Frequently Asked Questions

Got questions about MICA's modified claims-made insurance coverage and attributes of MICA's policy, including tail and nose coverages? We have answers.

What is a "reporting" form of a claims-made policy?
A reporting form of a claims-made policy covers only those occurrences which are reported to the company during the active policy period that arise from incidents which occurred after the policy retroactive date. Today, most medical professional liability insurance is issued on a claims-made basis.
How does this differ from occurrence coverage?
Occurrence policies, such as automobile and comprehensive personal liability policies, cover all claims resulting from incidents occurring during a given policy period regardless of when they are reported to the insurance company.
How are reporting form claims-made policies priced?
In the first claims-made policy year, coverage is provided only for claims reported to the company in that year which arose from incidents involving treatment rendered in that year. Thus, the reporting form claims-made premium for the first year is significantly less than the premium for most occurrence policies.

In the second year of reporting form claims-made coverage, the policy covers claims reported to the company during that year arising from incidents involving treatment rendered during the first and/or second policy years. The second year's reporting form claims-made premium is, therefore, higher than the premium for the first year of coverage. It represents approximately 60% of the cost of a second year occurrence policy.

The third year's claims-made premium will be made up of three components, recognizing three years of risk; the fourth will have four components, and so on. Under a reporting form claims-made policy, as coverage expands each year to cover the risk of an increasing number of reported claims, the premium will also increase. This continues until a "mature" claims-made rate is reached, reflecting a leveling off in the cost of and number of claims reported.
Does that mean that a physician joining MICA in the current year as a new member will pay less than a physician in a similar medical specialty who joined in the prior year and is therefore in his or her second claims-made policy year?
Yes. The policy premium is substantially less in the first policy year because only those incidents that both occur and are reported to the company during the year are covered. This is reflected in the premium charged. The premium increases when the physician enters the second claims-made year to meet the additional risk of claims to be reported.
If I want to leave another claims-made program to join MICA, how can I obtain coverage for claims that may be reported after I join, but which result from treatment rendered while I was insured with the other company?
When canceling another claims-made policy, the insurance company will offer you an extended reporting endorsement (tail coverage) for an additional premium charge. However, a physician also has the option of applying to MICA for prior acts (nose) coverage. If the request is approved, the additional premium for the prior acts coverage is rated and collected along with the insured's regular reporting form claims-made premium. Requests for prior acts coverage require completion of a prior acts application and are subject to underwriting review.
What is the difference between tail coverage and prior acts coverage?
Tail coverage, which is purchased from the expiring carrier at the time a claims-made policy is canceled, offers coverage for incidents that occurred while the policy was still active, but which were not actually reported to the company until after the policy was canceled.

Prior Acts coverage - also known as nose coverage - is purchased from the new carrier. It covers physicians for occurrences that took place after the retroactive date on the new policy and for which no claim or report of potential claim has yet been made.
When must a claim be "made" if it is to be covered under a reporting form of a claims-made policy?
Under the MICA policy, a claim is a demand received by an insured for damages or a complaint, lawsuit, demand for arbitration or other legal process served on an insured. Coverage for such a claim will be provided if it is not otherwise excluded and the claim is reported to the company by the insured during the policy period. The physician does not, however, have to wait for a claim to actually be made. The physician may report an unusual occurrence that he or she believes may later give rise to a claim even though the patient has not yet asserted any claim. By doing so, if a claim is later made against the physician, it will be considered to have been made during the policy period in which the occurrence was reported. The incident giving rise to the claim must have occurred while the policy was in force.
How much does the extended reporting endorsement (tail coverage) cost?
The premium for the extended reporting endorsement is intended to cover claims reported to the company during the extended reporting endorsement period for occurrences that took place prior to the end of the policy period. The amount of the extended reporting endorsement premium will vary depending on the time the policy was in force prior to cancellation.
If I cancel my policy, will I be required to purchase reporting endorsement coverage?
No. There is no contractual obligation of the insured physician to purchase reporting endorsement coverage. An insured does, however, have the contractual right to buy the reporting endorsement, provided the insured complies with the requirements to obtain the coverage.
Must I pay the entire reporting endorsement premium upon policy cancellation?
No. Insureds may do so and they also have the option of making the premium payments in four quarterly installments.
Are allowances made if, due to an insured's death or disability, the estate or physician has difficulty obtaining the premium for the reporting endorsement?
Yes. Reporting endorsement coverage is provided automatically at no cost in the event of the death of an insured, or if the total and permanent disability of an insured would prevent him or her from practicing medicine.
How are rates determined?
Rates are based on the territory, the medical specialty of the physician or physicians within a group, the physician's claim history, the limits of liability the insured has selected and the rate indications developed annually by MICA actuaries. Each year, MICA actuaries perform an analysis of loss, expense and exposure data and then develop rate indications based upon these findings. The actuaries present their recommendations to MICA and the company then determines whether it is necessary to make an adjustment to base rates and, if an adjustment is indicated, the extent to which base rates are adjusted.
Does MICA have a consent clause?
Yes. Except in very limited circumstances, MICA will not settle a medical professional liability claim without the insured's written consent.
What types of services does MICA offer its policyholders?
MICA offers a wide range of risk management services, expert claims handling, a direct line to Customer Service representatives, and assigned account teams. For more information, call Marketing and Corporate Communications at 602.956.5276 or 1.800.352.0402.