N.J. Stat. § 17:30D-1 Short title
This act shall be known and may be cited as the "Medical Malpractice Liability Insurance Act." L.1975, c. 301, s. 1, eff. Jan. 30, 1976.
N.J. Stat. tit. 17, ch. 30D
N.J. Stat. tit. 17, ch. 30D
in effectN.J. Stat. § 17:30D-2 Purpose; application to medical malpractice liability insurance
a. The purpose of this act is to assure that medical malpractice liability insurance is readily available to licensed medical practitioners and health care facilities by establishing a reinsurance association, requiring the association to reinsure medical malpractice liability insurance policies issued by certain providers and permitting the association to write such policies on a direct basis, to determine when the association has sustained a deficit, and to provide for recoupment of losses resulting from the operation of the association through surcharges on insureds and to grant the Commissioner of Insurance temporary emergency powers to set up and operate the reinsurance association if such insurance is unavailable for any class of licensed medical practitioners or health care facilities. b. This act shall apply to medical malpractice liability insurance as defined herein. L.1975, c. 301, s. 2, eff. Jan. 30, 1976. Amended by L.1978, c. 153, s. 1.
N.J. Stat. § 17:30D-3 Definitions.
3. As used in this act: a. "Association" means the New Jersey Medical Malpractice Reinsurance Association established pursuant to the provisions of this act. b. "Commissioner" means the Commissioner of Banking and Insurance. c. "Licensed medical practitioner" means and includes all persons licensed in this State to practice medicine and surgery, chiropractic, podiatric medicine, dentistry, optometry, psychology, pharmacy, nursing, physical therapy and as a bioanalytical laboratory director. d. "Medical malpractice liability insurance" means insurance coverage against the legal liability of the insured and against loss, damage or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional service by any licensed medical practitioner or health care facility or a claim arising out of ownership, operation or maintenance of the practitioner's or facility's business premises, including primary and excess coverages. e. "Health care facility" means and includes all hospitals within this State, and any other health care facility as defined in the "Health Care Facilities Planning Act." P.L.1971, c.136 (C.26:2H-1 et seq.). f. "Plan of operation" means the plan of operation of the association approved by the commissioner pursuant to the provisions of this act. g. "Net direct premium written" means direct written personal injury liability and property damage liability insurance as provided in R.S.17:17-1 d. and e., excluding workmen's compensation and employer's liability insurance written in connection therewith, less policyholder dividends and return premiums for the unused or unabsorbed portion of premium deposits and excluding premiums ceded to or written by the association. h. "Provider" means an insurer admitted and licensed in this State to write general liability insurance which has been qualified by the board of directors of the association and has not been disqualified by the commissioner. L.1975,c.301,s.3; amended 1978, c.153, s.2; 2005, c.259, s.23.
N.J. Stat. § 17:30D-4 Medical malpractice reinsurance association; creation; members; funds and reserves; accounts
There is hereby created an unincorporated, nonprofit association to be known as the New Jersey Medical Malpractice Reinsurance Association constituting a legal entity separate and distinct from its members. Every insurer authorized to write, and engaged in writing within this State, on a direct basis, personal injury and property damage liability insurance as provided in R.S. 17:17-1 d. and e., excluding such insurers which are engaged in writing only workmen's compensation and employer's liability insurance written in connection therewith shall be and shall continue to be a member of the association and shall be bound by the plan of operation thereof as a condition of its authority to continue to transact such personal injury and property damage liability insurance in this State. All funds and reserves of the association shall be separately held and invested. The association shall maintain complete accounts of all moneys received including investment income and all losses and expenses incurred in connection with its operation. No part of the net earnings of the association shall inure to the benefit of any member insurer. L.1975, c. 301, s. 4, eff. Jan. 30, 1976. Amended by L.1978, c. 153, s. 3.
N.J. Stat. § 17:30D-5 Powers and duties of association
The association shall, pursuant to the provisions of this act and the plan of operation, have the power: a. To assume or cede 100% reinsurance or a lesser percentage on any policy of insurance or binder subject to this act; b. To provide separate accounts for categories and subcategories of insureds reinsured or insured by the association; c. To maintain relevant loss, expense and premium data relative to all risks reinsured in or insured by the association and to require each member to furnish statistics in connection with insurance ceded to the association at such times and in such form and detail as may be deemed necessary; d. To establish fair and reasonable procedures to assess members whenever the assets of the association and the New Jersey Medical Malpractice Reinsurance Recovery Fund are insufficient to pay claimants as required by this act for their appropriate shares in accordance with participation ratios to be established in the plan of operation on the basis of the ratio of the members' net direct premiums written bears to the total net direct premium written by all members in this State on insurance against liability for damages to persons or property as provided in R.S. 17:17-d. and e., excluding workmen's compensation and employer's liability insurance written in connection therewith; e. To receive and distribute all sums required by the operation of the association; f. To establish procedures for reviewing claims procedures and practices of providers and in the event that the claims procedures or practices of any provider are considered inadequate to properly service the risks ceded by it to the association, the association may establish a claims program that will undertake to adjust or assist in the adjustment of claims for the provider on risks ceded by it, and in such event shall charge such provider a reasonable fee for establishing and operating such claim program; g. To audit the operations of member companies to such extent as the board of directors determines to be necessary to assure compliance with this act, in a reasonable manner and at such reasonable time or times prescribed by the board of directors; h. To sue and be sued, provided that no judgment against the association shall create any direct liability in the individual member companies, and the association may provide for the indemnification of its member companies, members of the board of directors and officers and employees and such other persons acting on behalf of the association to the extent permitted by law; i. To review the market for insurance subject to this act throughout this State to make certain that eligible risks can readily obtain such insurance, to provide in the plan of operation a reasonable means for achieving this objective by requiring all members, in a fair and equitable manner, to discharge their responsibilities under this act and to establish for each category or subcategory of insureds limits of liability for medical malpractice liability insurance; j. To prepare and file rates, rating plans, rules, classifications and policy forms to be used by the association in writing medical malpractice liability insurance on a direct basis; k. To issue binders or policies of medical malpractice liability insurance in accordance with this act and to adjust and pay losses with respect thereto, or to appoint service companies to perform those functions. L.1975, c. 301, s. 5, eff. Jan. 30, 1976. Amended by L.1978, c. 153, s. 4.
N.J. Stat. § 17:30D-6 Temporary board of directors; powers and responsibilities
Within 30 days after the effective date of this act, the commissioner shall call an organization meeting of the association for the purpose of constituting a temporary board of directors. The commissioner shall appoint nine members to serve as members of the board of directors after consultation with all the members of the association, and in making such appointments he shall give due consideration to the various methods of operation and the distribution by class of risks among the members. The commissioner shall appoint three representatives of licensed producers to be members of the board of directors. Each member of the board of directors shall be entitled to one vote. The producer representatives on the board of directors shall be eligible to vote on all matters not directly involving the association's budget and personnel administration. Except as may be delegated to others in the plan of operation or reserved to the members, the board of directors shall have full power and responsibility for the establishment and operation of the association. L.1975, c. 301, s. 6, eff. Jan. 30, 1976.
N.J. Stat. § 17:30D-7 Plan of operation; review and approval; certification; amendment.
7. a. Within such a time as shall be prescribed by the commissioner in written notice to the board, the directors shall submit to the commissioner, for his review and approval, a proposed plan of operation. Such plan shall provide for the establishment of a permanent board of directors, the length of terms of the directors and the method of their selection, for economical, fair and nondiscriminatory administration and for the prompt and efficient provision of medical malpractice liability insurance throughout the State. Such proposed plan shall include: preliminary assessment of all members for initial expenses necessary to commence operations; establishment of necessary facilities; management of the association; assessment of members; underwriting standards; procedures for acceptance and session of reinsurance; and such other provisions as may be deemed necessary by the commissioner to carry out the purposes of this act. The plan of operation shall provide that the premium charged for reinsurance shall be the premium charged for the coverage and limits ceded less than expense allowances. The expense allowances shall consist of the amounts actually incurred by the provider on the ceded risk subject to a maximum of the total expense allowances provided in rate-making for the respective categories and subcategories of medical malpractice liability insurance in the latest rate revision or experience review for the provider accepted by the commissioner. b. The proposed plan shall be reviewed by the commissioner and approved by him if he finds that such plan fulfills the purposes of this act. In his review of the proposed plan the commissioner may, in his discretion, consult with the directors and other members of the association and any other individual or organization. If the commissioner approves the proposed plan he shall certify such approval to the directors and said plan shall take effect 10 days after such certification. If the commissioner disapproves all or any part of the proposed plan of operation he shall return same to the directors with a statement, in writing, of the reasons for his disapproval and any recommendations he may wish to make. The directors may accept the commissioner's recommendations, or may propose a new plan, which accepted recommendations or a new plan shall be submitted to the commissioner within 30 days after the return of a disapproved plan to the directors. If the directors do not submit a proposed plan of operation within the time prescribed by the commissioner, or a new plan which is acceptable to the commissioner, or accept the recommendations of the commissioner within 30 days after the disapproval of a proposed plan, the commissioner shall promulgate a plan of operation and certify same to the directors. Any such plan promulgated by the commissioner shall take effect 10 days after certification to the directors. c. The directors of the association may, on their own initiative, amend the plan of operation at any time, subject to the approval by the commissioner. d. The commissioner may review the plan of operation whenever he deems expedient, and shall review same at least once a year, and may amend said plan after consultation with the directors and upon certification to the directors of such amendment. L.1975,c.301,s.7; amended 1978,c.153,s.5.
N.J. Stat. § 17:30D-8 Insureds without availability of insurance; activation of association; designation of provider or direct basis insurance; acceptance of risks; noninterference with agents
On and after the date that reinsurance is available from the association: a. The commissioner after a hearing and on the basis of the facts developed at such hearing may make a finding that medical malpractice liability insurance is not readily available for any category or subcategory of insureds to which this act applies, and after such a finding activate the facility with respect to such category or subcategory. b. Upon such activation, the board shall issue an invitation to each member of the association which has written during the 24 months preceding the date of such activation medical malpractice liability insurance of the type for which the association was activated anywhere in the United States of America, to become a qualified provider of such coverage in this State. If the board qualifies no company as a provider or if the commissioner determines after a hearing and on the basis of facts developed at such hearing, that the company or companies were not properly qualified, the commissioner shall order the association to write medical malpractice liability insurance on a direct basis and the association shall file within 30 days rates, rating plans, rules and classifications for the category or subcategory of insureds for which the association will be writing insurance on a direct basis. If the association does not submit such a filing within the prescribed number of days or during any extension granted by the commissioner, the commissioner shall promulgate the rates, rating plans, rules and classifications, certify same and order the association to insure eligible risks in accordance with the terms of his order. Qualified providers shall be compensated in accordance with the provisions of the plan of operation. c. No member of the association qualified as a provider in accordance with this section shall refuse to issue to any eligible risk a policy of insurance of the type normally afforded by such insurer to the public, utilizing the rates, rating plans, rules and classification systems then in effect for such insurer; provided, however, that the coverages and coverage limits to be afforded may be ceded to the association; and provided further that nothing herein contained shall require an insurer to accept any risk if such insurer's policy forms or rates do not apply to such risk; d. No duly licensed insurance agent of a qualified provider broker or solicitor shall refuse to furnish to any eligible risk quotations of premiums for such provider with whom such agent, broker or solicitor regularly places medical malpractice liability insurance policies, or shall fail to submit any eligible risk to such provider; e. No company shall terminate any agent or restrict the authority of any agent, directly or indirectly, or in any manner whatsoever, solely by reason of the volume of such agent's business it cedes to the association or the experience produced by such ceded business. Neither shall any company make any distinction in remuneration to the agent between business retained and business ceded, or use any promise of reward or threat of penalty, present or future, or any device whatever, related to certain classes of risks or other classes of business, which would tend to induce the agent to avoid certain classes or types of risks. L.1975, c. 301, s. 8, eff. Jan. 30, 1976. Amended by L.1978, c. 153, s. 6.
