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N.J. Department of Banking and Insurance Approves National Insurance Programs' Plan to Form a New Medical Professional Liability Insurance Exchange

Business Wire, Sept 12, 2002

Business Editors & Health/Medical Writers

WOODBRIDGE, N.J.--(BUSINESS WIRE)--Sept. 12, 2002

The New Jersey Department of Banking and Insurance has approved National Insurance Programs' (NIP) plan to form the Conventus Inter-Insurance Exchange, a physician owned and governed medical professional liability insurance company, and granted permission for Conventus to solicit applications and capital for its formation.

"With the approval of Conventus' business plan, New Jersey physicians and surgeons are now one step away from having their own company to provide quality and affordable coverage, and to regaining control over their escalating medical professional liability insurance costs," said Conventus founding member Steven P. Shikiar, MD, FACS.

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"Most commercial insurance companies have responded to the `New Jersey malpractice insurance crisis' by either pulling out of the state or seeking large rate increases. I am seeing too many colleagues, all excellent physicians, being declined for coverage or watching their premiums increase by 50 percent or more," Dr. Shikiar continued. "Unlike a stockholder-owned company, Conventus will be a non-profit venture, enabling it to keep rates below those now commonplace in the commercial market."

An initial membership offering commences immediately and closes on November 15th. Physicians and surgeons who join during this period will be offered two-year policies, guaranteeing coverage and locking in capital contribution amounts. Premium rates and capital contribution requirements may be higher in subsequent offerings. Commitments to join must be received by November 15th to qualify for the initial offering rates.

"The plan is to raise sufficient funds to finance operations and begin to issue policies no later than January 1, 2003," said Richard Augustyn, CEO, NIP. "We plan to offer membership to all primary care physicians and specialists. We are committed to disciplined underwriting while offering membership to physicians and surgeons who have experienced claims while providing quality care."

"New Jersey's physicians know there's a crisis and have been asking for a solution," said Albert A. Talone, D.O., President of the New Jersey Association of Osteopathic Physicians and Surgeons. "This is it. It's time to unite and take concrete action. In order to commence operations, we must have at least 200 membership commitments by November 15th. If we don't, New Jersey physicians will lose this opportunity to take back control of their medical professional liability insurance destiny, and be left at the mercy of the commercial insurance market."

To obtain applications and details on how their clients can apply for membership, brokers should contact John Wehner, COO, NIP at (800) 446-7647, Extension 241.

NIP is a premier administrator of highly specialized business insurance programs. Formed in 1990, NIP provides a full range of integrated insurance services including underwriting, rate making, policy issuance, endorsements, claims handling, loss control, risk analysis, marketing and distribution.

Earlier this year in response to market conditions and demand NIP launched an alternative risk practice that specializes in establishing and managing group-based alternative risk transfer vehicles. It's initial venture was the successful launch of the Garden State Municipal Joint Insurance Fund (GSMJIF). The GSMJIF is already one of the largest joint insurance funds in the State of New Jersey, insuring the property and casualty requirements of towns comprising over 240,000 NJ residents.

With corporate headquarters in Woodbridge, New Jersey, NIP has a national presence and administers LandPro(R), one of the largest programs for landscapers in the United States, and TreePro(TM), the largest program for tree services in the United States.

National Insurance Programs has formed NIP Management Company, LLC to act as the organizer of the Conventus initiative and to administer the Conventus program under the auspices of the physician-composed Conventus Board of Governors.

Business Services Industry

N.J. Department of Banking and Insurance Approves National Insurance Programs' Plan to Form a New Medical Professional Liability Insurance Exchange

Business Wire, Sept 12, 2002

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