AB 808

The health care liability provisions of the statutes require certain health care

providers to carry health care liability (medical malpractice) insurance with liability

limits of at least $1,000,000 for each occurrence and at least $3,000,000 for all

occurrences in a policy year. Any portion of a medical malpractice claim that exceeds

the policy limits is paid by the Injured Patients and Families Compensation Fund

for health care providers that are subject to the health care liability provisions.

Under current law, a health care provider may satisfy the requirement for liability

coverage either by being covered under a policy issued by an insurer authorized to

do business in this state or by qualifying as a self-insurer in accordance with

conditions established by the commissioner of insurance (commissioner).

This bill authorizes a health care provider to satisfy the liability coverage

requirement by being covered under a policy issued by an insurer that is a risk

retention group that is domiciled in another state. Although not authorized to do

business in this state, the risk retention group must be registered with the

commissioner and approved by the commissioner to provide health care liability

insurance coverage to health care providers under the health care liability provisions

of the statutes. Under the bill, any such risk retention group is subject to all the

requirements under the health care liability provisions of the statutes that apply to

other insurers that provide health care liability insurance coverage under the health

care liability provisions of the statutes, including policy approval by the

commissioner, assessments for the peer review council, mandated payment of

specified costs in the settlement or defense of claims, and reporting requirements

related to claims paid. Current law defines a risk retention group with the meaning

given under federal law, which is, generally, a corporation or limited liability

company whose primary activity is assuming and spreading the liability exposure

of its group members; that is chartered or licensed as a liability insurance company

under the laws of a state; that has as its owners only persons who comprise the

membership of the group and who are provided insurance by the group, or that has

as its sole owner an organization that has as its members only persons who comprise

the membership of the group and as its owners only persons who comprise the

membership of the group and who are provided insurance by the group; and whose

members are engaged in businesses or activities similar or related with respect to the

liability to which such members are exposed by virtue of any related, similar, or

common business, services, or operations.