FAQ for NY Nurse Practitioners

Allied Healthcare
New York Nurse Practitioners

Frequently Asked Questions (FAQs):

Rate

1. Why is my premium increasing so dramatically with this year’s renewal? Why is my premium going up so much?

Answer: The situation for New York Nurse Practitioners is unique. In the past, CNA and NSO have filed rate increases for New York Nurse Practitioners. But these increases have not been enough to adequately cover the losses in New York. To address this issue in New York, NSO and CNA have agreed to place your coverage through Columbia Casualty Company, a CNA affiliated surplus lines carrier.

2. What is the adverse loss experience in the State of New York? Please explain and give examples.

Answer: CNA, like other insurance companies, tracks “loss ratios” countrywide. The loss ratio is a percentage of expenses and premium. Anything above 100% means outgoing expenses are greater than incoming premium (adverse loss experience). NPs in New York continue to be above 100% (unprofitable). In the state of New York the Nurse Practitioner loss experience has been as high as 400%. Currently, for every premium $1.00 collected we are experiencing costs of $1.40. This loss experience without sufficient rate being collected can not continue, so NSO and CNA needed to seek another solution.

3. Are other states subject to the rate increase?

Answer: We have been taking rate action in other states for the past several years. This is the only rate increase we have taken for New York Nurse Practitioners in the past six years. Even with the current rate increase, New York rates remain significantly lower than the countrywide rates. However, other states are not moving to a surplus lines carrier because the rate action that we have been taking through the years has been effective enough to address the losses that we have been experiencing.

4. How do my rates compare to Nurse Practitioners in other states?

5. Why are additional taxes/fees applicable?
What are a “Surplus Lines Tax” and “Surplus Lines Fee”?
On the Notice of Excess Line Placement--What are the taxes/fees?

Answer: Every policy, both admitted and non-admitted, has taxes and fees (homeowners, auto, etc), but in surplus lines, these taxes and fees must be broken out and filed separately. These taxes and fees are remitted to the state. These fees have always been part of your premium, but they have not been broken down into detail the way you see them now.

6. Are all of these fees going to the Insurance Company to make up for the rates?

Answer: No. To be clear, no fees are kept by the Insurance Company (CCC) or the administrator (NSO). They are remitted to the state.

7. Should I expect another rate increase at my next renewal and each year until the rate is up to the country-wide rate?

Answer: This is our first step to get the rates in NY to be commensurate with the rest of the country. We don’t know when additional rate action will be taken. We will see how this rate action impacts the loss ratio and address it with CNA to see if additional rate action is necessary.

8. If I activate coverage, what occurs at my next renewal?
Will my rate remain the same?
Will I be renewed in Surplus Lines?

Answer: At your next renewal, your surplus lines policy will renew following similar processing procedures as you experienced this year. If experience necessitates an additional rate increase, you will be notified via a renewal notice in compliance with statutory requirements.

9. Are there any discounts that I can apply for in order to reduce my increased rates?

Answer: We acknowledge that higher premiums are difficult to manage especially in today’s economy but there are ways you can pay less. Consider the following discounts to save you money on your premium.

• CE Discount: A nursing professional who attends an eligible risk management course or who completes NSO’s online CEs can receive a 10% non-cumulative premium credit for up to three years.
• Part-Time Discount: Nurse Practitioners in New York who practice 24 or fewer hours per week are eligible for a 25% discount in premium from the full time rate. Part time rates are not offered on a national basis.

Coverage

10. Why am I being moved to surplus lines?
Why am I being moved to a non-admitted market?
Why am I being moved to Columbia Casualty Company?
Why is my policy no longer being offered through American Casualty Company?

Answer: Excessive loss experience in the Nurse Practitioner insurance program necessitates the need to find an alternative solution to offer professional liability insurance to New York Nurse Practitioners.

From a loss exposure perspective, New York Nurse Practitioners have not been performing well since inception and NSO and CNA have not been able to get the rate in New York for nurse practitioners to offset the rate exposure. The balance of the country has been bearing rate effect and there is a disparity between New York rates for nurse practitioners and the rest of the country. To correct this, NSO is moving to the surplus lines, non-admitted market so NSO and CNA can have flexibility to move rate and get correct rate for risk exposure.

11. Who is the new carrier of my policy?
What is the name of the insurance company who will write my policy?
What’s the name of the new insurance company who will write my policy?

Answer: Columbia Casualty Company (CCC), an affiliate of CNA.

