Illinois Director of Insurance Michael McRaith has suspended the operations of medical liability insurer Professional Liability Insurance Company of America (PLICA). Under the Department of Insurance order dated Oct. 22, 2009, PLICA is prohibited from writing new policies or renewing existing policies in Illinois. Its certificate of authority to conduct business in Illinois has been suspended until Oct. 31, 2011.
According to the director’s order, financial statements submitted to the department by PLICA for the periods ending Dec. 31, 2008, March 31, 2009, and June 30, 2009, show the company has suffered debilitating losses. “It is evident … that PLICA is in such financial condition that further transaction of business in Illinois would be hazardous policyholders and creditors in this state and to the public,” the order stated.
The company reported a negative $2.8 million in net cash from operations at Dec. 31, 2008, and negative $2.9 million at June 30, 2009. It had an underwriting loss of more than $7.3 million in 2008, which resulted in a 44 percent loss of policyholder’s surplus, according to the order. The department estimated that the policyholder surplus loss had risen to 56 percent by the end of June due to further “unfavorable prior-year development.”
The department noted that the Connecticut Department of Insurance in August limited PLICA’s operations in that state to the service of existing business, which further limits the company’s ability to generate future revenues.
The company was ordered to continue paying justified policyholder claims. PLICA has 20 days to request a hearing to contest the suspension.
Source: Illinois Department of Insurance, insurance.illinois.gov
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