MLMIC Revenue and Competitors

Medical Liability Mutual Insurance Company (MLMIC) was formed under the auspices of the Medical Society of the State of New York (MSSNY) in 1975, when the state's medical community faced a professional liability insurance crisis of availability. For many years, the New York medical malpractice insurance market had been primarily served by Employers Insurance of Wausau, the carrier endorsed by MSSNY. In late 1973, Employers announced that, because of heavy loss experience, it planned to withdraw from the medical mapractice market, effective June 30, 1974. Although Argonaut Insurance Company assumed the risk, thereby averting an even more catastrophic situation, Argonaut requested and received a 93.5% rate increase effective July 1974. Clearly, this once relatively stable area of risk was becoming less profitable and, therefore, less and less attractive to commercial carriers. When, in October 1974, Argonaut again applied for an immediate rate increase of 197%, State Medical Society officials knew that something had to be done, and swiftly. Premium rate hikes of that magnitude signaled only one thing--that profitablity was questionable once again, and a withdrawal of all commercial insurers from the market seemed imminent. The financial security of approximately 20,000 physicians was at stake. Responding to the needs of its membership and the severity of the professional liability situation, MSSNY sponsored the formation of Medical Liability Mutual Insurance Company, a physician-owned mutual insurance company, which began operation on July 1, 1975, the day Argonaut withdrew from the New York liability insurance market. Since that time, MLMIC has expanded its policyholder services and coverage options while continuing its cooperative ties to MSSNY. Currently MLMIC is not only the largest writer of medical professional liability insurance in the state of New York, but also the largest company of its kind in the nation. As a mutual insurer established under, and subject to, the insurance laws of the State of New York, MLMIC is (a) organized to provide the highest quality medical insurance for its insureds at competitive rates, and (b) owned by its policyholders and structured for their benefit. That means that each of our policyholders--be they physicians/surgeons, dentists, hospitals, managed care organizations, or licensed Article 28 health care facilities--is able to participate in the operations of the Company by electing its Board of Directors. And, Board members have the greatest incentive to keep rates down--most of them are practicing physicians and dentists who have to pay the premiums themselves. To keep costs down and quality up, MLMIC retains the services of Donald J. Fager & Associates, Inc., to handle the company's daily business. Unlike commercial insurers, MLMIC is not in business to generate a profit; in fact, it uses every penny of investment income to reduce premiums. Because there are no brokerage or agency fees to pay, MLMIC is able to maintain administrative expense ratios that are well below industry levels, and it can provide coverage at the lowest possible cost consistent with company solvency and fiscal responsibility. MLMIC's investments have always been prudent and conservative, earning income which has been cited for its consistently high rate of return. This stable investment revenue is factored into MLMIC's premium calculations. By discounting premiums, based on anticipated investment income, MLMIC is able to achieve lower rates than would otherwise be possible.