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CMIC Risk Retention Group Outlook Revised

Medical Professional-SF
March 16, 2017

The Connecticut Medical Insurance Group is comprised of the Connecticut Medical Insurance Company (CMIC) and the CMIC Risk Retention Group. According to a press release, A.M. Best has revised the outlooks to stable from positive and affirmed the Financial Strength Ratings of A– (Excellent) for CMIC and CMIC Risk Retention Group.

A.M. Best's "… revised outlooks reflect the group's sub-par results reported over the past several years, which were well outside of A.M. Best's expectations when the positive rating outlooks were initially assigned. The strain on underwriting results in recent years stem[s] from the impact of prolonged soft market conditions in the medical professional liability (MPL) sector, weaker than expected results in Massachusetts and the emergence of unfavorable loss reserve development," the press release explains.

According to the District of Columbia Department of Insurance, Securities and Banking 2014 Financial Condition Examination Report, CMIC Risk Retention Group is an association captive insurance company that started in 2010 and is domiciled in the District of Columbia. It is owned by its members and is not part of a holding company group, the report states. It was capitalized with a surplus note of $3.25 million issued to CMIC, according to the report, and the risk retention group provides medical professional liability insurance to individual practitioners, practice groups, hospitals, or other healthcare facilities.

The CMIC website reports that CMIC Risk Retention Group has a quota-share reinsurance agreement with CMIC based on a 95 percent/5 percent quota-share basis with the risk retention group retaining 5 percent. After commissions, it cedes approximately 70 percent of its professional liability premium to CMIC, according to the website. The risk retention group also provides medical cyber-liability coverage for its insureds and its sponsor's insureds, the website states, and the risk retention group "cedes 100 percent of this premium to several Lloyd's syndicates while retaining a ceding commission of 15 percent."

Results reported in the Demotech, Inc., Analysis of Risk Retention Groups Year-End 2015 included the following.

  • Policyholders' surplus: $2,642,255
  • Direct written premium: $2,304,350
  • Net written premium: $96,949
  • Net income/(Loss): ($100,173)
  • Loss and loss adjustment expense ratio: (209.42)
  • Expense ratio: (172.72)
  • Combined ratio: (382.13)
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