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

                                  6026

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 19, 2009
                               ___________

Introduced by COMMITTEE ON RULES -- (at request of the Governor) -- read
  twice  and  ordered  printed,  and when printed to be committed to the
  Committee on Rules

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

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

S. 6026                             2

such deficiency. The superintendent  shall  not  impose  such  surcharge
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.