(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.
