Chapter 781 Oregon Laws 2003
AN ACT
HB 3630
Relating to physicians; creating new provisions; amending ORS 656.632; and declaring an emergency.
Be It Enacted by the People of the State of
Oregon:
SECTION
1. (1) The State Accident
Insurance Fund Corporation shall establish a reinsurance program for medical
professional liability insurance policies issued by authorized insurers in the
calendar years 2004, 2005, 2006 and 2007 to doctors of medicine and doctors of
osteopathy licensed under ORS chapter 677 who:
(a)
Have a rural practice according to the criteria established by the Office of
Rural Health for purposes of ORS 316.143;
(b)
Hold an active, unrestricted license to practice medicine; and
(c)
Have an in-force policy of medical professional liability insurance with an
authorized insurer with minimum limits of coverage of $1 million per occurrence
and $1 million aggregate.
(2)
The reinsurance program established in accordance with this section must be
carried out in accordance with the plan approved under section 2 of this 2003
Act.
(3)
The coverage provided under the reinsurance program shall be priced by the
State Accident Insurance Fund Corporation, in accordance with rate standards or
percentage reductions determined by the Director of the Department of Consumer
and Business Services after consultation with the Office of Rural Health, at
rates that will significantly reduce premiums for doctors to whom this section
applies so as to make the medical professional liability insurance reasonably affordable.
(4)(a)
The State Accident Insurance Fund Corporation may provide coverage as
authorized in this section on such terms and conditions as the State Accident
Insurance Fund Corporation determines to be reasonable, subject to the
requirements and other terms of the plan approved under section 2 of this 2003
Act.
(b)
Notwithstanding paragraph (a) of this subsection, the State Accident Insurance
Fund Corporation must make all reasonable efforts consistent with the goals of
sections 1 to 7, 10 to 12 and 14 of this 2003 Act to transfer any assumed
reinsurance liability.
(5) The State Accident Insurance Fund Corporation is not required to provide coverage for risks under this section that exceed the amount the director is authorized to credit against assessments in section 7 of this 2003 Act, but the State Accident Insurance Fund Corporation is liable for all risks that it covers under this section.
SECTION
2. (1) The State Accident
Insurance Fund Corporation shall submit to the Director of the Department of
Consumer and Business Services and to the Office of Rural Health a plan for
carrying out the provisions of section 1 of this 2003 Act. The director and the
office shall approve the plan following a determination that the plan:
(a)
Satisfies the purposes of sections 1 to 7 of this 2003 Act.
(b)
Obligates the State Accident Insurance Fund Corporation to carry out the
reinsurance program established under section 1 of this 2003 Act by any
appropriate coverage, which may consist of financial reinsurance, on an
insurer-to-insurer basis.
(c)
Provides administrative management for the reinsurance program.
(d)
Is financially sound.
(e)
Facilitates payments from the Rural Medical Liability Reinsurance Fund
established by section 5 of this 2003 Act and is otherwise fair and reasonable
to the participating primary insurers and their insureds.
(f)
Establishes appropriate underwriting and rating standards.
(g)
Minimizes transactional and claim costs for the State Accident Insurance Fund
Corporation and for primary users.
(h)
Is appropriate in relation to the insurance market in this state.
(i)
Effectively reduces premiums for medical professional liability insurance for
doctors eligible for coverage under the plan.
(2)(a)
The plan approved under this section must provide, to the extent funds are
available from the credit provided in section 7 of this 2003 Act for the annual
assessment owed by the State Accident Insurance Fund Corporation under ORS
656.612, for a reduction in premiums as provided in this subsection for medical
professional liability insurance for eligible doctors of medicine and doctors
of osteopathy. The reduction of premium shall be:
(A)
Up to 80 percent for doctors specializing in obstetrics;
(B)
Up to 60 percent for doctors specializing in family or general practice who
provide obstetrical services; and
(C)
Up to 40 percent for all other eligible doctors.
