Q. In what form has EMPAC RRG been organized?
A. EMPAC RRG has been organized as a reciprocal insurance exchange under the laws of the State of Nevada and operates under the Liability Risk Retention Act of 1986, as amended (the “Act”). A RRG is licensed in one state and “registered” in all other states that it anticipates doing business in. RRGs are not eligible for state insolvency funds but, as with Surplus Lines insurers, they are not required to pay into such insolvency fund assessments.
Q. Does the program have reinsurance?
A. Yes. The company purchases reinsurance that provides a limit of up to $750,000 per loss, per insured, excess of EMPAC RRG’s primary retention layer of $250,000 per loss, per insured. The reinsurance was previously provided by certain Lloyds syndicates, each of which is approved by the Nevada Division of Insurance and has an A.M. Best rating of A- (excellent) or better and since July 2010 reinsurance has been provided by AmTrust which has an A.M. Best rating of A (excellent).
Q. Is EMPAC RRG rated?
A. EMPAC RRG has received an A rating by Demotech, a financial analysis and actuarial services firm serving the P&C insurance industry since 1985. Demotech was the first company to have its rating process formally reviewed and accepted by Fannie Mae (1989) and Freddie Mac (1990) and HUD (1994).
Q. Have doctor-owned insurance companies been successful?
A. The advantages of doctor-owned or operated companies over commercial insurance carriers are numerous, especially for a single specialty program such as EMPAC RRG. With a doctor-owned insurance company the physician led board of directors have complete control over the program hopefully resulting in a situation where savings that have materialized through improved claims experience and efficient operation have been returned to doctor-policyholders either in the form of dividends or reduced premiums. Financial success is also found in many cases where doctor-owned companies vigorously defend their insureds when peer review indicates that negligence was nonexistent rather than following the route of commercial companies who are too often willing to settle unwarranted and frivolous claims, despite the resulting effect on the physician’s professional reputation. In addition, since physicians examine the claims, physician-owned companies such as EMPAC RRG uses this information to develop effective and acceptable risk management programs.
Today, RRGs have become solid financial enterprises in the marketplace as is evident in fields such as Anesthesia, Oral Surgery, and Ophthalmology. Most importantly, RRGs such as EMPAC RRG maintain their strong commitment to providing a safer and more cost-effective healthcare environment.