August 16, 2001
Contact: Lucas Hamilton
Pennsylvania Insurance Department places PHICO under rehabilitation PHICO is the largest writer of medical malpractice insurance in Montana
The Pennsylvania Department of Insurance has placed PHICO Insurance Co. under rehabilitation, giving the department statutory control of the company and the ability to analyze, evaluate and oversee the company's finances.
PHICO provides medical malpractice insurance for hospitals, physician groups and individual physicians. In 2000, PHICO wrote $3.7 million in medical malpractice premiums in Montana, more than any other insurer.
PHICO filed a quarterly statement late yesterday that reflected a surplus of $6.8 million, down from its year-end 2000 surplus of more than $127 million.
The $6.8 million surplus places PHICO in mandatory control level based on their risk based capital requirements. Risk factors specific to a company's operations, assets, liabilities, loss reserves and other business risks are used in the requirement methodology to determine the adequacy of an insurer's capital. The risk based capital requirement is a powerful tool in the regulator's solvency-monitoring process and is used to identify companies that may be in a weakening capital position.
Rehabilitation puts numerous policyholder safeguards in place, including the conservation of the remaining assets of the company and the development of a payment plan that gives priority to policyholders.
With headquarters in Mechanicsburg, Pa., PHICO is licensed to write insurance in all 50 states, Puerto Rico and the Virgin Islands. In 2000, the company's nationwide direct written premiums were in excess of $242 million.
Montana policyholders with questions about PHICO can call the Montana Insurance Department at 1-800-332-6148.
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