12. What is the financial strength of Columbia Casualty Company (CCC)?

Answer: Columbia Casualty Company (CCC) has an A. M. Best rating of “A” (Excellent).

13. Do I still have occurrence coverage?

Answer: Yes.
By placing your coverage with CCC, NSO has the ability to continue to provide New York Nurse Practitioners with occurrence-based professional liability insurance coverage. It additionally provides NSO with the ability to take corrective steps with regard to product and pricing as needed.

14. What is the difference between the American Casualty Company (ACC) and Columbia Casualty Company (CCC)?

Answer: The only difference between the companies is that ACC is admitted and CCC is non-admitted

15. What is the difference between this coverage and my current coverage?

Answer: There is no difference in the coverage. The only difference is that your new policy is through a different carrier in the surplus lines market.

16. What is a Surplus Lines Insurance Company?
What is a non-admitted company?

Answer: A Surplus Lines Insurance Company is an insurance company that provides coverage that may otherwise be unavailable from an admitted company. Examples include risks of an unusual nature that require greater flexibility in policy terms and conditions than exist in standard forms or where the highest rates allowed by state regulators are considered inadequate by admitted companies. Surplus lines companies are typically not part of the guaranty fund.

17. What does “Surplus Lines” carrier mean?

Answer: “Surplus lines” refers to insurance coverage that does not need to be filed with state insurance departments as a condition to be able to offer coverage. It is considered a non-admitted product since the rates are not filed and approved by the state insurance department and therefore not regulated by a third party entity. It also means that if the underwriting company were to have financial difficulty, the individuals insured on this policy would not have the protection or financial backing of the state Guaranty Fund.

18. What is an Admitted Company?

Answer: An Admitted company is an insurance company licensed and authorized to do business in a particular state. Rates for admitted companies are usually filed and approved with the state insurance department. Admitted companies are part of the state guaranty fund.

19. What is a Guaranty Fund?

Answer: A guaranty fund is the mechanism by which some of the claims against insolvent insurance companies are paid. Such funds are required in all 50 states, but the type and amount of claim covered by the fund varies from state to state.

20. Have other states moved to a “surplus lines” insurance product?

Answer: No, because the rate action that we’ve taken in other states has been effective enough to address the losses that we have been experiencing.

Process

21. Why does the renewal process this year require many more steps than my prior renewals? Why do I have to go through all of these new processes?

Answer: These rules are dictated to us by surplus lines regulations and the state of New York. In addition to the forms you would receive each year at renewal, like your billing coupon, renewal letter and premium remittance envelope, this year you will see that there are a few other forms that require your immediate attention.

• One of these forms is required by the Excess Lines Association of New York (ELANY). That is the Notice of Excess Lines Placement Form.
• Another enclosure is the Notice of Conditional Renewal Letter. CNA is required by state regulations to provide to you the Notice of Conditional Renewal Letter.
• Other forms, such as the Conditional Renewal Checklist, the Customer Status Verification/Change Form, and the New York Nurse Practitioner Rate Chart are forms NSO designed to help you with this new renewal process, to confirm what coverage you have in place, and to identify any coverage changes you would like to see under this new surplus lines policy form.
• The pink envelope is to provide you with a convenient way to return the critical documents and your payment to us. It is also to help us quickly identify your returned documents so we can process them on a priority basis and therefore work with you to meet the strict time requirements.

22. Why a 30 day deadline?

Answer: The processing of your renewal is extremely time sensitive this year. The 30 day deadline is to make certain we have all your completed forms and premium remittance returned in time for us to process your renewal through ELANY within the time requirements. The state of NY has a timeframe in which we have to file your renewal. The 30 day deadline helps us to facilitate your renewal and meet the state-imposed deadline.

23. I need proof of coverage now, for employment purposes. Please send me a Certificate of Insurance as you typically have done in the past.

Answer: Your current certificate of insurance is valid until your expiration date. We encourage you to submit your renewal forms 30 days prior to your expiration date so that we have adequate time to process your renewal and provide you with a certificate of insurance for your next year’s policy period.

24. Will a claim be handled differently for surplus lines incidents than under the old situation?

Answer: No, claims will be handled exactly the same way as they have been handled in the past.

25. Will I be cancelled (non-renewed) more quickly under surplus lines should I have a claim?

Answer: No, the same underwriting criteria and claims processing apply regardless of your insurance policy being with an admitted or non-admitted carrier.