N.J. Stat. § 17:30D-9 Medical malpractice reinsurance recovery fund; creation; purpose; contents; administration
There is hereby created a fund to be known as the New Jersey Medical Malpractice Reinsurance Recovery Fund (hereinafter referred to as the recovery fund). The purpose of the recovery fund is to provide a financial backup for the plan of operation of the association and shall be used to reimburse the association for any deficit sustained in the operation of the association. A deficit shall exist whenever the sum of the earned premiums collected by the association and the investment income therefrom is exhausted by virtue of payment of or allocation for the association's necessary administrative expenses, reimbursements to members for any and all assessments levied as a result of their participation in the association, losses, loss adjustment expenses and reserves, including reserves for losses incurred, losses incurred but not reported and loss adjustment expenses. The recovery fund shall consist of all payments made to it by insurers as hereinafter provided, of securities acquired by and through the use of moneys belonging to the recovery fund, moneys appropriated to the recovery fund, together with interest and accretions earned upon such payments or investments. The recovery fund shall be administered by the commissioner and the State Treasurer in accordance with the provisions of this act. L.1975, c. 301, s. 9, eff. Jan. 30, 1976. Amended by L.1978, c. 153, s. 7.
N.J. Stat. § 17:30D-10 Additional premium charges on policies of medical malpractice liability insurance
For the purpose of providing moneys necessary to establish the recovery fund in an amount sufficient to meet the requirements of this act, the commissioner shall establish reasonable provisions through additional premium charges for policies of the various categories and subcategories of medical malpractice liability insurance. Such provisions may vary by category or subcategory of risk in reasonable relationship to the loss experience both past and prospective of the association and its members attributable to such category or subcategory. L.1975, c. 301, s. 10, eff. Jan. 30, 1976.
N.J. Stat. § 17:30D-11 Recovery fund; custodian; disbursements; investment
The fund created by this act shall be separate and apart from any other fund and from all other State moneys. The State Treasurer shall be custodian of the fund and all disbursements from said fund shall be made by the treasurer upon vouchers signed by the commissioner. The moneys in the fund shall be invested and reinvested by the Director of the Division of Investment as other trust funds in the custody of the State Treasurer in the manner provided by law. L.1975, c. 301, s. 11, eff. Jan. 30, 1976.
N.J. Stat. § 17:30D-12 Rules and regulations; suspension or revocation of certificate of authority of insurer for noncompliance
The commissioner may promulgate reasonable rules and regulations to carry out the purposes of this act, and may suspend or revoke, after reasonable notice and a hearing, the certificate of authority to transact insurance in this State of any insurer which fails to comply with the provisions of this act, rules or regulations promulgated thereunder or any plan of operation. L.1975, c. 301, s. 12, eff. Jan. 30, 1976.
N.J. Stat. § 17:30D-13 Emergency powers of commissioner upon activation of association; duration
Upon finding that immediate activation of the association for any category or subcategory of insureds is required because medical malpractice liability insurance is or will be unavailable for such category or subcategory, the commissioner shall have the following emergency powers: a. To appoint a temporary board of directors or operate the association without such board. b. To adopt a temporary plan of operation to meet the immediate needs of the association. c. To perform on behalf of the association on a temporary basis all functions necessary for the operation of the association otherwise delegated to the board of directors or the members of the association. d. To charge the association for reasonable expenses incurred on its behalf in the emergency operation of the association pursuant to this section. e. Subject to the same standards applicable for the approval of rates and rating-systems pursuant to P.L.1944, c. 27 (C. 17:29A-1 et seq.), to promulgate rates, rules, policy forms and rating plans for such category or subcategory of insureds for limits up to $3,000,000.00 over primary limits to be used by any company qualifying or designated as a provider for such coverage which does not have rates, rules, policy forms and rating plans in effect for such coverage. These emergency powers shall terminate 60 days after the effective date of this act. L.1975, c. 301, s. 13, eff. Jan. 30, 1976.
N.J. Stat. § 17:30D-14 Severability
If any provisions of this act or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of this act which can be given effect without the invalid provision or application, and for this purpose the provisions of this act are declared to be severable. L.1975, c. 301, s. 14, eff. Jan. 30, 1976.
