Captive insurance companies offer a unique alternative to traditional relationships with insurance companies. Policyholders have an opportunity to share risks and enjoy rewards for improved claims experience.

Participating physicians or healthcare providers will receive a non-assessable PRI policy reinsured in part by a Bermuda-based captive in which they have an ownership stake. PRI will continue to provide comprehensive services and claims support in the usual and customary manner.

Through sharing risk, a physician group’s premium, loss results and net cost of insurance will be aligned. In addition, investments of physicians’ funds, structured to preserve principal and deliver a competitive rate of return, will be earmarked for their own benefit.

Dividends commensurate with performance can be declared and paid on a policyholder by policyholder basis, or alternatively surplus can be reinvested on a tax-advantaged basis.

Other opportunities likely will develop, such as purchase tax-advantaged life insurance or annuity products.

A group practice representing approximately 100 physicians and total premium of about $1 million will constitute a minimum threshold to comprise a separate subdivision of a captive. Alternatively, a hospital could participate together with its employed or voluntary medical staff physicians in a similar risk-sharing relationship with PRI. The practice entity or hospital would be the ultimate bearer of the portion of risk assumed from PRI and reinsured through the captive.

Profits generally will take at least three to five years to be ascertained and realized.

Premiums paid will be tax deductible so long as a significant amount of risk of unrelated parties was pooled.

Participants will have representation at PRI’s claims committee meetings and would make decisions concerning the selection of defense counsel.

Specialized risk management and loss control reports will be prepared by PRI on an ongoing basis.

All billing and collection of premium will be PRI’s responsibility.

Physicians’ Reciprocal Insurers is the second largest medical malpractice carrier in the State of New York and is in the top ten in the United States measured by gross premiums.

Jeanne H. Braun
Executive Vice President
Administrators for the Professions, Inc.
Attorney in Fact for
Physicians' Reciprocal Insurers
1999 Marcus Avenue, Suite 200
Lake Success, NY 11042
(516) 616-2500 , ext. 482

email: j.braun@medmal.com