Malpractice insurance's prescription for trouble

Here's some free advice for doctors who are desperate to find affordable malpractice insurance.

If the agent tells you to mail the premium to Belgrade, save the stamp and just flush the money down the toilet.

The Florida Department of Insurance this summer warned doctors that phony malpractice insurance companies were making sales calls in the state.

The questionable outfits operated under several names -- Physicians Exchange Association Inc., Physicians Exchange Risk Retention Group and Doctors Liability Exchange. They all claimed to have a connection with Reliance General Insurance Co., which the state said appears to be headquartered in Yugoslavia. None of the companies is licensed in Florida.

The DOI was tipped off by a doctor in Central Florida, who got the pitch for these low-cost insurers through an agent. The agent assured the physician the companies were exempt from state regulation because they were covered under a federal plan. Though there are legitimate exemptions, the insurance department said these companies had not complied with legal requirements to meet the exemptions and were operating illegally.

The state said it did not know how many doctors had purchased coverage through the unlicensed companies. It's no surprise doctors are desperate for low-price malpractice insurance. The number of legitimate carriers in the state has dropped to a handful. And malpractice rates have skyrocketed as much as 200 percent for some high-risk specialties.

But DOI spokeswoman Tami Torres warns that doctors are likely to end up with unpaid claims if they sign on with unregulated insurers.

"Doctors should ask the agent for the name of the insurer carrying the risk and go a step further and call us to see if that insurer is licensed," said Torres, who added that the department has gotten questions about Reliance from as far away as New Zealand. "It's not enough that the agent offering the insurance is licensed."

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