N.J. Stat. § 17:30D-15 Liberal construction
This act shall be liberally construed to effectuate its purposes, and all laws or parts of laws of this State inconsistent with this act are hereby superseded to the extent of such inconsistency. L.1975, c. 301, s. 15, eff. Jan. 30, 1976.
N.J. Stat. § 17:30D-17 Insurer to notify Medical Practitioner Review Panel of malpractice settlement, judgment, award.
2. a. Any insurer or insurance association authorized to issue medical malpractice liability insurance in the State shall notify the Medical Practitioner Review Panel established pursuant to section 8 of P.L.1989, c.300 (C.45:9-19.8) in writing of any medical malpractice claim settlement, judgment or arbitration award involving any practitioner licensed by the State Board of Medical Examiners and insured by the insurer or insurance association. Any practitioner licensed by the board who is not covered by medical malpractice liability insurance issued in this State, who has coverage through a self-insured health care facility or health maintenance organization, or has medical malpractice liability insurance which has been issued by an insurer or insurance association from outside the State shall notify the review panel in writing of any medical malpractice claim settlement, judgment or arbitration award to which the practitioner is a party. The review panel or board, as the case may be, shall not presume that the judgment or award is conclusive evidence in any disciplinary proceeding and the fact of a settlement is not admissible in any disciplinary proceeding. In any malpractice action against a practitioner, a settlement prohibiting a complaint against the practitioner or the providing of information to the review panel or board concerning the underlying facts or circumstances of the action is void and unenforceable. b. An insurer or insurance association authorized to issue medical malpractice liability insurance in the State shall notify the review panel in writing of any termination or denial of coverage to a practitioner or surcharge assessed on account of the practitioner's practice method or medical malpractice claims history. c. The form of notification shall be prescribed by the Commissioner of Banking and Insurance, shall contain such information as may be required by the board and the review panel and shall be made within seven days of the settlement, judgment or award or the final action for a termination or denial of, or surcharge on, the medical malpractice liability insurance. Upon request of the board, the review panel or the commissioner, an insurer or insurance association shall provide all records regarding the defense of a malpractice claim, the processing of the claim and the legal proceeding; except that nothing in this subsection shall be construed to authorize disclosure of any confidential communication which is otherwise protected by statute, court rule or common law. An insurer or insurance association, or any employee thereof, shall be immune from liability for furnishing information to the review panel and the board in fulfillment of the requirements of this section unless the insurer or insurance association, or any employee thereof, knowingly provided false information. d. An insurer, insurance association or practitioner who fails to notify the review panel as required pursuant to this section shall be subject to such penalties as the Commissioner of Banking and Insurance may determine pursuant to section 12 of P.L.1975, c.301 (C.17:30D-12). In addition to, or in lieu of suspension or revocation, the commissioner may assess a fine which shall not exceed $1,000 for the first offense and $2,000 for the second and each subsequent offense, which may be recovered in a summary proceeding, brought in the name of the State in a court of competent jurisdiction pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). e. A practitioner who fails to notify the review panel as required pursuant to this section shall be subject to disciplinary action and civil penalties pursuant to sections 8, 9 and 12 of P.L.1978, c.73 (C.45:1-21, 45:1-22 and 45:1-25). f. An insurer or insurance association shall make available to the review panel or the board, upon request, any records of termination or denial of coverage to a practitioner or surcharge assessed on account of the practitioner's practice method or medical malpractice claims history, which occurred up to five years prior to the effective date of P.L.1989, c.300 (C.45:9-19.4 et al.). g. For the purposes of this section, "practitioner" means a person licensed to practice: medicine and surgery under chapter 9 of Title 45 of the Revised Statutes or a medical resident or intern; or podiatric medicine under chapter 5 of Title 45 of the Revised Statutes. h. Any insurer or insurance association authorized to issue medical malpractice liability insurance in the State shall notify the Commissioner of Banking and Insurance, in a form and manner specified by the commissioner, of any medical malpractice claim settlement, judgment or arbitration award involving any practitioner licensed by the State Board of Medical Examiners and insured by the insurer or insurance association. The notification shall include the specialty or area of professional practice of the practitioner and the amount of the settlement, judgment or arbitration award, but shall not include the name or other identifying information of the practitioner. L.1983,c.247,s.2; amended 1989, c.300, s.4; 2004, c.17, s.23; 2005, c.259, s.24.
N.J. Stat. § 17:30D-18 Conflicts of interest; violations; penalties.
13. a. On or after the effective date of P.L.2004, c.17 (C.2A:53A-37 et al.) and except as provided in subsection d. of this section, no person who is an officer, director or board member of a professional association for health care providers shall serve concurrently as an officer, director or board member of a State-domiciled medical malpractice liability insurer that is licensed in the State and offering medical malpractice liability insurance policies on that effective date. b. As used in this section, "health care provider" means an individual or entity, which, acting within the scope of its licensure or certification, provides health care services, and includes, but is not limited to, a physician, dentist, nurse or other health care professional whose professional practice is regulated pursuant to Title 45 of the Revised Statutes, and a health care facility licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.). c. A person or professional association who violates the provisions of this section shall be liable for a civil penalty of $10,000 for each violation. The penalty shall be sued for and collected by the Commissioner of Banking and Insurance in a summary proceeding in accordance with the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). d. In the case of an officer, director or board member of a medical malpractice liability insurer who is an officer, director or board member of a professional association for health care providers on the effective date of P.L.2004, c.17 (C.2A:53A-37 et al.), the officer, director or board member shall have 180 days to comply with the requirements of this section. L.2004,c.17,s.13.
