Section 242.7. Discontinuation of basic coverage insurance and notices of noncompliance

(a) Cancellation or nonrenewal.

(1) Cancellation or nonrenewal of coverage resulting from the request of the insured or the cancellation or nonrenewal by the insurer or self insurer automatically releases the Fund from liability for claims for injuries or death from services which were rendered or which should have been rendered by the health care provider which occur after the effective date of cancellation or nonrenewal.

(2) Cancellation or nonrenewal of claims made coverage resulting from the request of the insured or the cancellation or nonrenewal by the insurer without the purchase of the reporting endorsement, prior acts coverage or its substantial equivalent automatically releases the Fund from liability for claims for injuries or death from services which were rendered or which should have been rendered by the health care provider which occur or which are reported to the basic coverage insurance carrier after the effective date of cancellation or nonrenewal.

(b) Copies of cancellation evidence, that is, notices, confirmation and so forth, and evidence in support of refunds under § 242.5 (relating to adjustment of surcharge) shall be submitted to the Director along with Form 216.

(c) Notice of cancellation of a claims made policy shall clearly indicate that it is a claims made policy which has been cancelled. The notice shall also clearly indicate whether the health care provider has purchased a reporting endorsement for tail coverage.

(d) In the event that a health care provider elects to purchase prior acts coverage or its substantial equivalent rather than the reporting endorsement, it is the duty of the insurer providing this coverage to immediately notify the fund of the election, in writing, specifying the full name of the health care provider, license number, specialty code, effective and retroactive dates of coverage and previous carrier. Submission of the declarations page and remittance of the surcharge shall be made as provided for in § 242.6 (relating to reporting forms and procedures).

(e) The insurer shall notify the Fund of those health care providers who either fail to procure increased basic coverage insurance limits under section 701(a) of the act (40 P. S. § 1301.701(a)) and pay the surcharge thereon or who fail to pay the emergency surcharge when levied.

(f) Notices required under this section with the exception of subsection (d) shall be given as soon as possible upon the expiration of the remittance period established by the insurer’s billing.

The provisions of this § 242.7 adopted October 15, 1976, effective October 16, 1976, 6 Pa.B. 2565; amended March 17, 1978, effective March 18, 1978, 8 Pa.B. 755; renumbered February 9, 1979, 9 Pa.B. 498; amended September 30, 1983, effective October 1, 1983, 13 Pa.B. 2969; amended April 27, 1984, effective April 28, 1984, 14 Pa.B. 1453. Immediately preceding text appears at serial pages (85383) to (85384).

Notation

Authority

The provisions of this § 242.7 issued under sections 206 and 506 of The Administrative Code of 1929 (71 P. S. § § 66 and 186); and sections 701(e)(4) and 702(a) of the Health Care Services Malpractice Act (40 P. S. § § 1301.701(e)(4) and 1301.702(a)).

Notes of Decisions

Relief in Court

These provisions provide for resolution of complaints of adverse agency action, and as such, do not provide adequate remedy or preclude litigant from seeking relief in court, where issue is Cat Fund’s failure to pay share of malpractice claim settlement, which places Fund in position of defendant, as opposed to its designed position of participant and/or arbiter. Ohio Cas. Group of Ins. