ISMIE: Moratorium on New Business
Move will protect insureds

Last October, ISMIE Mutual’s physician board of directors
voted to impose a moratorium on new business, effective
January 1, 2003.

It was a difficult decision to make, especially since so few insurance carriers still write business in Illinois. But, given recent
increases in claims severity, a moratorium on new business is in
the best interests of ISMIE’s nearly 14,000 physician
policyholders.

Ironically, this decision is the result of ISMIE’s 26 years of success insuring Illinois physicians. Our commitment to sensible underwriting, meticulous financial management, and aggressive physician defense have made ISMIE what it is today.

But being the market leader in the medical malpractice business has its downside. ISMIE has
grown 32 percent since 2001, that’s a double-edged sword. In the insurance business, more
policyholders translates into more potential risk.

ISMIE has grown so fast the past two years that the company literally needs to “take a breather” in order to ensure that financial reserves match the phenomenal growth in new business. To that end, the Board also elected to boost net reserves by 6.8 percent, thus ensuring ISMIE’s long-term stability.

“We have worked hard over many years to build a superior track record of financial strength and service to physicians. This moratorium enables us to preserve our disciplined underwriting philosophy and the quality product we now offer physicians, well into the future,” noted ISMIE Chairman Harold L. Jensen, M.D.

There are exceptions to ISMIE's new business moratorium. Physicians joining an ISMIE-insured physician's practice will be eligible to apply for coverage, as will physicians who are joining ISMIE-insured economically integrated groups. Physicians starting their first year of medical practice after completing their residencies will be eligible to apply as well.

The ISMIE Mutual Board of Directors will consider lifting the new business moratorium when the
medical liability situation in Illinois improves. Until then, ISMIE will continue to protect the interests of its policyholders.