Florida Statutes 627.357 – Medical malpractice self-insurance
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(1) DEFINITIONS.–As used in this section, the term:
(a) “Fund” means a group or association of health care providers authorized to self-insure.
Terms Used In Florida Statutes 627.357
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Member: means an insurer who participates in or is entitled to participate in the management of a rating, advisory, or other organization. See Florida Statutes 627.041
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Rate: means the unit charge by which the measure of exposure or the amount of insurance specified in a policy of insurance or covered thereunder is multiplied to determine the premium. See Florida Statutes 627.041
(b) “Health care provider” means any:
1. Hospital licensed under chapter 395.
2. Physician licensed, or physician assistant licensed, under chapter 458.
3. Osteopathic physician or physician assistant licensed under chapter 459.
4. Podiatric physician licensed under chapter 461.
5. Health maintenance organization certificated under part I of chapter 641.
6. Ambulatory surgical center licensed under chapter 395.
7. Chiropractic physician licensed under chapter 460.
8. Psychologist licensed under chapter 490.
9. Optometrist licensed under chapter 463.
10. Dentist licensed under chapter 466.
11. Pharmacist licensed under chapter 465.
12. Registered nurse, licensed practical nurse, or advanced practice registered nurse licensed or registered under part I of chapter 464.
13. Other medical facility.
14. Professional association, partnership, corporation, joint venture, or other association established by the individuals set forth in subparagraphs 2., 3., 4., 7., 8., 9., 10., 11., and 12. for professional activity.
(c) “Other medical facility” means a facility the primary purpose of which is to provide human medical diagnostic services or a facility providing nonsurgical human medical treatment and in which the patient is admitted to and discharged from such facility within the same working day, and which is not part of a hospital. The term does not include a facility existing for the primary purpose of performing terminations of pregnancies or an office maintained by a physician or dentist for the practice of medicine.
(d) “Hospital subsidiary corporation” means any corporation over which a hospital or the hospital’s parent corporation exercises financial or operational control and which provides health care services to the hospital or the hospital parent corporation or another hospital subsidiary corporation.
(e) “Hospital parent corporation” means any corporation which has financial or operational control over a hospital and which provides health care services to the hospital or another hospital subsidiary corporation.
(f) “Committee” means a committee or board of trustees of a health care provider or group of health care providers established to make recommendations, policies, or decisions regarding patient institutional utilization, patient treatment, or institutional staff privileges or to perform other administrative or professional purposes or functions.
(2) A group or association of health care providers composed of any number of members, is authorized to self-insure against claims arising out of the rendering of, or failure to render, medical care or services, or against claims for injury or death to the insured’s patients arising out of the insured’s activities, upon obtaining approval from the office and upon complying with the following conditions:
(a) Establishment of a Medical Malpractice Risk Management Trust Fund to provide coverage against professional medical malpractice liability.
(b) Employment of professional consultants for loss prevention and claims management coordination under a risk management program.
(3) The fund may insure hospital parent corporations, hospital subsidiary corporations, and committees against claims arising out of the rendering of, or failure to render, medical care or services.
(4) The fund is subject to regulation and investigation by the office. The fund is subject to rules of the commission and to part IX of chapter 626, relating to trade practices and frauds.
(5) The trust fund may purchase medical malpractice insurance, specific excess insurance, and aggregate excess insurance, up to determined limits, as necessary to provide the insurance coverages authorized by this section, consistent with market availability. The trust fund may purchase such risk management services as may be required, pay claims as may arise under any deductible provisions, and engage in prudent investment of trust funds and other activities reasonably relating to the payment of claims and to providing medical malpractice self-insurance, to the extent otherwise consistent with this section and law generally applicable to medical malpractice insurers.
(6) The commission shall adopt rules to implement this section, including rules that ensure that a trust fund remains solvent and maintains a sufficient reserve to cover contingent liabilities under subsection (7) in the event of its dissolution.
(7)(a) The liability of each member for the obligations of the trust fund is individual, several, and proportionate, but not joint, except as provided in this subsection.
(b) Each member has a contingent assessment liability for payment of actual losses and expenses incurred while the member’s policy was in force.
(c) The trust fund may from time to time assess members of the fund liable therefor under the terms of their policies and pursuant to this section. The office may assess the members in the event of liquidation of the fund.
(d) A member’s share of a deficiency for which an assessment is made is computed by applying to the premium earned on the member’s policy or policies during the period to be covered by the assessment the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment. If one or more members fail to pay an assessment, the other members are liable on a proportionate basis for an additional assessment. The fund, acting on behalf of all members who paid the additional assessment, shall institute legal action, when necessary and appropriate, to recover the assessment from members who failed to pay it.
(e) In computing the earned premiums for the purposes of this section, the gross premium received by the fund for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy.
(f) No member has an offset against any assessment for which the member is liable, on account of any claim for unearned premium of losses payable.
(g) If the assets of a trust fund are at any time insufficient to comply with the requirements of law, discharge the fund’s liabilities, or meet the required conditions of financial soundness, or if a judgment against the fund has remained unsatisfied for 30 days, the trust fund must immediately make up the deficiency or levy an assessment upon the members for the amount needed to make up the deficiency, subject to the limitations set forth in this subsection.
(h) If the trust fund fails to make an assessment as required by paragraph (g), the office shall order the fund to do so. If the deficiency is not sufficiently made up within 60 days after the date of the order, the fund is deemed insolvent and grounds exist to proceed against the fund as provided for in part I of chapter 631.
(i) Subject to this section, any rehabilitation, liquidation, conservation, or dissolution of a trust fund shall be conducted under the supervision of the department, which has all power with respect thereto granted to it under part I of chapter 631 governing the rehabilitation, liquidation, conservation, or dissolution of insurers.
(8) The expense factors associated with rates used by a fund shall be filed with the office at least 30 days prior to use and may not be used until approved by the office. The office shall disapprove the rates unless the filed expense factors associated therewith are justified and reasonable for the benefits and services provided.