(b)
If the funds available to provide premium reductions are insufficient to
provide the maximum reduction, the plan shall provide for proportional
reductions to all eligible doctors.
(c)
Premium reductions shall be a percentage of the actual premium charged for
medical professional liability insurance in the market of authorized insurers
for limits purchased of up to $1 million per occurrence and $3 million annual
aggregate.
(d)
Premium reductions shall be effective beginning with the first premium payment
in each calendar year under the reinsurance program.
(3)
The plan adopted under this section may not obligate the State Accident
Insurance Fund Corporation to provide coverage under section 1 of this 2003 Act
at a cost to the State Accident Insurance Fund Corporation that exceeds an
average of $10 million for each policy year for the four years for which the
coverage is provided. The cost to the State Accident Insurance Fund Corporation
shall be the actuarially determined costs of the reinsurance program.
(4)(a)
The State Accident Insurance Fund Corporation shall submit the plan required
under this section to the director and the office not later than September 30,
2003.
(b) The director and the office shall approve, disapprove or require changes to the plan as promptly as reasonably possible in order to enable the State Accident Insurance Fund Corporation to have the plan operational by January 1, 2004. The plan may be implemented only after joint approval by the director and the office.
SECTION
3. (1) For the purposes of the
reinsurance program for medical professional liability insurance established
under section 1 of this 2003 Act, the State Accident Insurance Fund Corporation
is subject as a domestic insurer to ORS 731.248, 731.252, 731.256, 731.258,
731.260, 731.296 to 731.316, 731.488, 731.574, 731.592, 731.594, 731.730,
731.731, 731.735, 731.737, 731.988, 731.992, 733.010 to 733.060, 733.140 to
733.170 and 733.210. The requirements of the Director of the Department of
Consumer and Business Services under ORS 733.010 to 733.060, 733.140 to 733.170
and 733.210 govern in the case of a conflict between those requirements and the
requirements of any accounting system prescribed by the Oregon Department of
Administrative Services.
(2) The State Accident Insurance Fund Corporation is an authorized assuming insurer with respect to reinsurance for medical professional liability insurance for the purposes of ORS 731.509.
SECTION 4. In addition to the purposes and functions for which the State Accident Insurance Fund Corporation is created under ORS 656.752, the State Accident Insurance Fund Corporation is also created for the purpose of carrying out the reinsurance program for medical professional liability insurance established under section 1 of this 2003 Act.
SECTION
5. (1) The Rural Medical
Liability Reinsurance Fund is established separate and distinct from the
General Fund and shall be held by the State Treasurer. The Rural Medical
Liability Reinsurance Fund is established for the purpose of providing coverage
under the reinsurance program established under section 1 of this 2003 Act.
Interest earned by the Rural Medical Liability Reinsurance Fund shall be
credited to the fund.
(2)
The State Accident Insurance Fund Corporation shall provide the resources
necessary to support and fund coverage provided by the corporation as
authorized under section 1 of this 2003 Act.
(3)
All moneys received by the State Accident Insurance Fund Corporation for
payment to the Rural Medical Liability Reinsurance Fund shall be deposited to
and shall become part of the Rural Medical Liability Reinsurance Fund.
(4)
All payments authorized to be made by the State Accident Insurance Fund
Corporation for coverage under the reinsurance program established under
section 1 of this 2003 Act shall be made from the Rural Medical Liability
Reinsurance Fund.
(5) Any excess or residual moneys remaining in the Rural Medical Liability Reinsurance Fund after the State Accident Insurance Fund Corporation has made all payments for which the corporation is obligated under section 1 of this 2003 Act, other than moneys that are owed to the State Accident Insurance Fund Corporation, shall be transferred to the Consumer and Business Services Fund.
SECTION
6. (1) If an insurer obtains
coverage with the State Accident Insurance Fund Corporation for medical
professional liability insurance issued by the insurer to a doctor to whom
section 1 of this 2003 Act applies, the insurer shall reduce the premium
charged to the doctor in a manner that fully recognizes savings made available
by coverage offered under section 1 of this 2003 Act.
