Doctors Company * The Doctors Company, Professional Underwriters Liability Insurance Company, and Underwriter for the Professions Insurance Company combined Balance Sheet*(Statutory Basis–unaudited) (in thousands) at December 31 2001 2000Admitted Assets Bonds $ 720,859 $ 705,618Preferred stocks 13,776 16,449 Common stocks–unaffiliated 99,725 180,851 Common stocks–affiliated 33,362 22,536 Cash and short-term investments 156,528 22,606 Real property 13,776 14,087 Other invested assets 13,417 16,613 Total cash and invested assets $ 1,051,443 $ 978,760 Federal income tax recoverable $ 33,969 $0 Interest and dividends receivable 9,555 9,912 Uncollected premiums and funds held 95,907 80,375 Reinsurance recoverable 20,068 7,549 Other admitted assets 4,389 1,696 Total admitted assets $ 1,215,331 $ 1,078,292 Liabilities and Policyholders’ Surplus Reserves for losses and loss adjustment expenses $ 543,986 $500,100Unearned premiums 186,158 153,986Premiums received in advance 6,905 5,928Amounts held for others 4,907 5,355Payable to affiliates 21,417 8,485Ceded premiums payable–unaffiliated 10,437 13,232Federal income tax payable 15,979 3,533Other liabilities 36,785 5,735Reserves for unauthorized reinsurance 4,792 853Total liabilities $ 831,366 $ 697,207Policyholders’ surplus 383,965 381,085Total liabilities and policyholders’ surplus $ 1,215,331 $ 1,078,292Income Statements (Statutory Basis–unaudited) (in thousands) for years ended December 31 20012000 Underwriting Income Premiums Earned $ 266,926 $211,707Underwriting Deductions Loss and loss adjustment expenses incurred $ 260,205 $167,279Other underwriting expenses incurred 68,945 56,065Total underwriting deductions $ 329,150 $ 223,344Net underwriting loss $(62,224) $(11,637)Investment Income Investment income earned (net of investment expenses of $6,288 in 2001 and $4,720 in 2000) $ 50,353 $ 48,673Net realized gain on sale of investments 26,223 6,645Net investment income $76,576 $ 55,318Income before federal income tax expense 14,352 43,681Federal income tax expense 5,309 14,621Net income $ 9,043 $ 29,060Financial Highlights (dollars in millions) 20012000 Total admitted assets $ 1,215.3 $ 1,078.3 Loss reserves 543.9 500.1 Direct earned premiums 246.9 199.6 Net premiums earned 266.9 211.7 Policyholders’ surplus 383.9 381.1 Number of insured physicians 22,899 19,087 Total claims reported 2,934 2,785 Total Admitted Assets (in millions)2001 1215.3 1997 933.4 1998 1065.9 1999 1104.0 2000 1078.3 Direct Earned Premiums (in millions)2001 246.9 1997 210.1 1998 222.6 1999 215.0 2000 199.6 Policyholders’ Surplus (in millions)2001 383.9 1997 308.3 1998 347.1 1999 395.8 2000 381.1 Number of Insured Physicians 2001 22,899 1997 19,888 1998 20,168 1999 17,960 2000 19,087 The Doctors Company has been protecting the careers and professional reputations of physicians for 26 years. Championing legal reform. Resisting easy settlements. Developing the financial strength to back up the promises we make to our physicians. The active defense of our doctors actually begins as soon as they join us. Helping doctors understand the issues and advances that affect them, across every specialty, nationwide, is the most effective way we know to limit their liability risk. As America's first national, physician-owned medical malpractice carrier, we've cultivated a uniquely informed perspective on the special needs, emerging national trends, and special challenges doctors face every day. As doctors, we understand the emotional cost of a malpractice claim, not just its financial impact. Beyond just defending claims, we're always looking for new ways to avoid them altogether. This is The Doctors Company advantage. Company Overview Founded 26 years ago in a time of crisis in the professional liability market, The Doctors Company has built more than $1 billion in assets by staying true to its fundamental commitments to physicians and physician advocacy, and to pursuing legislative reforms that protect the practice of good medicine. Protecting more than 28,000 doctors, of every specialty, in every state in the U.S., from the anxiety, distraction, and ruin of medical malpractice claims requires the kind of empathy, strength, and professionalism that only The Doctors Company can bring. That powerful combination is best represented in the fact that 80 percent of all our claims are resolved without indemnity payments or reports to the National Practitioner Data Bank—and by our record of vindicating our doctors in 80 percent of the small number of suits that do go to trial. We Are Advocates. The Doctors Company has an unequaled record of support for medical liability reform and of vigorous advocacy in defense of the practice of medicine—all achieved without compromising fair redress for those with real injuries. We were founded on the principle of physician advocacy, and we remain dedicated to reforming the medical-legal system. We have waged campaigns for 26 years to achieve a better balance between the rights of plaintiffs and defendants, and we will continue to seek tort reform that protects physicians against the seemingly limitless expansion of potential liability. States that have enacted real tort reform enjoy less defensive medicine, faster resolution of litigation, and lower insurance premiums. In those states, liability premiums can be as much as two-thirds less. Tort reform not only contributes to a more reasonable medical-legal environment, it also plays a significant role in stabilizing medical malpractice premiums and providing parity for physicians in the courtroom. Ultimately, effective tort reform improves medical care, decreases its cost, and reduces the need for defensive medicine. As legislative opportunities arise, The Doctors Company actively pursues political agendas that protect existing tort reforms and encourage the passage of new reforms. Malpractice cases are rarely won or lost on medical issues alone numerous other factors involving the insured can markedly affect the outcome Our Financial Strength Year after year, The Doctors Company receives excellent ratings from insurance regulators and analysts because of our financial strength and consistent performance. We’ve had the foresight to recognize the evolving trends in health care delivery, insurance, and law, and we have adapted our approach to meet new challenges as they arise. With more than $1 billion in assets—built on sound underwriting, cost-effective claims management and resolution, and a responsible investment strategy—our doctors can be assured that we’ll be here in good times and bad. Highlights
NOTE: All of the above information was taken directly from The Doctors Company's web pages. |
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