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words in boldface type and underscored are additions.
Regular Session, 2010 ENROLLED
SENATE BILL NO. 514
BY SENATOR MURRAY
AN ACT1
To amend and reenact R.S. 40:1299.44(A)(2), (5), and (6) and (D)(1)(c) and (2)(b)(iii),2
relative to the Patient's Compensation Fund and the Patient's Compensation Fund3
Oversight Board; to provide with respect to exemption of the board and fund from4
rate regulation by the commissioner of insurance; to provide relative to the annual5
surcharge, including the manner of its determination; to provide relative to retention6
of monies in the fund; to provide with respect to composition of the board and to7
otherwise provide with respect to its authority; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 40:1299.44(A)(2), (5), and (6) and (D)(1)(c) and (2)(b)(iii) are10
hereby amended and reenacted to read as follows:11
ยง1299.44. Patient's Compensation Fund12
A.13
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(2)(a) In order to To provide monies for the fund, an annual surcharge shall15
be levied on all health care providers in Louisiana qualified under the provisions of16
this Part.17
(b) The board shall cause to be prepared an annual actuarial study of18
the fund by a qualified competent actuary.19
(b) (c) The board and the fund shall be exempt from rate regulation by20
the commissioner of insurance. The surcharge rates shall be determined by the21
commissioner of insurance board in a public meeting held pursuant to the22
provisions of R.S. 42:4.1 through 12 based upon actuarial principles and in23
accordance with an application for rates or rate changes, or both, filed by the24
Patient's Compensation Fund Oversight Board, established and authorized pursuant25
ACT No. 78 SB NO. 514 ENROLLED
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to Subsection D of this Section. reports, experience, and prudent judgment of the1
board. The board shall give written or electronic notice of the meeting at least2
fifteen days in advance and provide an opportunity for public comment at the3
meeting before determining rates.4
(c) (d) The application for rate changes filed by the board shall be submitted5
to the commissioner of insurance at least annually on the basis of an annual actuarial6
study of the patient's compensation fund. surcharge rates shall not be excessive,7
inadequate, or unfairly discriminatory. In determining whether surcharge rates8
are excessive, inadequate, or unfairly discriminatory, consideration may be9
given to the following items:10
(i) Basic rate factors. Due consideration shall be given to past and11
prospective loss and expense experience, catastrophe hazards and contingencies,12
events, or trends. Fines and penalties against a health care provider, whether13
levied by a court or regulatory body, shall not be used by the board or14
considered in any manner in the loss or expense experience.15
(ii) Classification. Risks may be grouped by classification for the16
establishment of rates. Classification rates may be modified for individual risks17
in accordance with an experience-rating plan or schedule which apportions a18
greater percentage of required surcharge increases to those health care19
providers who generate greater than expected losses.20
(iii) Expenses. The expense provisions shall reflect the operating21
methods of the board and the fund, the past expense experience, and anticipated22
future expenses.23
(iv) Contingencies. The rates may contain a provision for contingencies.24
(v) Other relevant factors. Any other factors available at the time of25
determining the rates.26
(d) (e) The surcharge shall be collected on the same basis as premiums by27
each insurer, the risk manager, and surplus line agent.28
(e) (f) The board shall collect the surcharge from health care providers29
qualified as self-insureds.30 SB NO. 514 ENROLLED
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(f) (g) The surcharge for self-insureds shall be the same amount determined1
by the board in accordance with regulations promulgated under the Administrative2
Procedure Act and in accordance with the rate set by the commissioner of insurance3
to be the amount of surcharge which the health care provider would reasonably be4
required to pay were his qualification based upon filing a policy of malpractice5
liability insurance.6
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(5)(a) All expenses of collecting, protecting, and administering the fund shall8
be paid from the fund.9
(b) The functions of collecting, administering, and protecting the fund,10
including all matters relating to determining surcharge rates, establishing reserves,11
the evaluating and settlement of claims, and relating to the defense of the fund, shall12
be carried out by the board.13
(c) The board shall prepare quarterly statements of the financial14
condition of the fund and publish the statements on the website of the board.15
(c) (d) The function of selecting the list of attorney names from which the16
selection of the attorney chairman of the medical review panels is to be made shall17
be the responsibility of the office of the clerk of the Louisiana Supreme Court.18
(d) (e) These expenses of the board and office of the clerk of the Louisiana19
Supreme Court shall be paid from the fund by the state treasurer in accordance with20
the law.21
(e) The fund shall be a budget unit of this state.22
(f) The legislature shall appropriate from the fund sufficient monies for the23
carrying out by the board and office of the clerk of the Louisiana Supreme Court of24
the duties, functions, and responsibilities imposed upon them in this Section and25
shall also appropriate all remaining monies in the fund for use by the board to pay26
approved claims based upon final judgments, court-approved settlements, final27
arbitration awards, and judgments awarding medical care and related benefits28
rendered pursuant to R.S. 40:1299.43 and vouchers drawn by the board pursuant to29
a judgment reciting that a patient is in need of future medical and related benefits30 SB NO. 514 ENROLLED
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words in boldface type and underscored are additions.
under the provisions of R.S. 40:1299.43 in accordance with Paragraph (7) of this1
Subsection and in accordance with Subsection B of this Section.2
(g) (f) Any purchases from the fund of furniture, fixtures, equipment, or3
other property shall be specifically designated, by such the method of identification4
as is reasonable and practical for each item, as the property of the fund.5
(6)(a) At all times the fund shall be maintained so as to provide a surplus6
assets of at least thirty percent of the annual surcharge premiums, reserves7
established for individual claims, reserves established for incurred but not reported8
claims, and expenses. fund's outstanding liabilities, calculated using the most9
recent actuarial study and report for the fund.10
(b) No reduction in the surcharge shall be made unless such surplus assets11
are is available in the fund.12
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D.(1)14
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(c) The ninth member of the board shall be appointed from nominees16
provided by the principal professional organization of insurance executives,17
insurance agents organizations and this member must shall be an executive of a18
familiar with property and casualty insurance company that is and licensed in this19
state which does not sell medical professional liability insurance. as a producer.20
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(2)22
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(b) In addition to such other powers and authority elsewhere expressly or24
impliedly conferred on the board by this Part, the board shall have the authority, to25
the extent not inconsistent with the provisions of this Part, to:26
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(iii) Collect, accumulate, and maintain claims experience data from enrolled28
health care providers and insurance companies providing professional liability29
insurance coverage to health care providers in this state, in such form as may be the30 SB NO. 514 ENROLLED
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form necessary or appropriate to permit the fund board to develop determine1
appropriate surcharge rates for the fund.2
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PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: