INCREASED OVERSIGHT OVER MALPRACTICE INSURANCE - This act deletes the provision which excludes professional malpractice insurance policies within the definition of commercial casualty insurance under Sections 379.882 and 379.888. This act subjects insurers writing professional malpractice insurance to the provisions of Section 379.321, RSMo, regarding the filing of rating plans with the Department of Insurance. Insurers writing medical malpractice insurance will also be subject to the provisions of Sections 383.400 to 383.412. The act also allows long-term care facilities to become members of 383 associations (Section 383.010).

This act subjects certain malpractice associations (383s) to Section 379.321 dealing with rate filing and notice requirements of commercial casualty insurance, Sections 374.202 to 374.207 on the examination powers of the Director of the Department of Insurance, and sections 383.400 to 383.412 relating to notification, data reporting, and rating requirements (Section 383.035).

REPORTING OF MALPRACTICE RATES - This act requires the director, beginning December 31, 2005, and annually thereafter, to report to the General Assembly the actual rates charged for malpractice insurance and a comparison to the rates of the previous year (Section 383.079). This provision is contained within a group of sections entitled legal malpractice insurance.

REPORTING OF MEDICAL MALPRACTICE CLAIMS - This act modifies the term "insurer" to include every entity operating under Chapter 383 including self-insured health care providers for the purposes of reporting medical malpractice claims with the Department of Insurance (Section 383.105). Any insurer that fails to timely report medical malpractice claim information shall be subject to penalties under Section 374.215 (Section 383.112).

MEDICAL MALPRACTICE JOINT UNDERWRITING ASSOCIATION - Under this act, all policy forms issued by the joint underwriting association shall be approved by the director. Under the current law, the association can use the policy form after 30 days have elapsed and the director has not delivered written disapproval to the association (Section 383.160). This act requires the additional first-year association charge of joint underwriting association policyholders to be in the form of cash or a cash equivalent and not in the form of a promissory note (Section 383.165).

NOTICE OF NONRENEWAL OR CANCELLATION - This act prohibits insurance companies and other entities providing medical malpractice insurance from: (1) increasing premiums and other surcharges more than 25% without 60 days' prior notice to the insured; (2) refusing to renew policies without 60 days' prior notice, unless the refusal to renew is based upon nonpayment of insurance premiums or license termination or suspension or a material change in the insured's health care practice; and (3) ceasing to issue insurance policies without 180 days' prior notice to the Department. Any insurer that fails to provide the required notice, at the option of the insured, shall be required to continue the coverage (Section 383.400).

DEPARTMENT OF INSURANCE OVERSIGHT OF SETTING MEDICAL MALPRACTICE INSURANCE RATES - This act requires the Department of Insurance to establish risk-reporting categories for medical malpractice insurance premiums and regulations for their reporting by May 30, 2006 (Section 383.401). The act requires insurance companies providing malpractice insurance to provide the Department of Insurance, by June 1, 2006, and annually thereafter, reports on premium rates charged by category (Section 383.402). The Department of Insurance, by December 31, 2008, and annually thereafter, shall establish and publish a market rate reflecting the median of the actual rates charged for each risk-reporting category for the preceding year (Section 383.403).

ESTABLISHMENT OF RATES - This act provides that, after January 1, 2009, insurance premium rates charged by insurance companies and other entities providing malpractice insurance to health care providers in Missouri which are no greater than 30% higher or lower than the published market rate will be presumed reasonable, and rates greater than 30% higher or lower will be presumed unreasonable. The act authorizes medical malpractice insurers to adjust insurance premium rates by scheduled rating or individual risk rating credits or debits (Section 383.404 and Section 383.405).

The act establishes a procedure by which medical malpractice insurers can make premium rate changes otherwise presumed unreasonable under Section 383.405 (greater than 30%), including: prior notice to the Director (60 days prior to the effective date of the proposed rate change); a hearing (within 30 days after receipt of the insurer’s notice); and an appeals process for the insurer if the Director determines the rate change to be unjustified.

The act requires the department to establish reporting standards for insurers to report base rates for health care provider classifications in categories determined to be actuarially appropriate. The department will create a database, available to the public, comparing base rates charged by insurers. The database may distinguish between rates for different types of coverage (Section 383.408).

The act requires the department to establish reporting standards for insurers or an advisory organization designated by the department to report annually on medical malpractice insurance premiums, losses, exposures, and other information the department requires for the purpose of compiling a rate-making database. The information collected will be used in assisting medical malpractice insurers in developing future rates and will be considered confidential. The department shall remove any information that identifies a particular insurer (Section 383.409).

PENALTIES - The act establishes penalties (not to exceed $500 per violation or $5,000 if determined to be a wilful violation) for violations of the act. The act also authorizes the director to suspend the license of any rating organization or insurer that fails to comply with the provisions of this act (Section 383.412).

DEFINITION OF CLAIM - The act requires the Department of Insurance to promulgate rules defining the term "claim" as it applies to claims made for medical malpractice (Section 383.430).

INSURANCE COMPANY INTERVENTION TO DETERMINE COVERAGE- Under this act, whenever a civil action is filed and an insurer may be obligated to provide a defense to such action or indemnity for any judgment rendered, the insurer shall have the right to intervene in such action and request the court to determine the extent of the it's coverage obligations, while reserving its rights with regard to providing coverage for the claims in the underlying civil action.

If an insurer does intervene, the court shall finally determine the extent of coverage before proceeding with the merits of the underlying action. The judgment of the trial court as to coverage shall be immediately appealable, notwithstanding issues relating to the underlying action remaining unresolved. When a judgment on the issues of coverage becomes final, the insurer shall be dismissed from the underlying action. If the insurer previously has undertaken the defense of the person named as a defendant in the underlying action and the final judgment on the coverage issues determines that it has no obligation to provide such defense, it may withdraw such defense (Section 507.091).

JOINT AND SEVERAL LIABILITY IN MEDICAL MALPRACTICE CLAIMS - Under this act, the principles of joint and several liability established in section 537.067 shall be applied (Section 38.230).

STEPHEN WITTE