Oklahoma-based Physicians Liability Insurance Company (PLICO) announced that in just over two years it has overcome a $143 million surplus deficit. Carl Hook, M.D., president and CEO of PLICO, said the company met the goal 1.5 years in advance of a state-mandated deadline.
PLICO, the state’s largest medical liability insurer, was placed under supervision by the Oklahoma Department of Insurance in 2004.
Due to a medical professional liability crisis for loss years 1998 through 2001, which resulted in a huge increase in the size of awards as well as an increase in the frequency of claims reported, independent actuaries determined PLICO to have a surplus deficit in December of 2003. At the time it maintained no reinsurance to cover its deficit.
A Capitalization Plan was developed and implemented on July 1, 2004, to address the problem.
The state legislature in 2004 passed a bill temporarily exempting from PLICO reserve requirements, giving it until Jan. 1, 2006, to build sufficient reserves. In 2005, the deadline was extended to Dec. 31, 2008.
The insurance department approved a series of rate increase for the company beginning in 2004. Part of the proceeds from the rate increases was to be used to buy reinsurance.