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.

Contact Information: Contact: Mechlin Moore Woodworth Public Affairs 239-777-1595 www.jmwoodworthrrg.com