N.J. Stat. § 17:30D-19 "Medical Malpractice Liability Insurance Purchasing Alliance;" definitions.
14. Physicians may join together, by means of a joint contract under the procedures established by this section, to form a "Medical Malpractice Liability Insurance Purchasing Alliance" for the purpose of negotiating a reduced premium for its members in the purchase of medical malpractice liability insurance. The joint contract shall be executed by all members of the purchasing alliance. a. As used in this section: "Board" means a medical malpractice liability insurance purchasing alliance board of directors provided for in this section. "Commissioner" means the Commissioner of Banking and Insurance. "Medical Malpractice Liability Insurance Purchasing Alliance," "purchasing alliance" or "alliance" means a purchasing alliance established pursuant to this section. "Member" means a physician who is a member of a medical malpractice liability insurance purchasing alliance as provided for in this section. b. The purchasing alliance, which may be a corporation, shall be governed by a board of directors, elected by the members of the purchasing alliance. No person may serve as an officer or director of an alliance who has a prior record of administrative, civil or criminal violations within the financial services industry. The directors shall serve for terms of three years, and shall serve until their successors are elected and qualified. Each director shall serve without compensation, except for reimbursement for actual expenses incurred by that director. c. The board shall adopt bylaws for the operation of the purchasing alliance, which shall be effective upon ratification by a two-thirds majority of the members. The bylaws shall include, but not be limited to: (1) the establishment of procedures for the organization and administration of the alliance; and (2) procedures for the qualifications and admission of the members of the alliance. The bases for denial of membership shall include, but not be limited to: (a) performance of an act or practice that constitutes fraud or intentional misrepresentation of material fact; (b) previous denial of membership in the alliance; or (c) previous expulsion from the alliance; (3) procedures for the withdrawal of members from the alliance; (4) procedures for the expulsion of members from the alliance. The bases for expulsion shall include, but not be limited to: (a) failure to pay membership or other fees required by the purchasing alliance; (b) failure to pay premiums in accordance with the terms of the medical malpractice liability insurance policy or the terms of the joint contract; or (c) performance of an act or practice that constitutes fraud or intentional misrepresentation of material fact; and (5) procedures for the termination of the alliance. d. In addition to the other powers authorized under this section, a purchasing alliance shall have the authority to: (1) set reasonable fees for membership in the alliance that will finance reasonable and necessary costs incurred in administering the purchasing alliance; (2) negotiate premium rates for medical malpractice liability insurance with insurers on behalf of the members of the alliance, provided that negotiations are conducted by a person other than a member of the alliance or an employee of a member of the alliance; (3) provide premium collection services for insurance purchased through the alliance for members; (4) contract with third parties for any services necessary to carry out the powers and duties authorized or required pursuant to this section; and (5) establish procedures for keeping confidential all communications between the members of the purchasing alliance and for prohibiting the dissemination and discussion of pricing information and other business-related information between and among members of the alliance. e. A purchasing alliance established pursuant to the provisions of this section shall not: (1) assume risk for the cost or provision of medical malpractice liability insurance; (2) exclude a member who agrees to pay fees for membership and the premium for medical malpractice liability insurance coverage and who abides by the bylaws of the alliance; (3) engage in any trade practice or activity prohibited pursuant to P.L.1947, c.379 (C.17:29B-1 et seq.); (4) represent more than 35% of the physicians in a county or other relevant geographic service area; or (5) require a member to purchase medical malpractice liability insurance only through the alliance. f. Within 30 days after its organization, the purchasing alliance board shall file with the commissioner a certificate that shall list: the members of the alliance; the names of the directors, chairman, treasurer and secretary of the alliance; the address at which communications for the alliance are to be received; a copy of the certificate of incorporation of the alliance, if any; and a copy of the joint contract executed by all of the members. Any change in the information required by the provisions of this section shall be filed with the commissioner within 30 days of the change. g. The commissioner, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations necessary to effectuate the provisions of this section. L.2004,c.17,s.14.
N.J. Stat. § 17:30D-20 Provisions concerning settlements of medical malpractice liability insurance policy.
15. a. A medical malpractice liability insurance policy, which is made, issued or delivered pursuant to Subtitle 3 of Title 17 of the Revised Statutes in this State on or after the effective date of P.L.2004, c.17 (C.2A:53A-37 et al.), may contain a provision that provides a person insured under the policy with the exclusive right to require the insurer to obtain the consent of the insured to settle any claim filed against the insured; except that, if the policy contains that provision, the insurer shall offer an endorsement, to be included in the policy at the option of the insured, providing the insurer with the right to settle a claim filed under the policy without first having obtained the insured's consent. The insurer shall establish a premium for the endorsement, which premium shall reflect any savings or reduced costs attributable to the endorsement. b. The Commissioner of Banking and Insurance, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations necessary to effectuate the provisions of this section. L.2004,c.17,s.15.
N.J. Stat. § 17:30D-21 Offering of deductibles in medical malpractice liability insurance policy.
16. a. Every insurer authorized to transact medical malpractice liability insurance in this State shall offer medical malpractice liability insurance policies with a deductible, at the option of the insured, in an amount of at least $5,000 per claim and up to $1,000,000 per claim, and may require the insured to provide collateral for the deductible amount to the insurer. b. Every insurer authorized to transact medical malpractice liability insurance in this State shall provide an appropriate premium reduction for any deductible chosen pursuant to subsection a. of this section. c. In the case of a policy with any deductible, the insurer shall be responsible for payment of the deductible and shall be reimbursed for that amount by the insured. L.2004,c.17,s.16.