(2) An insurer to which subsection (1) of this section applies shall demonstrate the difference in its rates for medical professional liability insurance for purposes of subsection (1) of this section in its filing of rates with the Director of the Department of Consumer and Business Services.
SECTION
7. (1) When the State Accident
Insurance Fund Corporation provides coverage through the reinsurance program
established under section 1 of this 2003 Act, the Director of the Department of
Consumer and Business Services shall credit the purchase price or the amount of
the payment, net of any income, to the annual assessment owing by the State
Accident Insurance Fund Corporation to the Department of Consumer and Business
Services under ORS 656.612. The amount the director credits under this
subsection may not exceed an average of $10 million for each policy year for
the four years that coverage is provided under section 1 of this 2003 Act.
(2) The director shall establish by rule the accounting procedures and requirements by which the credit is determined for the assessment under ORS 656.612.
SECTION 8. Notwithstanding ORS 656.632 and 656.634, the State Accident Insurance Fund Corporation may transfer funds from the Industrial Accident Fund to the Rural Medical Liability Reinsurance Fund for the purposes of sections 1 to 7 and 10 to 12 of this 2003 Act and the amendments to ORS 656.632 by section 9 of this 2003 Act.
SECTION 9. ORS 656.632 is amended to read:
656.632. (1) The Industrial Accident Fund is continued. This fund shall be held by the State Treasurer and by the State Treasurer deposited in such banks as are authorized to receive deposits of general funds of the state.
(2) All moneys received by the State Accident Insurance Fund Corporation for workers’ compensation purposes under this chapter, shall be paid forthwith to the State Treasurer and shall become a part of the Industrial Accident Fund. However, any assessments collected for the Director of the Department of Consumer and Business Services under this chapter and deposited in the Industrial Accident Fund may thereafter be transferred to the director and deposited in the Consumer and Business Services Fund.
(3) All payments authorized to be made by the State Accident Insurance Fund Corporation for workers’ compensation purposes by this chapter, including all salaries, clerk hire and all other expenses, shall be made from the Industrial Accident Fund.
SECTION
10. (1) There is created the
Professional Panel for Analysis of Medical Professional Liability Insurance
consisting of six members appointed as follows:
(a)
The President of the Senate shall appoint two members, one of whom must have
professional expertise in gathering, evaluating or applying research data.
(b)
The Speaker of the House of Representatives shall appoint two members, one of
whom must have professional expertise in gathering, evaluating or applying
research data.
(c)
The Governor shall appoint two members, one of whom must have professional
expertise in gathering, evaluating or applying research data.
(2)
Members of the panel may not have a financial or professional affiliation with:
(a)
Medical care providers;
(b)
Insurers providing professional liability insurance; or
(c)
Personal injury litigation.
(3)
The panel shall:
(a)
Advise the State Accident Insurance Fund Corporation in its selection of the
consulting firm required under section 11 of this 2003 Act;
(b)
Establish a work plan to be carried out by the consulting firm;
(c)
Review and approve the work product of the consulting firm; and
(d)
Evaluate the data reported by the consulting firm and make findings
incorporating the data. The findings shall be included in the report required
under subsection (10) of this section.
(4)
The panel is subject to the provisions of ORS 171.605 to 171.635.
(5)
The panel shall use the services of permanent legislative staff to the greatest
extent practicable.
(6)
All agencies of state government, as defined in ORS 174.111, are directed to
assist the panel in the performance of its duties and, to the extent permitted
by laws relating to confidentiality, to furnish such information and advice as
the members of the panel consider necessary to perform their duties.
(7)
A majority of the members of the panel constitutes a quorum for the transaction
of business.
(8)
Official action by the panel requires the approval of a majority of the members
of the panel.
(9)
The panel shall elect one of its members to serve as chairperson.
(10)
The panel shall submit a report to the Governor and to the Legislative Assembly
in the manner provided by ORS 192.245, no later than December 15, 2004.
