§ 5502. Medical malpractice insurance association. (a) The medical
malpractice insurance association is continued consisting of all
insurers authorized to write and engaged in writing, within this state,
on a direct basis, personal injury liability insurance but excluding
assessment cooperative fire insurance companies transacting business
pursuant to article sixty-six of this chapter. Every such insurer shall
be and remain a member of the association as a condition of its
authority to continue to transact personal injury liability insurance in
this state.

(b) The association shall be a non-profit unincorporated association
constituting a legal entity separate and distinct from its members. All
funds and reserves of the association shall be separately held and
invested. It shall maintain complete accounts of all monies received and
all losses and expenses incurred in connection with its operations,
including investment income on policyholder-supplied funds. For the
purpose of any contributions required by insurers to the
property/casualty insurance security fund pursuant to article
seventy-six of this chapter, and for the purpose of the protection
afforded policyholders by such fund, the association is an authorized
insurer. The association shall include in the premiums charged for
medical malpractice insurance an amount sufficient to offset any such
contributions.

(c) (1) The purpose of the association is to provide, for the period
July first, nineteen hundred seventy-five through June thirtieth, two
thousand one, a market for medical malpractice insurance pursuant to
this article and subject to regulation pursuant to section two thousand
three hundred seventeen of this chapter. If, after June thirtieth, two
thousand one, the surcharges on premiums imposed pursuant to section
forty, as amended, of chapter two hundred sixty-six of the laws of
nineteen hundred eighty-six, by the superintendent to satisfy any
actuarially projected deficiency that is attributable to the premium
levels for policies providing coverage for physicians and surgeons
medical malpractice for the periods commencing July first, nineteen
hundred eighty-five and ending June thirtieth, two thousand one, are
still in effect or may still be reasonably imposed, the association
shall continue in existence until June thirtieth next following such
time as such surcharges are no longer imposed or may no longer be
reasonably imposed.

** (2) (A) The association shall, no later than December thirtieth,
nineteen hundred ninety-nine, submit to the superintendent for approval
a plan for the final dissolution of the association, including a
transfer or extinguishment of all liabilities of the association and a
plan for the servicing of existing policies of the association. The
dissolution of the association and cessation of its activities shall be
fully accomplished and the association shall be deemed dissolved at such
time and under such conditions as the superintendent deems proper;
provided, however, that all policies of insurance written by the
association shall expire or be transferred prior to such dissolution.

(B) In the preparation of a plan for the final dissolution of the
association, the board of directors of the association shall: (i)
solicit proposed plans for the dissolution of the association from at
least three outside entities; (ii) arrange for an independent actuarial
review of the association, its operations, assets and liabilities; and
(iii) recommend, by a majority vote of its board of directors, that
proposal which maximizes the value of the association to the state. The
association shall thereafter file all proposed plans, along with the
plan recommended by the board, to the superintendent for approval.

(C) (i) The superintendent shall, by April thirtieth, two thousand,
review all proposed plans, along with the recommended plan, filed by the
board of directors of the association with the superintendent and may
approve a plan of dissolution. The superintendent may determine to add
provisions which may vary from those submitted by the association or
delete others as proposed by the association or adopt an alternate plan.
Any plan of dissolution of the association which provides for the sale
or transfer of its operations, assets and/or liabilities to a private
entity shall do so net of any appropriated and encumbered amounts
required by subsection (c) of section five thousand five hundred
sixteen, subsection (c) of section five thousand five hundred sixteen-a,
subsection (c) of section five thousand five hundred sixteen-b,
subsection (c) of section five thousand five hundred sixteen-c and
subsection (c) of section five thousand five hundred sixteen-e of this
article and, in the event such plan is approved and implemented, such
sections five thousand five hundred sixteen, five thousand five hundred
sixteen-a, five thousand five hundred sixteen-b, five thousand five
hundred sixteen-c, and five thousand five hundred sixteen-e are hereby
deemed repealed. A public hearing shall be held to examine the proposed
plan of dissolution, the plans reviewed, and the superintendent's
recommended plan of approval. Such public hearing shall be held not
later than thirty days prior to the superintendent's approval of that
plan which maximizes the value of the association to the state while not
impairing or impeding the operation of the voluntary medical malpractice
insurance market or limiting the access to medical malpractice coverage
for health care practitioners or facilities insured by the association.
Upon approval, the superintendent shall certify the estimated amount of
funds to be transferred pursuant to subsection (b) of section five
thousand five hundred sixteen-f of this article and shall transmit such
certification to the director of the division of the budget.

To assist in making such determination, the superintendent may appoint
one or more qualified disinterested persons or institutions as
consultants to advise on any matters related to the dissolution. The
appointment of a consultant shall be in writing and shall set forth the
duties and responsibilities of the consultant. The association shall
provide access to the superintendent, and any consultants appointed by
the superintendent, to its books and records and any information in its
possession necessary to make valuations and determinations required by
this section. For the purposes of this section, all expenses and costs
associated with such appointment shall be deemed and considered expenses
pursuant to section three hundred thirteen of this chapter.

