Contact Information: Contact: Mechlin Moore Woodworth Public Affairs 239-777-1595 www.jmwoodworthrrg.com
Risk Retention Groups Essential Alternative to Failing Malpractice Insurers in New York State
NEW YORK, NY--(Marketwire - August 15, 2007) - Well-capitalized and managed Risk Retention
Groups (RRG) provide the essential alternative to failing existing insurers
for New York physicians and surgeons seeking stable, comprehensive,
competitively priced malpractice insurance, Sanford "Sandy" Elsass,
President-Underwriting Manager for J. M. Woodworth RRG, told a
Congressional hearing today in Brooklyn.
Chaired by Rep. Edolphus Towns (10th District, NY), the hearing was
convened to examine malpractice insurance issues in the State following the
recently approved 14 percent rate increase. Elsass reported that J. M.
Woodworth, a doctor-owned insurance company, is writing malpractice
insurance that provides full coverage at rates, including stock purchase in
the Company, that are lower than the premiums charged by MLMIC and PRI, the
dominant carriers.
"Selective underwriting and professional risk management enable Woodworth
to offer comprehensive coverage at lower prices. We only take physicians
and surgeons with good track records," Elsass explained. Organized under
the Federal Risk Retention Act, amended in 1986, "The Company is well
financed with a sound capital structure. As a new carrier, Woodworth is not
saddled with past liabilities," he said.
As an RRG, Woodworth does not have access to the State's Guaranty Fund in
the event the Company fails, but its shareholders are not subject to
assessment in the event MLMIC or PRI fail. However, doctors insured by
Woodworth are protected by "A" rated reinsurance carriers.
Elsass pointed out that after rigorous analysis, Woodworth was recently
given a Financial Stability Rating® of "A" Exceptional by Demotech, Inc.,
the nationally recognized, independent rating agency. The "A" rating from
Demotech makes Woodworth the only carrier actively writing medical
malpractice insurance in New York State with an "A" rating.
Explaining the need for an alternative to New York's existing carriers,
Elsass cited a recent study by the widely recognized research firm,
Spinella & Associates. The report concluded that, "The regulatory and
claims operating environments for New York's mono-line medical professional
liability carriers renders them incapable of operating profitably over a
sustained period." The Spinella report showed that in the period 2001-2005,
the New York mono-line medical malpractice carriers lost $1.6 billion while
their counterparts in other states achieved positive pre-tax operating
income of $385 million.
"These findings demonstrate clearly the need for alternatives to the
existing carriers in New York. That's why doctors fed up with skyrocketing
premiums and a broken system banded together to form J. M. Woodworth Risk
Retention Group," Elsass said. "If medical malpractice carriers in other
states can make a profit, a new company with a strong capital structure,
selective underwriting, and professional risk management should be welcome
in New York. It's time to give competition a chance to offer doctors in
this State a better, more economical way to obtain comprehensive, secure
medical malpractice coverage."
Elsass sought the support of Rep. Towns along with state and local
officials in Woodworth's efforts to gain recognition by major hospital
systems.
J. M. Woodworth RRG, Inc. is managed by The Uni-Ter Group, operator of RRGs
that provide general and professional liability insurance to long-term care
facilities in 41 states, and malpractice insurance to nurses in Florida.
Uni-Ter is a subsidiary of U.S. RE Companies, Inc., the international
financial services firm based in New York City.
For more information, contact Mechlin Moore, Woodworth Public Affairs
(239-777-1595; mmoore7412@aol.com) and visit our website
www.jmwoodworthrrg.com.