(11)
Members of the panel who are not members of the Legislative Assembly are not
entitled to compensation, but may be reimbursed for actual and necessary travel
and other expenses incurred by them in the performance of their official
duties, in the manner and amounts provided for in ORS 292.495. Claims for
expenses shall be paid out of funds in the Rural Medical Liability Reinsurance
Fund established under section 5 of this 2003 Act.
(12) The panel may seek public and private funds to assist in the work of the panel.
SECTION
11. (1) The State Accident
Insurance Fund Corporation shall select a consulting firm to perform services
required under this section. The firm selected must be a regional or national
consulting firm with at least 10 accredited casualty actuaries on staff and
must possess demonstrated accounting, financial and research capabilities. The
firm must also have experience in the casualty insurance industry and
particularly in the field of medical professional liability insurance.
(2)
Under the direction of the Professional Panel for Analysis of Medical
Professional Liability Insurance created under section 10 of this 2003 Act, the
consulting firm shall gather, analyze and evaluate data on the availability,
costs and transaction of medical professional liability insurance that consider
Oregon market trends on premiums and losses, other factors affecting the
competitiveness of the Oregon market and regulatory options for minimizing cyclical
trends.
(3) The costs of the services of the consulting firm selected under subsection (1) of this section shall be paid by the State Accident Insurance Fund Corporation from the amount available for credit to the annual assessment owing by the State Accident Insurance Fund Corporation under section 7 of this 2003 Act. The cost of services may not exceed two percent of the maximum average amount that may be credited to the State Accident Insurance Fund Corporation for one year under section 7 of this 2003 Act.
SECTION 12. The Office for Oregon Health Policy and Research and the Office of Rural Health shall make recommendations to the Governor and to the Seventy-third Legislative Assembly concerning methods to attract and retain doctors in rural areas of the state.
SECTION 13. ORS 656.632, as amended by section 9 of this 2003 Act, is amended to read:
656.632. (1) The Industrial Accident Fund is continued. This fund shall be held by the State Treasurer and by the State Treasurer deposited in such banks as are authorized to receive deposits of general funds of the state.
(2) All moneys received by the State Accident Insurance Fund Corporation [for workers’ compensation purposes] under this chapter, shall be paid forthwith to the State Treasurer and shall become a part of the Industrial Accident Fund. However, any assessments collected for the Director of the Department of Consumer and Business Services under this chapter and deposited in the Industrial Accident Fund may thereafter be transferred to the director and deposited in the Consumer and Business Services Fund.
(3) All payments authorized to be made by the State Accident Insurance Fund Corporation [for workers’ compensation purposes] by this chapter, including all salaries, clerk hire and all other expenses, shall be made from the Industrial Accident Fund.
SECTION
14. (1) The State Accident
Insurance Fund Corporation shall continue paying reinsurance claims incurred or
made prior to January 1, 2008, from the Rural Medical Liability Reinsurance
Fund until the State Accident Insurance Fund Corporation has extinguished its
liabilities for reinsurance issued under section 1 of this 2003 Act by payment
of claims or by purchase of reinsurance. Purchase of reinsurance under this
subsection shall be subject to approval by the Director of the Department of
Consumer and Business Services.
(2)
Sections 1 to 8 and 10 to 12 of this 2003 Act are repealed January 2, 2014.
(3) The amendments to ORS 656.632 by section 13 of this 2003 Act become operative January 2, 2014.
SECTION
15. (1) The Director of the
Department of Consumer and Business Services shall report in the manner
provided by ORS 192.245 to the Seventy-third and Seventy-fourth Legislative
Assemblies on the performance of the program established under section 1 of
this 2003 Act.
(2) The State Accident Insurance Fund Corporation shall provide all data and other information required by the director to prepare the reports required under this section.
SECTION 16. This 2003 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2003 Act takes effect on its passage.
Approved by the Governor September 17, 2003
Filed in the office of Secretary of State September 18, 2003
Effective date September 17, 2003
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