S T A T E   O F   N E W   Y O R K
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                                  9036

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              June 20, 2009
                               ___________

Introduced by M. of A. GOTTFRIED -- (at request of the Governor) -- read
  once and referred to the Committee on Insurance

AN  ACT  to  amend  chapter  266 of the laws of 1986, amending the civil
  practice law and rules and other  laws  relating  to  malpractice  and
  professional medical conduct, in relation to the effectiveness thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 40 of chapter 266 of the laws of 1986, amending the
civil practice law and rules and other laws relating to malpractice  and
professional medical conduct, as amended by section 1 of part D of chap-
ter 497 of the laws of 2008, is amended to read as follows:
  S  40. The superintendent of insurance shall establish rates for poli-
cies providing coverage for physicians and surgeons medical  malpractice
for  the  periods  commencing  July  1,  1985  and ending June 30, 2011;
provided, however, that notwithstanding any other provision of law,  the
superintendent  shall not establish or approve any increase in rates for
the period commencing July 1, [2008] 2009 and  ending  June  30,  [2009]
2010.  The  superintendent shall direct insurers to establish segregated
accounts for premiums, payments, reserves and investment income  attrib-
utable to such premium periods and shall require periodic reports by the
insurers  regarding  claims and expenses attributable to such periods to
monitor whether such accounts will be sufficient to meet incurred claims
and expenses. On or after July 1, 1989, the superintendent shall  impose
a  surcharge  on  premiums  to  satisfy  a  projected deficiency that is
attributable to the premium levels established pursuant to this  section
for  such  periods;  provided, however, that such annual surcharge shall
not exceed eight percent of the established rate until July 1, 2011,  at
which  time  and  thereafter such surcharge shall not exceed twenty-five
percent of the approved adequate rate, and that such  annual  surcharges
shall continue for such period of time as shall be sufficient to satisfy
such  deficiency.  The  superintendent  shall  not impose such surcharge

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD12102-01-9
              

A. 9036                             2

during the period commencing July 1, [2008] 2009  and  ending  June  30,
[2009]  2010.    On  and after July 1, 1989, the surcharge prescribed by
this section shall be retained by  insurers  to  the  extent  that  they
insured physicians and surgeons during the July 1, 1985 through June 30,
2011  policy  periods;  in  the  event  and to the extent physicians and
surgeons were insured by another insurer during such periods, all  or  a
pro  rata  share of the surcharge, as the case may be, shall be remitted
to such other insurer in accordance with rules  and  regulations  to  be
promulgated by the superintendent.  Surcharges collected from physicians
and  surgeons  who  were not insured during such policy periods shall be
apportioned among all insurers in proportion to the premium  written  by
each  insurer  during such policy periods; if a physician or surgeon was
insured by an insurer subject to rates established by the superintendent
during such policy periods, and  at  any  time  thereafter  a  hospital,
health  maintenance organization, employer or institution is responsible
for responding in damages for liability arising out of such  physician's
or  surgeon's  practice  of medicine, such responsible entity shall also
remit to such prior insurer the equivalent amount  that  would  then  be
collected  as  a  surcharge if the physician or surgeon had continued to
remain insured by such prior insurer. In  the  event  any  insurer  that
provided  coverage  during  such  policy  periods is in liquidation, the
property/casualty insurance security fund shall receive the  portion  of
surcharges to which the insurer in liquidation would have been entitled.
The surcharges authorized herein shall be deemed to be income earned for
the  purposes of section 2303 of the insurance law.  The superintendent,
in establishing adequate rates and in determining  any  projected  defi-
ciency  pursuant  to  the requirements of this section and the insurance
law, shall give substantial weight, determined  in  his  discretion  and
judgment,  to  the  prospective  anticipated  effect  of any regulations
promulgated and laws enacted and the public benefit  of    stabilizing
malpractice rates and minimizing rate level fluctuation during the peri-
od  of  time  necessary for the development of more reliable statistical
experience as to the efficacy of such  laws  and  regulations  affecting
medical, dental or podiatric malpractice enacted or promulgated in 1985,
1986,  by this act and at any other time.  Notwithstanding any provision
of the insurance law, rates already established and to be established by
the superintendent pursuant to this section are deemed adequate if  such
rates  would be adequate when taken together with the maximum authorized
annual surcharges to be imposed for a reasonable period of time  whether
or  not  any  such  annual surcharge has been actually imposed as of the
establishment of such rates.
  S 2. This act shall take effect immediately.