Session Laws

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 8E of chapter 26 of the General Laws, as amended by section 1 of chapter 399 of the acts of 1991, is hereby further amended by adding the following two paragraphs:-

There shall be within the rating bureau at least the following persons who shall perform the duties of the rating bureau relating to medical malpractice liability insurance: an actuary, a rate attorney, and a researcher. The actuary shall be a member of the Casualty Actuarial Society or shall have attained a doctoral degree in a related discipline. Such actuary, rate attorney, and researcher shall be appointed by the commissioner and shall be exempt from the provisions of chapters thirty and thirty-one.

The commissioner is authorized to make an assessment against the Joint Underwriting Association established pursuant to chapter three hundred and sixty-two of the acts of nineteen hundred and seventy-five, any successor organization to it, and any other insurer subject to section five A of chapter one hundred and seventy-five A, to pay for the rating bureau's expenses as they relate to medical malpractice liability insurance. Such assessment shall be deposited into the Rating Bureau's Medical Malpractice Insurance Trust Fund. All monies deposited into the trust fund shall be expended, without appropriation, exclusively by the rating bureau. Such assessment shall be made at a rate sufficient to produce three hundred thousand dollars in the first twelve months, and may be increased annually thereafter by a rate not to exceed the most recent annual consumer price index calculated by the Bureau of Labor Statistics of the United States Department of Labor for the northeast region for all urban consumers. In addition to such assessment, the commissioner of insurance shall also collect, for the persons within the rating bureau who perform the duties relating to medical malpractice liability insurance, an amount equal to the cost of fringe benefits as established by the commissioner of administration pursuant to section five D of chapter twenty-nine to be credited to the General Fund. Said amount shall be expended, without appropriation, to pay for such persons' fringe benefits. If the commissioner shall fail to expend any money collected under this paragraph in any fiscal year, such unexpended amount shall be credited against the assessment to be made in the following year and the assessment in the following year shall be reduced accordingly. Funds collected under this section may be used to compensate consultants retained by the rating bureau and to defray its reasonable operating expenses and administrative overhead costs. The assessment, including the collection for fringe benefits, shall be collected by the commissioner of insurance. Any entity assessed shall pay the amount assessed within thirty days after the date of the notice of assessment from the commissioner. The rating bureau shall regularly perform market conduct examinations as often as the commissioner deems appropriate.

SECTION 2. Chapter 175C of the General Laws is hereby amended by inserting after section 6 the following section:-

Section 6A. No person who serves as a director, officer, trustee or agent of the association shall be held liable solely by reason of such service as a director, officer, trustee or agent for any act or omission resulting in damage or injury to another, if such person was acting in good faith and within the scope of his official functions and duties, unless such damage or injury was caused by willful or wanton misconduct.

SECTION 3. Section 6 of chapter 362 of the acts of 1975, as most recently amended by chapter 65 of the acts of 1992, is hereby further amended by inserting after the fourth paragraph the following paragraph:-

The commissioner shall have the authority to oversee the implementation by the board of directors of all aspects of the plan of operation. In construing said authority, the commissioner shall be afforded broad discretion to accomplish the objectives set forth herein, and in the plan of operation.

SECTION 4. The seventh paragraph of said section 6 of said chapter 362, as most recently amended by chapter 92 of the acts of 1991, is hereby further amended by adding the following sentence:- Any deficit directly related to the doctor of dental science category of insured may be recouped by means of an assessment by the association, so long as such assessment is levied only against the doctors of dental science who were insured by the association under an assessable policy during the period with respect to which any such deficit was incurred.

SECTION 5. Said section 6 of said chapter 362 is hereby further amended by adding the following three paragraphs:-

With respect to the Joint Underwriting Association, established herein, and any successor organization to it, the commissioner may institute a rehabilitation proceeding against the association if after examination of the affairs of the association, the commissioner determines that the association: (i) is unable to meet its obligations in the normal course of business, assuming reasonable rates of investment income on its assets, or (ii) is operating in violation of its plan of operation or law, by making application to the supreme judicial court for Suffolk county for appointment as receiver to rehabilitate the association and conserve its assets. The court may on such application issue a temporary injunction restraining the association in whole or in part from further proceeding with its business and may appoint the commissioner as temporary receiver forthwith, and, after notice and a hearing, may appoint the commissioner as permanent receiver and authorize the commissioner to take possession of the association and to conduct its business for the purpose of rehabilitating it by taking such measures as may be proper to eliminate the causes or the conditions which caused the institution of such proceeding, subject to the order of the court, or may dismiss the petition.

The receiver may at any time make application to the court for the termination of the rehabilitation proceeding and for the return to the association of all its property and effects, with authority to resume the conduct of its business. The court, if satisfied after notice and a hearing that the purposes of the rehabilitation proceeding have been substantially completed, shall grant such application.

In the rehabilitation proceeding the court may authorize the receiver to employ such counsel and other assistants as may be necessary for the proper conduct of such proceeding. The compensation of such counsel and assistants and all other necessary expenses of conducting such a proceeding shall be paid out of the funds or assets of the association in the possession of the receiver.

SECTION 6. Said chapter 362 is hereby further amended by inserting after section 6 the following section:-

Section 6A. No person who serves as a director, officer, trustee or agent of the Joint Underwriting Association, established pursuant to section six, shall be held liable solely by reason of such service as a director, officer, trustee or agent for any act or omission resulting in damage or injury to another, if such person was acting in good faith and within the scope of his official functions and duties, unless such damage or injury was caused by willful or wanton misconduct.

SECTION 7. Chapter 223 of the acts of 1985 is hereby amended by inserting after section 8 the following section:-

Section 8A. No person who serves as a director, officer, trustee or agent of the association shall be held liable solely by reason of such service as a director, officer, trustee or agent for any act or omission resulting in damage or injury to another, if such person was acting in good faith and within the scope of his official functions and duties, unless such damage or injury was caused by willful or wanton misconduct.