N.J. Stat. § 17:30D-22 Increase of premium prohibited, certain circumstances.
17. Notwithstanding any other law or regulation to the contrary, an insurer authorized to transact medical malpractice liability insurance in this State shall not increase the premium of any medical malpractice liability insurance policy based on a claim of medical negligence or malpractice against the insured if the insured is dismissed from an action alleging medical malpractice within 180 days of the filing of the last responsive pleading. L.2004,c.17,s.17.
N.J. Stat. § 17:30D-23 Certification as to adequacy of rates.
18. Each annual statement made after the effective date of P.L.2004, c.17 (C.2A:53A-37 et al.), pursuant to the provisions of section 16 of P.L.1982, c.114 (C.17:29AA-16), by an insurer writing medical malpractice in this State, shall include a certification by the chief executive officer or chief financial officer that the rates for every category, subcategory, or risk classification are adequate to cover expected losses and expenses of the insurer and to ensure the safety and soundness of the insurer. L.2004,c.17,s.18.
N.J. Stat. § 17:30D-24 Mailing of notice of renewal, nonrenewal.
19. Notwithstanding the provisions of section 1 of P.L.1968, c.131 (C.17:29C-1) to the contrary, each notice of renewal or nonrenewal by an insurer authorized to transact medical malpractice liability insurance in this State shall be mailed or delivered by the insurer to the insured not less than 60 days prior to the expiration of the policy and, in the case of a nonrenewal, shall contain the reason for the nonrenewal. L.2004,c.17,s.19.
N.J. Stat. § 17:30D-25 Annual review of capitalization, reserve requirements.
21. Subject to standards adopted by the National Association of Insurance Commissioners, the Commissioner of Banking and Insurance shall, within 180 days after the effective date of P.L.2004, c.17 (C.2A:53A-37 et al.) and annually thereafter, review the current capitalization and reserve requirements applicable to insurers authorized or admitted to transact medical malpractice liability insurance in this State, as those requirements are established by statute or regulation, or both. Based upon the findings of that review, the commissioner shall adopt regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to modify those requirements, as the commissioner determines necessary in order to ensure the solvency of those insurers and the availability and affordability of medical malpractice liability insurance in this State. If the commissioner determines that legislation is necessary to effect any such modification, the commissioner shall notify the Governor and the Legislature within the 180-day period provided in this section. L.2004,c.17,s.21.
N.J. Stat. § 17:30D-26 Option of installments for premium payments.
22. Every insurer authorized to transact medical malpractice liability insurance in this State shall offer its insureds the option to make premium payments in installments, as prescribed by the Commissioner of Banking and Insurance by regulation. L.2004,c.17,s.22.
N.J. Stat. § 17:30D-27 Definitions relative to medical malpractice judgments; payment.
24. a. As used in this section: "Annuity" means an annuity issued by an insurer licensed or authorized to do business in this State which is a qualified assignment under section 130 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.130. "Judgment creditor" means a claimant who is the recipient of an award for economic or noneconomic damages, or both, that is the result of an action filed against a health care provider for medical malpractice, which award is subject to the provisions of subsection b. of this section. "Judgment debtor" means a health care provider who, as a defendant in an action brought for medical malpractice, is required to pay the claimant an award that is subject to the provisions of this section. "Noneconomic damages" means damages for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium, hedonic damages, injury to reputation, and all other nonpecuniary losses of any kind or nature. "Structured payment agreement" means an agreement made to settle a claim or lawsuit or respond to a judgment in an action brought for medical malpractice by an injured person whereby a series of periodic payments, rather than a lump sum payment, is made over time to a claimant, in accordance with the needs of the claimant or the claimant's family, either through the purchase of an annuity or the establishment of a trust fund, or by another means approved by the court. b. (1) Unless otherwise agreed to by the parties, in any judgment resulting from a medical malpractice action brought by a claimant for medical malpractice in which the noneconomic damages are less than or equal to $1,000,000, the court shall enter a judgment ordering that all of the money damages, both economic and noneconomic, be paid immediately. (2) Unless otherwise agreed to by the parties, in any judgment resulting from a medical malpractice action brought by a claimant for medical malpractice in which the noneconomic damages exceed $1,000,000, the court shall enter a judgment ordering that 50% of the noneconomic damages be paid immediately, with the costs and attorney's fees to be paid from that amount. The remaining 50% of the judgment shall be paid over 60 months in the form of a structured payment agreement by any person, organization, group, or insurer that is contractually liable to pay the judgment. c. The structured payment agreement shall specify: the recipient of the payments; the dollar amount of the payments; the interval between payments; the number of payments or the period of time over which payments are to be made; and the persons to whom money damages are owed, if any, in the event of the judgment creditor's death. d. In the event of the judgment creditor's death, any amounts due and owing pursuant to subsection b. of this section shall be paid to the judgment creditor's estate. e. The judgment debtor or the judgment debtor's insurer shall be required to: post a bond or security; or, as otherwise provided by regulation of the Department of Banking and Insurance, assure full payment of the noneconomic damages awarded. A bond shall not be deemed adequate unless it is written by a company authorized to do business in this State and is rated A-, or better, by A.M. Best Company or such other company as is approved by the Department of Banking and Insurance. If the judgment debtor is unable to adequately assure full payment of the judgment, the judgment, reduced to present value, shall be paid to the claimant in a lump sum. No bond may be canceled or be subject to cancellation unless at least 60 days' advance written notice is filed with the court and the claimant. Upon termination of periodic payments, the security, or so much as remains, shall be returned to the judgment debtor. f. Upon the purchase of an annuity, establishment of a trust, or approval of another arrangement for periodic payments by a court, any obligation of the judgment debtor with respect to the judgment shall cease. L.2004,c.17,s.24.
