Conventus - New Jersey Medical Professional Liability Insurance Company Defending Good Medicine Against Medical Malpractice

Conventus Inter-Insurance Exchange Surpasses Membership and Capitalization Goals - With Critical Business Development Goals Met, Company Opens New Offering to Bring Desperately Needed Medical Malpractice Insurance to More New Jersey Physicians
(Woodbridge, NJ) November 25th, 2002 – Conventus Inter-Insurance Exchange, a not-for-profit, physician owned and governed medical malpractice insurance company, today announced that it has met and exceeded its initial membership and capitalization goals. As of November 15th, 2002, the company has raised over $5 million in cash and capital commitments, enabling it to begin underwriting medical malpractice insurance in New Jersey pending final approval by New Jersey state regulators. With its initial development goals met, Conventus has opened a new membership offering. It is accepting new applications from New Jersey physicians now through January 31st, 2003.

“This is an important turning point for physicians and surgeons across New Jersey. With these critical business development goals met, we are now positioned to provide New Jersey doctors with a rational, affordable, and comprehensive alternative in medical malpractice insurance,” said NIP Management Company Chief Executive Officer Richard Augustyn. NIP Management Company, LLC, a subsidiary of National Insurance Programs of Woodbridge, NJ, will administer the Conventus program and oversee the day-to-day operations of the company under the auspices of its physician-comprised Board of Governors.

In a recent nationwide analysis by the American Medical Association, New Jersey was one of twelve states where the cost of securing medical malpractice insurance has been identified as reaching crisis proportions. The analysis estimated that some New Jersey surgeons or obstetricians may pay as much as $200,000 or more for annual professional liability coverage. Exacerbating the situation, the pool of companies that offer medical malpractice insurance in New Jersey has contracted drastically over the past year. As a result of this worsening crisis, 6 out of 10 New Jersey physicians will be forced to find a new medical malpractice insurance company amid a shrinking market and sharp increases in pricing.

Conventus was established in direct response to New Jersey’s worsening medical malpractice insurance crisis. In the months leading up to the founding of Conventus, NIP representatives met with hundreds of physicians, as well as leading medical malpractice insurance brokers, to discuss the current malpractice insurance crisis and to offer the Conventus solution. The statewide response was overwhelmingly positive.
Membership in the Conventus Inter-Insurance Exchange is open to individual primary care physicians and specialists who conduct more than 75 percent of their practice in the State of New Jersey.

Conventus members will comprise a reciprocal insurance exchange, an unincorporated group of individuals who mutually insure one another, and whose chief administrator is an attorney in fact. The attorney in fact of Conventus will be NIP Management Company, LLC.

“Conventus is about more than providing individual health care providers in New Jersey with high quality insurance coverage,” Mr. Augustyn added. “It is about doctors empowering themselves by ensuring their financial stability and peace of mind. It will help them return their focus to giving their patients the best health care that they can provide, free of concern about being able to stay in practice. The mutual-type structure of Conventus makes this an ambitious undertaking, and we applaud the hundreds of pioneering physicians across New Jersey who have joined together to take this important step toward restoring confidence and rationality in New Jersey’s health care market.”

According to Steven Edwards, a founder of the Conventus initiative, Conventus Inter-Insurance Exchange will provide an affordable, yet comprehensive alternative to all other available medical malpractice options in New Jersey.

“My father has been a physician for the past 30 years, and I think I've heard every aching detail about what its been like to practice medicine here in New Jersey. At the core of every story he shared with me, was the loss of autonomy that physicians have been experiencing over just about every aspect of medicine. Conventus is an opportunity for doctors to take back control of one of their largest business expenses.”

“What makes Conventus truly different is that it will not only be owned, but governed by its physician members,” Mr. Edwards continued. “Members will have control over every aspect of the company, and no member will ever be forced to settle a claim without their consent. In addition, members won’t be subject to serving the needs of a stock ownership company, where the premiums charged to physicians include profits for outside shareholders. Instead, Conventus is a non-profit company, whereby the participating physicians will retain the profits for themselves, which in turn, will guarantee the lowest possible premium. Unfortunately for New Jersey physicians, just about every malpractice company in this state is a stock ownership company. Now, doctors will have a choice between two very different models.”

The company also announced it is eliminating a $500 fee it previously charged physicians to apply for membership. “The application fee was necessary in our initial offering because we had to verify an applicant’s true level of interest in a company that might not have formed,” Mr. Augustyn explained. “With our formation goals met, we no longer need that test. We can now make it easier for physicians who need to know their options to obtain a quote from Conventus.”

Conventus will underwrite claims-made medical malpractice insurance policies at cost, with excess profits being returned to policyholders in the form of dividends or distributions. It will offer limits of up to $5 million per occurrence, $7 million aggregate. According to a study by Jury Verdict Research, an independent research company, 28 percent of settlements in recent malpractice suits have exceeded $1 million.

For more information on the current membership offering from Conventus, New Jersey physicians and surgeons may call (800) 446-7647, and ask to speak to a representative about Conventus.

About Conventus Inter-Insurance Exchange
Conventus Inter-Insurance Exchange is a not-for-profit, non-assessable reciprocal insurance exchange providing medical malpractice insurance in New Jersey. Conventus is a mutual-type insurance company, owned and governed by its physician policyholders, and is administered by attorney in fact NIP Management Company, LLC, a subsidiary of National Insurance Programs (NIP). NIP is an Underwriting Manager specializing in proprietary insurance programs for specialized markets. Conventus provides quality medical malpractice insurance coverage that is affordable over the long term to individual physicians and surgeons who conduct more than half of their practice in the state of New Jersey.