EMERGENCY ROOM PHYSICIANS CAPITALIZE OWN RRG
Sparta, NJ--August, 2003--The Woodland Group provides the consulting service used for the creation of the new Superior Insurance Co., RRG. The RRG provides medical professional liability to emergency room physicians affiliated with Emergency Medical Associates (EMA) of Livingston, NJ. EMA rolls into the RRG its entire book being non-renewed by the old MIIX. The book generates between $3 million and $5 million in premium from 224 emergency room doctors, 30 nurse practitioners, and 20 physician assistants.
The RRG’s average premium for a full-time equivalent emergency room physician is $25,000 for claims-made coverage at the second year. Coverage is via a master policy naming the group. Coverage is first dollar. Defense costs are inside the policy limits in an effort to control costs. Limits reach $1 million/$3million. Munich Re provides reinsurance over $500,000 attachment point. Look for total premium to double to $6 million over the next three to five years as EMA moves into more states and makes acquisitions/mergers.
Superior Insurance is a restricted-access RRG. It was created because the new markets for New Jersey med mal require capitalization by its insured’s. The new markets include MIIX Advantage, NJ PURE and Conventus. The emergency medical physicians decided to capitalize their own RRG instead of contributing capital elsewhere. Capitalization ran between $2 million and $3 million, based on 50 percent of premium. Capitalization makes the surplus-to-premium ratio new are two-to-one. The RRG is domiciled in South Carolina.
Tim Hoover of the Woodland Group designed the RRG for members or physicians of EMA, which as about 250 physicians or employees under contract to 15 hospitals in New Jersey. Hoover joined The Woodland Group in 2001 and was previously with Frontier Insurance and Sedgwick Group. Hoover has experience in the alternative risk market. Lisa Labbee is the marketing manager at The Woodland Group, which is licensed in 47 states plus Washington, D.C.
Superior Insurance RRG may expand into other states next year. EMA looks at acquisition and merger opportunities and will use its RRG as leverage to encourage other emergency room physician groups to join EMA. The company is one of a few emergency room groups with electronic medical records and patient tracking systems. EMA designed the proprietary Emergency Department Information Manager (EDIM) system and will use it also to entice new members to join EMA. Service providers for the RRG include USA Risk Group of Charleston, SC, for captive management; Western Litigation of Houston for claims administration; and Nelson, Mullins, Riley and Scarborough of Charleston for legal services.