N.J. Stat. § 17:30D-28 Definitions relative to Medical Liability Insurance Premium Assistance Fund.
26. For the purposes of sections 27 and 28 of P.L.2004, c.17 (C.17:30D-29 and 17:30D-30): "Commissioner" means the Commissioner of Banking and Insurance. "Fund" means the Medical Malpractice Liability Insurance Premium Assistance Fund established pursuant to section 27 of P.L.2004, c.17 (C.17:30D-29). "Health care provider" means a physician, podiatrist, dentist and chiropractor licensed pursuant to the provisions of Title 45 of the Revised Statutes, a nurse licensed pursuant to the provisions of Title 45 of the Revised Statutes who is employed by a licensed hospital, long-term care facility or assisted living facility in this State and any person who purchases professional liability insurance on behalf of or for a practitioner, including professional liability insurance protection which is provided for hospital employed physicians through hospital funding supplemented by purchased commercial insurance coverage. "Practitioner" means a physician, podiatrist, dentist and chiropractor and a nurse employed by a licensed hospital, long-term care facility or assisted living facility in this State. L.2004,c.17,s.26.
N.J. Stat. § 17:30D-29 Medical Malpractice Liability Insurance Premium Assistance Fund.
27. a. There is established a Medical Malpractice Liability Insurance Premium Assistance Fund within the Department of the Treasury as a nonlapsing, revolving fund. b. The fund shall be comprised of the following revenue: (1) an annual surcharge of $3 per employee for all employers who are subject to the New Jersey "unemployment compensation law," R.S.43:21-1 et seq., collected by the comptroller for the New Jersey Unemployment Compensation Fund and paid over to the State Treasurer for deposit in the fund annually, as provided by the commissioner, which surcharge may, at the option of the employer, be treated as a payroll deduction to each covered employee; (2) an annual charge of $75 to be imposed by the State Board of Medical Examiners on every physician and podiatrist licensed by the board pursuant to the provisions of R.S.45:9-1 et seq., collected by the board and remitted to the State Treasurer for deposit into the fund; (3) an annual charge of $75 to be imposed by the State Board of Chiropractic Examiners on every chiropractor licensed by the board pursuant to the provisions of P.L.1989, c.153 (C.45:9-41.17 et seq.), collected by the board and remitted to the State Treasurer for deposit into the fund; (4) an annual charge of $75 to be imposed by the New Jersey State Board of Dentistry on every dentist licensed pursuant to the provisions of R.S.45:6-1 et seq., collected by the board and remitted to the State Treasurer for deposit into the fund; (5) an annual charge of $75 to be imposed by the New Jersey State Board of Optometrists on every optometrist licensed by the board pursuant to the provisions of R.S.45:12-1 et seq., collected by the board and remitted to the State Treasurer for deposit into the fund; and (6) an annual fee of $75 to be assessed by the State Treasurer and payable by each person licensed to practice law in this State, for deposit into the fund. The provisions of paragraphs (2) through (5) of this subsection shall not apply to physicians, podiatrists, chiropractors, dentists, or optometrists who: are statutorily or constitutionally barred from the practice of their respective profession; can show that they do not maintain a bona fide office for the practice of their profession in this State; are completely retired from the practice of their profession; are on full-time duty with the armed forces, VISTA, or the Peace Corps and not engaged in practice; or have not practiced their profession for at least one year. The provisions of paragraph (6) of this subsection shall not apply to attorneys who: are constitutionally or statutorily barred from the practice of law; can show that they do not maintain a bona fide office for the practice of law in this State; are completely retired from the practice of law; are on full-time duty with the armed forces, VISTA, or the Peace Corps and not engaged in practice; are ineligible to practice law because they have not made their New Jersey Lawyers' Fund for Client Protection payment; or have not practiced law for at least one year. c. The State Treasurer shall deposit all monies collected pursuant to this section into the fund. Monies credited to the fund may be invested in the same manner as assets of the General Fund and any investment earnings on the fund shall accrue to the fund and shall be available subject to the same terms and conditions as other monies in the fund. d. The fund shall be administered by the Department of Banking and Insurance in accordance with the provisions of P.L.2004, c.17 (C.2A:53A-37 et al.). e. The monies in the fund are specifically dedicated and shall be utilized exclusively for the following purposes: (1) $17 million shall be allocated annually for the purpose of providing relief towards the payment of medical malpractice liability insurance premiums to health care providers in the State who have experienced or are experiencing a liability insurance premium increase in an amount as established by the commissioner by regulation and meet the criteria established pursuant to section 28 of P.L.2004, c.17 (C.17:30D-30); (2) $6.9 million shall be allocated annually to the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58) for the purpose of providing payments to hospitals in accordance with the formula used for the distribution of charity care subsidies that are provided pursuant to P.L.1992, c.160 (C.26:2H-18.51 et al.); (3) $1 million shall be allocated annually for a student loan expense reimbursement program for obstetrician/gynecologists, to be established pursuant to section 29 of P.L.2004, c.17 (C.18A:71C-49); and (4) $1.2 million shall be allocated annually to the Division of Medical Assistance and Health Services in the Department of Human Services for the purposes provided in section 30 of P.L.2004, c.17 (C.30:4J-7). f. The fund and the annual surcharge, charges, and fee provided for in subsection b. of this section shall expire three years after the effective date of P.L.2004, c.17 (C.2A:53A-37 et al.). g. The commissioner, in consultation with the Commissioner of Health, shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to carry out the purposes of sections 26 through 29 of P.L.2004, c.17 (C.17:30D-28 through C.17:30D-30 and C.18A:71C-49); except that, notwithstanding any provision of P.L.1968, c.410 to the contrary, the commissioner may adopt, immediately upon filing with the Office of Administrative Law, such regulations as the commissioner deems necessary to implement the provisions of sections 26 through 29 of P.L.2004, c.17 (C.17:30D-28 through C.17:30D-30 and C.18A:71C-49), which shall be effective for a period not to exceed six months and may thereafter be amended, adopted, or readopted by the commissioner in accordance with the requirements of P.L.1968, c.410. L.2004, c.17, s.27; amended 2012, c.17, s.32.
