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Chief Administrative Office, Risk Management Division, recommending the Board review and approve the California State Association of Counties Excess Insurance Authority (EIA) proposed amendments to the Medical Malpractice Program Memorandum of Understanding.
FUNDING: There is no change to Net County cost.
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BUDGET SUMMARY:
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There is no change to Net County cost.
Background
El Dorado County has participated in the Medical Malpractice Program through EIA since 1993. This program provides coverage for alleged negligence arising from health care operations including clinics, hospitals, mental health, public health, jail clinics and coroner operations.
The EIA Medical Malpractice Committee will be considering approving amendments to the Program Memorandum of Understanding (MOU) at their September meeting. EIA requests that each entity that participates in the program review the proposed amendments and provide comments or concerns to EIA no later than August 30, 2013.
The first of the proposed amendments would eliminate the provision for automatic dividends to be declared on amounts over the 90% confidence level upon closure of a policy period. When the program was established, it was structured so that the Program would be evaluated on a bottom-line basis and policy periods would be combined. The bottom-line/10-year mechanism was developed to maximize the value of the funding mechanism by leveraging the size of the pool. The net of “good” and “bad” years minimizes the chance of an assessment to be levied and allows the actuarial confidence levels to be “thinner” on a prospective basis. This allows the members to save real money up front. This also gives the Committee maximum flexibility in setting rates and declaring...
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