The results of the first quarter financial statement for New York’s Physician Reciprocal Insurance totaled up a $43 million “negative surplus” for the state’s second largest malpractice insurer. Of the two main malpractice insurers, Medical Liability Mutual Insurance Co. (MLMI), the larger of the two has a $287 million positive surplus.
To the uninitiated, this suggests that the insurer will be incapable of meeting its financial responsibilities and therefore should be liquidated or otherwise forbidden from underwriting any more policies. Liquidation under these circumstances is forbidden by law. The fact that PRI is an admitted carrier in New York means that the state’s warranty fund will be available to cover some of the claims which PRI is unable to shoulder.
To the contrary claims PRI’s CEO, Anthony Bonomo, who stated that the figures for the first quarter do not take into account cash flow and claims reserve analyses. He added that PRI was in excellent condition to all of its policyholder’s on the basis of its cash flow.