1.  What is the NEPRRG?

NEPRRG is a physicians insurance company owned exclusively by qualifying physicians who practice in the counties of Northeast Pennsylvania.

2.  What kind of company is NEPRRG?

NEPRRG is a special kind of insurance company called a risk retention group.   A risk retention group, or RRG, is a form of a captive insurance company owned by its insureds and authorized by a state to write liability insurance covering its owners. NEPRRG is formed under South Carolina law and is approved to write medical malpractice insurance in Pennsylvania. NEPRRG is a mutual insurance company.

3. How is NEPRRG governed?

NEPRRG is owned exclusively by its insured physicians. Presently, it has a Board of Directors composed of insured members and one statutory director from South Carolina. The Board will expand to include representatives throughout the seventeen-county region. Responsibilities of board members are significant.  

4. How does NEPRRG operate ?

NEPRRG does not have any employees. Its functions are carried out through professional service providers.

•  Stevens & Lee - Provides quality assurance and event management services, as well as representation of clients in the event of a claim.

•  The HDH Group, Inc,   - Processes applications and renewals, performs the underwriting, performs policy issuance, policy certificates, CAT/MCARE Fund filings and other documentation and recordkeeping, as well as claims administration.

•  Complete Actuarial Solutions - Created the NEPRRG's loss study and financial pro forma, and will assist with filing statutory statements, setting reserves and setting rates.

•  USA RIsk Group - Provides captive management services.

5.         What is the Northeast Physicians' Quality Assurance Committee?

An essential part of this insurance program is the Quality Assurance Program.    This committee will be composed of interested members of NEPRRG.   Adherence to the loss control program is mandatory in order to participate in the insurance program.  

6.         How are premiums determined?

Rates have been established by our actuary based upon the loss experience of the group as a whole and other relevant data. These will be constantly evaluated. Each physician is quoted a premium based upon his or her own specialty, historic losses, activity, and other objective data. Higher risk specialties pay more than lower risk types of practices.

7.         How is the company funded?

The majority of our initial capital came from leading healthcare institutions in the area.   The primary supporter was Community Medical Center of Scranton (CMC).   CMC has taken an active interest in assisting regional doctors with their malpractice coverage.

Membership in NEPRRG requires a one-time capitalization contribution, which is based on the rate for each specialty.  This capital investment is part of NEPRRG's surplus fund.  Annual premiums fund for NEPRRG's losses and expenses.

8.       What coverage form is offered?

NEPRRG offers claims-made coverage.

9.       Will I need to buy "claims made tail" coverage from my current insurer before entering this program?   (Note: This question applies if your expiring coverage is a "claims made" type of coverage.)

No, NEPRRG program utilizes the same retroactive date as you have under your current policy. This will avoid the need to purchase tail coverage. However, an additional charge is made for mature claims-made coverage, as compared to first year claims-made coverage.

10.        Does NEPRRG participate in the Pennsylvania Insurance Guaranty Association (PIGA)?

PIGA provides a limited form of financial backstop to policyholders of insolvent insurance companies. As an RRG, NEPRRG neither pays into PIGA nor receives any benefits from PIGA.  

11.       Will I be able to exit the captive?

Yes. It will be possible for any member to exit of his or her own free will, although the stability of the group is paramount. An exiting member may be able to obtain the return of his capital, provided the group obtains the necessary regulatory approval if the member retires or relocates his practice outside our coverage area.  

12.       Will I have personal liability for the losses of other members?

No. The RRG is a limited liability form of entity. While its assets are at risk to pay claims, no member is personally liable to pay the losses of other members.   Each member's liability is limited to the capital contributed by him or her and the premium dollars paid to the RRG.

13.  Are there other medical malpractice RRGs operating in the state?

There are a number of RRGs operating in the state.   The state has one of the highest percentages of RRGs insuring malpractice in the country.   We believe this is a result of the success of RRGs and the overall deterioration of the traditional medical malpractice marketplace.

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