Do I have to apply for the dividend?

No.  It is automatic for all eligible insureds.

Who is considered an “eligible insured”?

Any policyholder who was insured during the July 1, 2005, to June 30, 2006, policy year and has been continuously insured by ISMIE and renews on or after July 1, 2007, is considered an eligible insured.  The dividend will be given to the policyholders automatically as a credit on their first renewal billing for the new policy year.

How will the individual amounts for a physician be determined?

• The amount in the dividend pool will be distributed to all eligible insureds and will be applied as a credit to each policyholder’s renewal premium.  The dividend amount will be calculated from the policyholder’s “adjusted base premium” for the first million in coverage for the 2005-2006 policy year.  “Adjusted base premium” is the manual rate adjusted for the insured’s claims-made maturity year factor, less any newly practicing discount, part-time discount or suspended coverage.  It does not include any credits (such as loss-free, schedule rating, or Risk Rewards) or debits.

• The dividend will not cover allied health professionals sharing limits of liability with their employer.

• The dividend will include clinic policies.

Why is it only including the first million in coverage?

ISMIE reinsures the coverage over one million and passes all the risk premium on to the reinsurer.  Thus, there is no premium to share on this coverage.

How will the dividend be paid?

The dividend will be a credit on the first quarterly installment of the 2007/2008 policy year and, if appropriate (see next question), the first quarterly installment of each succeeding year. 

Is the original determination of the dividend pool ($18.4 million) a fixed amount for all four years?

No.  The first actuarial projection for the PY 2005/2006 year was made this spring when the 2005/2006 policy year was still open.  Each year for the next three years ISMIE will have the actuaries look at the 2005/2006 policy year and give a more current estimate.  These new looks will determine the amounts of the dividend pool.  If the experience is getting worse the amount will decrease; but if the experience is improving the amount will increase.

When originally announced, this was to be a two-year program.  Does this now mean that this is a four-year program?

No.  The announcement was about a program for two policy years.  In addition to the review of the 2005/2006 year in the spring of 2008, ISMIE will also look at the 2006/2007 policy year.  Like the dividend for the 2005/2006 year, if 2006/2007 along with the 2005/2006 policy year is above the established benchmarks ISMIE will establish a pool and pay dividends for the 2006/2007 policy year as well.  If payments are appropriate for the 2006/2007 policy year, they would mirror the schedule laid out for the 2005/2006 policy year.  That means there is a possibility of having credits for two years worth of dividends in 2008.