FPIC

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About FPIC

FPIC Insurance Group is a medium-sized malpractice insurer founded in 1975 and based in Jacksonville, Florida. The shareholder-owned company is traded on the New York Stock Exchange under the symbol FPIC, and is part of the NASDAQ index. The company writes policies through its four subsidiaries. The largest subsidiary, First Professionals Insurance Company, Inc., is the largest malpractice insurer in Florida. In November of 2009, FPIC purchased Texas-based malpractice insurer Advocate, MD, making FPIC the fourth largest provider of medical malpractice insurance in Texas. The company is also a market leader in Georgia, Arkansas and Missouri. The company currently has policies in effect in 13 states, and is licensed in 32 states. In 2009, FPIC wrote more than $146 million in premiums and retained a surplus of more than $262 million.

FPIC is highly rated by independent rating agencies. A.M. Best rated FPIC “A-” (Excellent) in financial strength, and Fitch Ratings rates the company “A-” (Strong). FPIC’s subsidiaries have similarly high ratings for financial strength. These ratings are based on the company’s solid operating procedures and healthy reserves. Furthermore, FPIC was included in Forbes’ list of the 100 Most Trustworthy Companies in 2010, based on its sound accounting practices and effective management. Many physicians prefer a medical malpractice insurance company that, like FPIC, is highly rated by independent agencies. Going with a lower-—or unrated carrier—can be risky, as these carriers are more likely to experience financial problems and possibly bankruptcy. If a carrier becomes insolvent and unable to continue coverage, a gap in coverage can be created that would make it more difficult to obtain other insurance in the future. FPIC posted strong earnings in the first half of 2010, beating industry expectations; in Q2 of 2010, the company posted a net income of $7.5 million, coming out to $0.76 per share. In the same period, the client retention rate was more than 96 percent. The company credits this strong performance to a general downward trend in the number of claims, as well as successful business developments like selective expansion and the acquisition of Advocate, MD.

First Professionals Insurance Company, Inc., is a major component of FPIC’s business, covering doctors, surgeons, dentists and other healthcare professionals. First Professionals policies are issued on a claims-made basis, meaning that an incident is only covered if the claim is filed while the policy is effective. In practice, this means that a physician with a claims-made policy must maintain continuous coverage, even after he or she retires. The additional coverage that must be maintained after canceling the policy or retiring is called “tail.” First Professionals offers a free tail in the case of death, disability or retirement, provided the policy has been in effect for at least five years. In addition to covering indemnity, the company pays for associated legal defense costs in covered claims and covers defense costs for regulatory audits, such as those sometimes performed by Medicare, though a deductible and separate limits apply in the regulatory case. These policies also provide free coverage for certain employees.

First Professionals offers a variety of premium discounts to its clients. These include a discount for new physicians up to 65 percent, a part-time discount up to 50 percent and loss-free discounts of up to 25 percent. Typically, these discounts do not “stack,” and the discount which would yield the lowest premium is applied. The company also offers extensive risk management services to clients, many at no additional cost. These services aim to reduce the risk of claims and to teach clients how to respond when claims do occur.

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This write-up for FPIC was put together by Michael Matray, the Editor of the Medical Liability Monitor