§ 383.206 — Sale of health care provider policy prohibited, when — determining factors — insurer may charge additional premium or grant discount, when — supporting data — rulemaking authority.

Missouri § 383.206

• Jurisdiction: Missouri
• Title XXIV: BUSINESS AND FINANCIAL INSTITUTIONS
• Ch. 383: Malpractice Insurance

Text

1.  Notwithstanding the provisions of sections 383.037 and 383.160 , no insurer shall issue or sell in the state of Missouri a policy insuring a health care provider, as defined in section 538.205 , for damages for personal injury or death arising out of the rendering of or failure to render health care services if the director finds, based upon competent and compelling evidence, that the base rates of such insurer are excessive, inadequate, or unfairly discriminatory.  A rate may be used by an insurer immediately after it has been filed with the director, until or unless the director has determined under this section that a rate is excessive, inadequate, or unfairly discriminatory.

2.  In making a determination under subsection 1 of this section, the director of the department of commerce and insurance may use the following factors:

(1)  Rates shall not be excessive or inadequate, nor shall they be unfairly discriminatory;

(2)  No rate shall be held to be excessive unless such rate is unreasonably high for the insurance proved with respect to the classification to which such rate is applicable;

(3)  No rate shall be held to be inadequate unless such rate is unreasonably low for the insurance provided with respect to the classification to which such rate is applicable;

(4)  To the extent Missouri loss experience is available, rates and projected losses shall be based on Missouri loss experience and not the insurance company's or the insurance industry's loss experiences in states other than Missouri unless the failure to do so jeopardizes the financial stability of the insurer; provided however, that loss experiences relating to the specific proposed insured occurring outside the state of Missouri may be considered in allowing a surcharge to such insured's premium rate;

(5)  Investment income or investment losses of the insurance company for the ten-year period prior to the request for rate approval may be considered in reviewing rates.  Investment income or investment losses for a period of less than ten years shall not be considered in reviewing rates.  Industrywide investment income or investment losses for the ten-year period prior to the request for rate approval may be considered for any insurance company that has not been authorized to issue insurance for more than ten years;

(6)  The locale in which the health care practice is occurring;

(7)  Inflation;

(8)  Reasonable administrative costs of the insurer;

(9)  Reasonable costs of defense of claims against Missouri health care providers;

(10)  A reasonable rate of return on investment for the owners or shareholders of the insurer when compared to other similar investments at the time of the rate request; except that, such factor shall not be used to offset losses in other states or in activities of the insurer other than the sale of policies of insurance to Missouri health care providers; and

(11)  Any other reasonable factors may be considered in the disapproval of the rate request.

3.  The director's determination under subsection 1 of this section of whether a base rate is excessive, inadequate, or unfairly discriminatory may be based on any subcategory or subspecialty of the health care industry that the director determines to be reasonable.

4.  If actuarially supported and included in a filed rate, rating plan, rule, manual, or rating system, an insurer may charge an additional premium or grant a discount rate to any health care provider based on criteria as it relates to a specified insured health care provider or other specific health care providers within the specific insured's employ or business entity.  Such criteria may include:

(1)  Loss experiences;

(2)  Training and experience;

(3)  Number of employees of the insured entity;

(4)  Availability of equipment, capital, or hospital privileges;

(5)  Loss prevention measures taken by the insured;

(6)  The number and extent of claims not resulting in losses;

(7)  The specialty or subspecialty of the health care provider;

(8)  Access to equipment and hospital privileges; and

(9)  Any other reasonable criteria identified by the insurer and filed with the department of commerce and insurance.

5.  Supporting actuarial data shall be filed in support of a rate, rating plan, or rating system filing, when requested by the director to determine whether rates should be disapproved as excessive, inadequate, or unfairly discriminatory, whether or not the insurer has begun using the rate.

6.  The director of the department of commerce and insurance shall promulgate rules for the administration and enforcement of this section.  Any rule or portion of a rule, as that term is defined in section 536.010 , that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028 .  This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2006, shall be invalid and void.

Legislative History

(L. 2006 H.B. 1837 § 383.198)