New Jersey Commissioner Holly Bakke of the Department of Banking and Insurance recently called for a hearing to determine the availability of medical malpractice reinsurance in the New Jersey marketplace. Her announcement followed a notification by Princeton Insurance Company of its intention to temporarily suspend the writing of new policies effective Aug. 21, 2003.
Over the last year, despite the difficult market conditions, Princeton reportedly remained a committed player in the New Jersey marketplace. As other carriers exited the market and qualified New Jersey physicians lost their professional liability insurance, Princeton absorbed a considerable amount of that business. As a result of these efforts, Princeton’s book of business currently consists of 53 percent of the New Jersey marketplace. Along with this growth over the last year, Princeton cited its inability to secure reinsurance at traditional levels as a factor contributing to its current financial condition, making it necessary to temporarily suspend writing new business.
“Based on the substantial position Princeton occupies in the New Jersey marketplace and industry concerns that traditional reinsurance is not readily available, I am exercising my statutory authority to determine if reinsurance for medical malpractice coverage is unavailable in the New Jersey market. Should a Department hearing determine that reinsurance is unavailable, I am prepared to consider reactivating the Medical Malpractice Reinsurance Association,” Bakke stated.
“I am confident that Princeton’s decision is both a temporary and a responsible one, in the best interest of current Princeton policyholders. Physicians covered by PIC should be assured that the company will continue to meet its obligations to them, renew its existing book of business, and cover additional doctors who join practices Princeton now insures.”
Bakke further reassured policyholders stating, “While Princeton Insurance Company’s announcement may cause some concern among its policyholders, the Department of Banking and Insurance supports this move and believes that this is the most prudent course for the long-range protection of Princeton insureds. Princeton continues to act responsibly and cooperate fully with Department regulators as we work together to protect the interests of Princeton policyholders.”
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