(ii) (I) Any action challenging the validity of or arising out of acts
taken or proposed to be taken under this paragraph two of this
subsection must be commenced within two months after a copy of the plan
of final dissolution of the association, with the superintendent's
approval endorsed thereon, has been filed in the office of the
superintendent.

(II) In any action arising out of acts taken or proposed to be taken
under this paragraph two of this subsection, the superintendent shall be
entitled to, at any stage of the proceedings before final judgment,
petition the court to give security for the costs and charges which may
be incurred by the superintendent in connection with such action and by
any other parties defendant in connection therewith or for which the
superintendent or the association may become liable under this chapter,
under any contract or otherwise by law, to which security the
superintendent shall have recourse in such amount as the court having
jurisdiction of such action shall determine upon termination of such
action. The amount of security may thereafter from time to time be
increased or decreased in the discretion of the court having
jurisdiction of such action upon showing that the security provided has
or may become inadequate or excessive.

(III) Any person aggrieved by any act taken or order, regulation, or
rule issued pursuant to this paragraph two of this subsection may
petition for judicial review of such acts taken or orders, regulations
or rules, pursuant to the limitations period prescribed in clause (I) of
item (ii) of this subparagraph. The petition shall be brought in the
appellate division of the supreme court in the third judicial
department. The jurisdiction of the appellate division of the supreme
court in the third judicial department shall be exclusive and its
judgment and order shall be final subject to review by the court of
appeals in the same manner and form and with the same effect as provided
for appeals in a special proceeding. All such proceedings shall be heard
and determined by the appellate division and by the court of appeals as
expeditiously as possible and with lawful precedence over other matters.
Acts taken or orders, regulations or rules issued pursuant to this
section shall not be stayed or enjoined except upon application to the
appellate division of the supreme court in the third judicial department
after notice to the superintendent and to the attorney general and upon
a showing that the petitioner has a substantial likelihood of success
and will suffer irreparable harm if the stay or injunction is not
granted.

(IV) Provided, however, that if a determination by a judicial
proceeding prevents the final consummation of the determination by the
superintendent that the association be dissolved, and if the amounts
required to be transferred and deposited from the association to the
miscellaneous special revenue fund pursuant to the requirements of
section five thousand five hundred sixteen-f of this article are not in
fact so transferred and deposited in the miscellaneous special revenue
fund, then the provisions of subsections (a) through (f) of section nine
thousand one hundred eleven-c of this chapter shall become operative and
the tax imposed by subsections (a) through (e) of such section shall be
imposed. Provided, further, however, that if there is thereafter a final
judicial determination that the final consummation of the dissolution of
the association may be effectuated, and the full transfer and deposit
shall be made to the miscellaneous special revenue fund, then in such
event the amount of the tax imposed and paid pursuant to the provisions
of subsections (a) through (e) of section nine thousand one hundred
eleven-c of this chapter shall be returned to the companies that paid
such assessment on a pro rata basis, in a manner consistent with the
procedures set forth in subsections (f) and (g) of section nine thousand
one hundred eleven-c of this chapter.

* (D) Prior to July first, two thousand, the superintendent shall,
after a public hearing to be held not less than thirty days before such
promulgation, promulgate regulations prescribing a plan for the
equitable distribution to authorized medical malpractice insurers
writing such coverage in the state the insureds of the association and
health care practitioners and facilities which are otherwise unable to
secure coverage in the voluntary market following the dissolution of the
association. Such plan shall provide that upon initial distribution to
the voluntary market the insureds of the association receive policies in
the voluntary market with provisions and at a rate which are at least as
favorable to the insured as those which they would have received if they
were issued a renewal policy by the association, provided, however, that
subsequent to the initial distribution, the plan shall not be required
to make available a second layer of excess medical malpractice insurance
to insureds. Such plan shall also ensure that all health care
practitioners or facilities have access to medical malpractice insurance
from an authorized insurer pursuant to the provisions of this chapter.
Such plan may also provide for, and the superintendent may designate, in
lieu of the plan for the equitable distribution of policies from the
association and the availability of coverages to health care
practitioners and facilities, a single entity or entities to provide
such coverages consistent with such a plan if the superintendent
determines that such entity or entities can provide the coverages
necessary to meet the purposes and objectives of an equitable plan of
distribution were it to have been effectuated. Notice of the hearing
required by this subparagraph shall be no less than thirty days before
the date of the hearing and shall include a summary of the plan proposed
by the superintendent.

