Reasons why we have not approached other markets for renewal terms 2020 for SASOHN medical malpractice insurance

Hi Denise

The content of this e-mail forms part of our statutory record of advice to you. Please read everything carefully and contact us if anything is unclear or requires clarification.

Further to my earlier e-mails, please see below the reasons that we have not approached any other insurers for renewal terms for 2020, for your consideration.

The most important reason by far that we would be very reluctant to move your cover to another insurer is the service excellence that we receive from iToo’s claims-handling team. They have a large claims’ team with specific experience in medical malpractice and many of their claims’-handlers are qualified attorneys. Many of the other insurers have small claims’ teams with little or no experience in handling medical malpractice/SANC matters- and this delays responses at the critical time when your members most need speedy and expert assistance.

As per my earlier e-mail, you will note that one of the drivers of the cost of medical malpractice insurance is attorneys’ costs. Because iToo claims’-handlers try to handle as much in-house as they can rather than appointing attorneys on everything, this is another important factor as it would keep the costs down (which impacts on your premium increases). If we were to move your insurance to another insurer who was unable to offer in-house assistance to the extent that iToo does, the legal costs of running your scheme would increase significantly and this would translate into increased premiums being passed on to your members.

Many other insurers will not assist if they are approached with a query which falls outside the cover. Our experience with iToo has been that they will often do their best to try and help even where the matter is not technically covered by the policy. For example- iToo often assists members with the drafting of legal release documents for patients to sign when there is a dispute over fees/request for refund of fees, etc.

We also enjoy substantial flexibility with iToo when it comes to the terms of your cover. Many other insurers are not accommodating when it comes to requests for special extensions/concessions/accommodation.
Due to the fact that CFP Brokers place the cover for over 8,000 individual practitioners with iToo, we believe that this also means that iToo are a lot more open to negotiate with us when we request special terms for any of our clients.
CFP Brokers has a bespoke negotiated scheme wording with ITOO/Hollard for medical malpractice cover for healthcare practitioners. The cover provided under this policy is very comprehensive and includes certain covers which many other insurers would not necessarily provide, e.g.:
1. 5 years’ additional reporting period (which we may be able to extend to 6 years going forward. I will keep you updated on our negotiations in this regard).
2. Public and products’ liability, including cover for defective workmanship.
3. Cover for legal defence costs for all SANC complaints- even if they are non-injury related, e.g. complaints about breach of ethical regulations. Most insurers only provide cover for SANC complaints where there is a possibility that a patient or their family making the complaint, could sue the nurse for malpractice, i.e. where there is some form of injury.
In our experience, Camargue’s quotes are generally not competitive and they require much higher excesses than anyone else. We have also found a general trend toward extreme conservatism in their underwriting of medical malpractice risks subsequent to a change in their lead underwriters.
Chubb (Previously ACE) has withdrawn from the medical malpractice market, as have Stalker Hutchison and Admiral (who underwrite on behalf of Santam).
GPLA (General and Professional Liability Acceptances) cannot offer us the products’ liability, defective workmanship and 5-year automatic extended reporting period that you would enjoy with Hollard under your 2020 policy. They also have not provided us with definitive assurance that they would be willing to cover all SANC complaints, regardless of whether or not the complaint involves an alleged injury to a patient.
Zurich Insurance, Genoa, Constantia and AC & E are all relatively recent entrants to the medical malpractice insurance market. CFP Brokers have placed no medical malpractice business with them- and feel that it is important not to place a whole group insurance policy with an untried market with no track record, proven expertise or experience of medical malpractice insurance underwriting or claims’-handling in RSA. I urge you to be wary of any claims made by new entrants into the medical malpractice insurance market (including PPS), who may approach SASOHN directly to offer you medical malpractice insurance, and to investigate any representations made to you fully before accepting them as valid. I remain as always happy to comment on any proposals sent to SASOHN relating to your insurance. Medical malpractice insurance is an extremely volatile market and we have seen numerous insurers exit this market- so we are very wary of placing covers with a market which has not proven to our satisfaction that they are likely to be here for the long term.
The additional reporting period for your retired members would fall away if you move the policy to another insurer, unless the new insurer were to agree to continue to cover the retired members.
While the policy specifically excludes claims/complaints involving sexual harassment/assault, etc., cover is provided to reimburse any member their legal defence costs in the event that they are acquitted or found not guilty. Many other insurers will not offer this cover. We have already dealt with a number of these cases reported to us by healthcare practitioners.
Your members enjoy cover overseas (excluding USA and Canada) so long as they are only visiting and the visit is for less than 60 consecutive days any one insurance period. Most other insurers will not offer this cover without charging additional premium.
iToo allows quarterly pro-rated premiums for those members who only pay for cover later in the year. Many other insurers would not allow this. This will be useful to SASOHN to reduce the costs of providing cover to new members who only join later in the year.
As far as we are aware- iToo also has the biggest book of healthcare practitioners outside the Medical Protection Society – which again speaks to their expertise and experience and also would give them certain flexibility in negotiating terms with their own reinsurers- which many of the smaller players in this market would not have. This has a trickle-down effect to your members in terms of greater ability to negotiate better terms and premiums (part of the cost of the insurance is the reinsurance which iToo has to purchase as no insurer will generally take 100% of the risk themselves).

If despite the reasons provided above, you would still like us to go to the market to obtain alternative quotes, please let me know and I will do so (we can approach all the other insurers except PPS (who deal directly with clients) and Ethiqal/Constantia, who we prefer not to deal with. I understand that sometimes members or Exco, may ask for more than one quote to consider (for corporate governance reasons) or may want to relook at their options every few years and we are able to obtain quotes from other medical malpractice insurers where required.

Please do not hesitate to contact me if you have any queries or if you need anything else.

Kind regards

Kristy Carr

CFP Brokers CC

An Authorised Financial Services Provider: FSP 42892