- How was the JUA created?
- Who directs the business and affairs of the Association?
- Who sets the rates for the JUA?
- Are territorial considerations part of the rate-making process?
- What is the Policyholders Stabilization Reserve Fund?
- Why would a health care provider want to be insured through the JUA?
- Are policies subject to midterm cancellation?
- Can partnerships, professional associations or professional corporations be insured through the JUA?
- Does this affect the total amount of insurance available to a partner, member or shareholder through the JUA?
- Who can issue binders?
- What can a policyholder do to get out of the JUA?
- Is there a right to appeal if an applicant or insured is aggrieved by an act, ruling or decision of the Association?
- Under what circumstances may an assessment be levied?
- What is the present Texas statute of limitations for presenting medical liability claims?
- How must premiums be paid?
- What would disqualify an applicant or cause a policy to be canceled?
How was the JUA created?
By statute. The 64th Texas Legislature (1975) passed Senate Bill 491 which included a provision for creation of the JUA as a temporary solution to a market restriction in Medical (Professional) Liability Insurance. The bill was passed on May 29, 1975, and the first policy was effective on September 1, 1975.
Who directs the business and affairs of the Association?
A Board of Directors, elected by the member companies, directs the business and affairs of the Association subject to the supervision and control, at all times, of the Texas Department of Insurance.
Nine directors are elected at each annual meeting. Five directors represent the following organizations:
- the American Property Casualty Insurers Association;
- the National Association of Mutual Insurance Companies;
- the Insurance Council of Texas;
- a member insurer domiciled in Texas; and
- a member insurer either not domiciled in Texas or not a member of the represented organizations.
The remaining four directors shall be comprised of the following:
- one physician who is appointed by the Texas Medical Association or its successor;
- one representative of hospitals appointed by the Texas Hospital Association or its successor; and
- two members of the public to be appointed by the Texas Department of Insurance.
A general manager reports directly to the Board of Directors of the JUA and is responsible for the administration of all functions and services as may be reasonably required by the Board to provide for the economic, fair and nondiscriminatory management of the JUA.
Who sets the rates for the JUA?
The Board of Directors of the JUA determines the appropriate rates through independent actuarial studies. All rates are subject to the approval of the Texas Department of Insurance.
Are territorial considerations part of the rate-making process?
Yes. This is necessary because in some areas of the state, court awards have been historically higher for similar injuries.
What are the policyholders stabilization reserve funds?
Chapter 2203, Subchapter G (formerly Section 4A, Article 21.49-3), Insurance Code, as amended, created two Policyholders Stabilization Reserve Funds; one for physicians and other non-nursing home providers and another for nursing homes. Subchapter G provides that the funds be administered as provided in the Act and the Association's Plan of Operation. The Policyholders Stabilization Reserve Fund Charge is collected from each policyholder in addition to the annual premium and may be used only as the first line of recoupment when a deficit from operations is sustained. The Policyholders Stabilization Reserve Fund Charge is determined annually by advisory directors as designated by each eligible category of health care provider and is stated as a percentage of the annual premium.
The Policyholders Stabilization Reserve Fund Charge does not constitute a part of the premium and is not subject to premium taxation, servicing fees, acquisition costs, commissions and shall not be considered premium for the purpose of any assessments. The Policyholders Stabilization Reserve Fund charge is considered fully earned and non-refundable if a policy is canceled after remaining in force for more than ninety (90) days.
Why would a health care provider want to be insured through the JUA?
Because the health care provider is unable to purchase the desired Medical (Professional) Liability Insurance through the voluntary market.
Are policies subject to midterm cancellation?
Yes. A policy may be terminated by the Association for nonpayment of the premium, policyholders stabilization reserve fund charge, assessment, or cancellation, revocation or suspension of the license, charter, certification or accreditation of the insured to practice or provide health care services in the state. A ten (10) day advance written notice must be given.
Can partnerships, professional associations or professional corporations be insured through the JUA?
Yes, but only if the JUA also provides individual coverages for all those owning an interest in the professional organization to be insured.
Does this affect the total amount of insurance available to a partner, member or shareholder through the JUA?
The JUA, when insuring both an individual and the professional organization, can issue two policies, one for the individual and one for the professional organization, each of which may carry the maximum limit of coverage then available. If it is a single-member professional organization, one policy can be issued providing a single set of limits for both. If separate limits are desired, two policies can be issued.
Who can issue binders?
Only the JUA office as authorized by the general manager.
What can a policyholder do to get out of the JUA?
From an economical point of view, it is to the policyholder's advantage to purchase Medical (Professional) Liability Insurance from a private insurer. Voluntary market conditions change from time to time and the Association encourages policyholders and their agents to aggressively seek a private insurer. A risk may be removed from the JUA at any time without penalty by placing the coverage with a member company and giving the JUA thirty (30) days advance notice prior to the effective date of the change.
Is there a right to appeal if an applicant or insured is aggrieved by an act, ruling or decision of the Association?
Yes. The Plan of Operation provides that an applicant or insured may appeal to the JUA Board of Directors within 30 days of the action being challenged. The Board of Directors then must hear the appeal within 30 days of such notice. If the insured or applicant is aggrieved by the final action of the JUA Board, appeal can be made to the Texas Department of Insurance.
Under what circumstances may an assessment be levied?
An assessment may be levied when the JUA sustains a deficit from operations in a given calendar year. The Association shall have sustained a deficit from operations whenever the aggregate of the incurred losses (reported and unreported), plus all loss adjustment expenses incurred, plus commissions and plus other administrative expenses (including servicing carrier fees) incurred by the Association in a given calendar year exceed the aggregate of the net premiums earned and other net income (including investment income earned) realized by the Association in the same calendar year.
Any deficits sustained by the Association shall be recouped by one or more of the following procedures in this sequence:
First, a contribution from the Policyholders Stabilization Reserve Fund until the same is exhausted.
Second, an assessment upon those policyholders who held policies in force at any time within the two most recently completed calendar years in which the Association was issuing policies preceding the date on which the assessment was levied. No policyholder may be assessed for an amount exceeding 100% of the premium paid for the latest policy held within the assessment period.
Third, an assessment upon members of the Association. No member company may be assessed for an amount exceeding 1.0% of their policyholders surplus.
What is the present Texas statute of limitations for presenting medical liability claims?
Senate Bill 466 (passed in 1975) established a two year from date of occurrence statute of limitation for claims against health care providers. This applies to adults. Minors under 12 years of age now have until their 14th birthday to file a claim.
How must premiums be paid?
Payment of premium must be made by CASHIER'S CHECK, BANK DRAFT OR POSTAL MONEY ORDER and must accompany the application. Other forms of payment, including personal and agency checks cannot be accepted.
What would disqualify an applicant or cause a policy to be canceled?
Loss of license, certification or charter. Failure to pay premiums or assessments when due. Material misrepresentation of fact in the application. Failure to authorize and consent to investigation of material information affecting the application.