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2003 SESSION


CHAPTER 1026
An Act to amend and reenact § 38.2-2801 of the Code of Virginia, relating to the medical malpractice joint underwriting association; activation.
[S 1316]
Approved April 2, 2003

Be it enacted by the General Assembly of Virginia:

1. That § 38.2-2801 of the Code of Virginia is amended and reenacted as follows:

§ 38.2-2801. Association activation; members; purpose; determinations by Commission; powers of association.

A. After investigation, notice, and hearing, The Commission shall be empowered to activate a joint underwriting association if, after investigation, notice, and hearing, it finds that medical malpractice insurance cannot be made reasonably available in the voluntary market for a significant number of any class, type, or group of providers of health care. The association shall consist of all insurers licensed to write and engaged in writing liability insurance within this Commonwealth on a direct basis except those exempted from rate regulation by subsection C of § 38.2-1902. Each such insurer shall be a member of the association as a condition of its license to write liability insurance in this Commonwealth.

B. The purpose of the association shall be to provide a market for medical malpractice insurance on a self-supporting basis without subsidy from its members.

C. 1. The association shall not commence underwriting operations for any class, type or group of providers of health care until it is activated by the Commission. At the direction of the Commission, the association shall commence operations in accordance with the provisions of this chapter.

2. If the Commission determines at any time that medical malpractice insurance can be made reasonably available in the voluntary market for any class, type or group of providers of health care, the association shall, at the direction of the Commission, cease its underwriting operations for that class, type or group of providers of health care.

D. The Commission shall also determine after investigation and a hearing whether the association shall be the exclusive source of medical malpractice insurance for any class, type or group of providers of health care and the type of policy or policies that shall be issued to any class, type or group of providers of health care. If the Commission determines that a claims-made policy will be issued to any class, type or group of providers of health care, the Commission shall also provide for the guaranteed availability of insurance that covers claims that (i) result from incidents occurring during periods when the basic claims-made policies are in force, and (ii) are reported after the expiration of the basic claims-made policies. The Commission may from time to time after an investigation and hearing reexamine and reconsider any determination made pursuant to this subsection.

E. Pursuant to this chapter and the plan of operation required by § 38.2-2804, the association shall have the power on behalf of its members to: (i) issue, or cause to be issued, policies of medical malpractice insurance to applicants, including incidental coverages, subject to limits as specified in the plan of operation but not to exceed one $1 million dollars for each claimant under any one policy and three $3 million dollars for all claimants under one policy in any one year; (ii) underwrite the insurance and adjust and pay losses on the insurance; (iii) appoint a service company or companies to perform the functions enumerated in this subsection; (iv) assume reinsurance from its members; and (v) reinsure its risks in whole or in part.

2. That the State Corporation Commission shall immediately commence an investigation of the voluntary market for medical malpractice insurance as provided for in § 38.2-2801. The Commission shall report its findings and recommended actions to the Governor and the chairmen of the Commerce and Labor committees of the General Assembly no later than December 31, 2003.

3. That an emergency exists and this act is in force from its passage.