Section Ins 1703.08 - Assessment of Members for Deficits Incurred as a Result of Policies Issued Prior to January 1, 1986(a) The trust, established pursuant to Ins 1703.09 shall maintain a stabilization reserve fund. The fund shall be used for payment of any deficit of the association, which is incurred as a result of policies issued prior to January 1, 1986. A deficit shall exist whenever the general assets of the association, derived from policies issued prior to January 1, 1986, is exhausted by virtue of payment of or allocation for the association's necessary administrative expenses, losses, loss adjustment expenses and reserves, including the incurred but not reported reserve for loss and loss adjustment expenses.(b) Each policyholder purchasing or renewing a policy of medical malpractice liability insurance on or after January 1, 1986 shall pay to the insurer issuing the policy an annual stabilization reserve fund charge in an amount equal to 15% of the annual gross premium charged for primary medical liability coverage. The stabilization reserve fund charge shall not apply to medical malpractice coverage purchased in excess of primary coverage. Such surcharge shall be separately stated in the policy, shall be collected by the insurer issuing the policy and shall be remitted pursuant to Ins 1703.10. Such charge shall not be subject to the premium tax provisions of RSA 400-A:31 and/or RSA 400-A:32. Failure to pay the stabilization reserve fund charge shall be grounds for cancellation of the policy.(c) No insurer issuing policies of medical malpractice liability insurance which are subject to the stabilization reserve fund charge shall pay commissions on any charges collected.(d) The charges imposed by this section shall remain in effect until the commissioner determines that a deficit no longer exists. The commissioner shall annually hold a public hearing pursuant to the provisions of RSA Chapter 400-A to determine whether a deficit continues to exist.(e) If the stabilization reserve fund exceeds the amount necessary to pay all losses, loss adjustment expense and operating expenses incurred as a result of policies issued by the association prior to January 1, 1986, the trust, as established by Ins 1703.09, shall return the excess to those health care providers who have been charged in a manner which is fair and equitable, or shall be applied against and reduce future assessments of the association.(f) Upon a determination by the board that the anticipated liabilities of the association derived from losses, loss adjustment expense and operating expenses incurred as a result of policies issued by the association prior to January 1, 1986 exceed the sum of the general assets of the association and the current balance of the stabilization reserve fund trust account, the commissioner shall impose a surcharge at a rate not to exceed 2% of the annual premium on policies issued or delivered in this state affording those lines of insurance which form the basis for members participation in the association. Pending collection of the surcharge, any monies necessary for the continued operation of the association may be obtained through assessments against the members of the Association in accordance with Ins 1703.07(a). The commissioner shall authorize members of the association to recoup their assessments by reimbursement from funds collected pursuant to the surcharge imposed by this paragraph. The member companies shall report to the commissioner by March 1 of each year pursuant to RSA 400-A:36 III, by annual statement line of business the amount of surcharges made for the preceding calendar year;(g) If the funds received from the association members as a result of the surcharges made in accordance with Ins 1703.08(f) exceed the amount necessary to pay all losses, loss adjustment and operating expenses associated with policies issued by the association prior to January 1, 1986, the board shall apply such excess in one or more of the following ways: (1) Repay those policyholders who were surcharged in accordance with Ins 1703.08(f), in proportion to the amount paid by each policyholder; and/or(3) Apply against and reduce future assessments of the association.(h) The "amount necessary to pay losses, loss adjustment expenses and operating expenses incurred" shall be determined using accepted actuarial methodologies and standards of practice. The process and time frame by which these amounts are determined shall be submitted to the commissioner for review and approval as being consistent with actuarial methodologies and standards of practice and RSA 412:15, 412:16 and 412:26, as well as Ins 1703.11 and Ins 902.(i) The board shall enter into such reinsurance arrangements it determines is appropriate to reduce the association's net liability. The cost of such reinsurance shall be considered to be a valid expense of the association for the purpose of Ins 1703.08N.H. Admin. Code § Ins 1703.08
#7112, eff 10-29-99; ss by #7409, eff 12-1-00, EXPIRED: 12-1-08
New. #9373, eff 1-30-09