State warns doctors about company selling bogus malpractice insurance

Friday, March 28, 2003
By PHIL BORCHMANN, pgborchmann@naplesnews.com

Area doctors are being warned that an unlicensed company has been dealing bogus medical malpractice insurance.

Florida's Insurance Regulation Office has ordered Bermuda-based Professional Liability Insurance Co., or PLIC, to stop doing business in the state because it is not licensed to do so.

The agency presumes the policies are suspect because medical malpractice premiums have skyrocketed in Florida, driving many in surers out of the state, said spokesman Bob Lotane. Meanwhile, PLIC has low rates.

"When somebody comes in the back door without a license, they're probably dealing worthless insurance," Lotane said. State officials acted on several tips about the company from suspicious physicians and insurance agents. It's not clear whether anyone bought the coverage, Lotane said.

"Some doctors are so strapped and busy that when someone comes in with low rates, you could see somebody falling for it," he said.

Fraudulent insurance might result in unpaid claims, and those who have purchased unli censed health plans may find difficulty securing new coverage because of pre-existing conditions and the subsequent lapse in continuous coverage.

The state issued orders to cease business against PLIC, PLIC Claims Management Inc., Medical Risks Associates, UNIMED, RPG and Physicians Malpractice Analyst Inc., which were suspected of selling the coverage.

"The Office of Insurance Regulation has zero tolerance for unlicensed insurance activity in Florida," Kevin McCarty, the agency's director, said in a statement. Selling insurance or acting as an insurer without a licenses is a third-degree felony.

Because PLIC is an offshore company, there's little legal recourse, however, Lotane said.

PLIC officials couldn't be reached for comment.

UNIMED, an Atlanta-based risk management group, reportedly promoted PLIC's policies, Lotane said.

When contacted and asked about the state's order, UNIMED risk manager Matt Reed said: "I have not heard of that notice."

Medical providers shopping for coverage can check with the department to verify whether an insurance company is licensed to do business in Florida. Call 1-800-342-2762.