* NB Effective until July 1, 2028

* (D) Prior to July first, two thousand, the superintendent shall,
after a public hearing to be held not less than thirty days before such
promulgation, promulgate regulations prescribing a plan for the
equitable distribution to authorized medical malpractice insurers
writing such coverage in the state the insureds of the association and
health care practitioners and facilities which are otherwise unable to
secure coverage in the voluntary market following the dissolution of the
association. Such plan shall provide that upon initial distribution to
the voluntary market the insureds of the association receive policies in
the voluntary market with provisions and at a rate which are at least as
favorable to the insured as those which they would have received if they
were issued a renewal policy by the association. Such plan shall also
ensure that all health care practitioners or facilities have access to
medical malpractice insurance from an authorized insurer pursuant to the
provisions of this chapter. Such plan may also provide for, and the
superintendent may designate, in lieu of the plan for the equitable
distribution of policies from the association and the availability of
coverages to health care practitioners and facilities, a single entity
or entities to provide such coverages consistent with such a plan if the
superintendent determines that such entity or entities can provide the
coverages necessary to meet the purposes and objectives of an equitable
plan of distribution were it to have been effectuated. Notice of the
hearing required by this clause shall be no less than thirty days before
the date of the hearing and shall include a summary of the plan proposed
by the superintendent.

* NB Effective July 1, 2028

** NB The plan referred to herein is Title 11 NYCRR, Chapter XX, Part
430

(d) Upon dissolution, the association shall not resume underwriting
operations for physicians, dentists, podiatrists, certified
nurse-midwives, certified registered nurse anesthetists or for hospitals
respectively, until the superintendent, after consultation with the
commissioner of health, has determined that medical malpractice
insurance is not readily available for physicians, dentists,
podiatrists, certified nurse-midwives, certified registered nurse
anesthetists or for hospitals, as the case may be, in the voluntary
market and has approved or promulgated a new plan of operation. If the
superintendent determines during such period that insurance is readily
available for physicians, dentists, podiatrists, certified
nurse-midwives, certified registered nurse anesthetists or for
hospitals, as the case may be, in the voluntary market, the
superintendent shall not authorize its underwriting operations for the
respective categories.

(e) The association shall, pursuant to the provisions of this article
and the plan of operation with respect to medical malpractice insurance,
have the power:

(1) To issue, or to cause to be issued, policies of insurance to
physician, dentist and podiatrist applicants subject to primary limits
specified in the plan of operation not in excess of one million dollars
for each claimant under one policy and three million dollars for all
claimants under one policy in any one year, and excess coverage as
provided in this paragraph. Each applicant shall be entitled to
purchase a policy providing primary limits not to exceed one million
dollars for each claimant and three million dollars for all claimants in
any one year. In addition, any applicant insured by the association in
an amount equal to or greater than one million dollars for each
claimant and three million dollars for all claimants in any one year, or
any other applicant covered under a policy or policies providing such
primary levels of insurance against liability for medical, dental or
podiatric malpractice that is issued by an authorized insurer, shall be
entitled to purchase a policy from the association providing excess
coverage of at least one million dollars per claimant and three million
dollars for all claimants in any one year. The association shall,
subject to the approval of the superintendent, make available, and if
requested by the applicant, provide additional excess coverage in an
amount requested by such applicant. With respect to the coverage
required to be made available on and after July first, nineteen hundred
eighty-five by this paragraph, the superintendent shall establish and
promulgate rates to be charged for such excess coverage and additional
excess coverage and shall require that the association accept payment
for such coverage from the hospital excess liability pool pursuant to a
payment schedule that is consistent with the receipt of funds by such
pool from the hospital reimbursement system. Rates for excess coverage
and additional excess coverage shall not be subject to the
stabilization reserve fund charge established by section five thousand
five hundred nine of this article.

(2) To issue, or cause to be issued, policies of insurance, including
incidental liability coverages, to hospital applicants subject to limits
specified in the plan of operation with limits not in excess of one
million dollars for each claimant and ten million dollars for all
claimants in any one year; provided that policies for coverage in excess
of one million dollars for each claimant and three million dollars for
all claimants in any one year shall be issued only upon the obtaining of
reinsurance for such excess coverage for the term of the policy and the
excess coverage shall remain in effect only so long as reinsurance is in
effect. The association shall obtain such reinsurance, if available, for
coverage in excess of one million dollars for each claimant and three
million dollars for all claimants in any one year. If the association
fails to obtain such reinsurance, the superintendent may order it to do
so for the term of the policy from sources found by him to be available.
The rates charged by the association for coverage in excess of three
million dollars shall not be subject to prior approval by the
superintendent, and shall equal the charges to the association for such
reinsurance.

(3) To underwrite such insurance and to adjust and pay losses or to
appoint service companies to perform those functions.

(4) To assume reinsurance from its members.

(5) To cede reinsurance.

(6) To make the lump sum payments provided for in subdivision (b) of
section five thousand thirty-six of the civil practice law and rules
and receive the periodic payments due under the annuity contract
provided for therein.