N.J. Stat. § 17:30D-30 Responsibilities of commissioner.
28. a. In order to carry out the purposes of section 27 of P.L.2004, c.17 (C.17:30D-29), the commissioner shall, at a minimum: (1) establish a program to provide medical malpractice liability insurance premium subsidies to health care providers from monies that are contained in the fund; (2) establish a methodology and procedures for determining eligibility for, and providing subsidies from, the fund; (3) maintain confidential records on each health care provider who receives assistance from the fund; (4) take all necessary action to recover the cost of the subsidy provided to a health care provider that the commissioner determines to have been incorrectly provided; and (5) provide for subsidies to all practitioners who are members of specialties and subspecialties who qualify for relief under subsection b. of this section, including those whose professional liability insurance protection is provided by hospital funding supplemented by purchased commercial insurance coverage. b. The commissioner shall certify classes of practitioners by specialty and subspecialty for each type of practitioner, whose average medical malpractice premium, as a class, on or after December 31, 2002, is in excess of an amount per year as determined by the commissioner by regulation. In certifying classes eligible for the subsidy, the commissioner, in consultation with the Commissioner of Health, may also consider if access to care is threatened by the inability of a significant number of practitioners, as applicable, in a particular specialty or subspecialty, to continue practicing in a geographic area of the State. (1) In order to be eligible for a subsidy from the fund, a practitioner shall have received a medical malpractice liability insurance premium increase in an amount as determined by the commissioner by regulation, for one or more of the following: upon renewal on or after January 1, 2004, from the amount paid by that practitioner in calendar year 2003; upon renewal on or after January 1, 2005, from the amount paid by that practitioner in calendar year 2004; and upon renewal on or after January 1, 2006, from the amount paid by that practitioner in calendar year 2005; or (2) In the case of a health care provider providing professional liability insurance protection through self-insured hospital funding supplemented with purchased commercial insurance coverage, in order to be eligible for a subsidy from the fund, that provider shall have increased its total professional liability funding obligation in an amount as determined by the commissioner by regulation, for one or more of the following: upon renewal on or after January 1, 2004, from the professional liability funding obligation paid by that provider in calendar year 2003; upon renewal on or after January 1, 2005, from the professional liability funding obligation paid by that provider in calendar year 2004; and upon renewal on or after January 1, 2006, from the professional liability funding obligation paid by that provider in calendar year 2005. (3) The amount of the subsidy shall be an amount, as determined by the commissioner by regulation, of the increase from the preceding year's premium or self-insured professional liability funding obligation; except that no health care provider shall receive a subsidy in any year that is greater than an amount as determined by the commissioner by regulation. c. A practitioner who has been subject to a disciplinary action or civil penalty by the practitioner's respective licensing board pursuant to section 8, 9 or 12 of P.L.1978, c.73 (C.45:1-21, 22 or 25), when that action or penalty relates to the practitioner's provision of, or failure to provide, treatment or care to a patient, is not eligible for a subsidy from the fund. d. (1) A practitioner who receives a subsidy from the fund shall be required to practice in that practitioner's specialty or subspecialty in this State for a period of at least two years after receipt of the subsidy. (2) A practitioner who fails to comply with the provisions of paragraph (1) of this subsection shall be required to repay to the commissioner the amount of the subsidy, in whole or in part as determined by the commissioner. e. The commissioner may waive the criteria for eligibility for a subsidy established pursuant to this section, if the commissioner determines that access to care for a particular specialty is threatened because of an inability of a sufficient number of practitioners in that specialty or subspecialty to practice in a geographic area of the State. f. The State Board of Medical Examiners, the State Board of Chiropractic Examiners, the New Jersey State Board of Dentistry, and the New Jersey Board of Nursing shall each provide to the commissioner, on a quarterly basis, the names of the practitioners who have been subject to a disciplinary action or civil penalty by the practitioner's respective licensing board. g. For the purposes of section 29 of P.L.2004, c.17 (C.18A:71C-49), the commissioner, in consultation with the State Board of Medical Examiners, shall provide to the Higher Education Student Assistance Authority the names of obstetrician/gynecologists licensed by the board who may qualify for the student loan reimbursement program established pursuant to P.L.2004, c.17. A physician who has been subject to a disciplinary action or civil penalty by the board, as provided in subsection c. of this section, shall not be eligible for the program. L.2004, c.17, s.28; amended 2012, c.17, s.33.
N.J. Stat. § 17:30D-31 Rules, regulations.
32. The Commissioner of Banking and Insurance shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to carry out the purposes of sections 13, 16 through 19, 21, 22 and 24 of this act. L.2004,c.17,s.32.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026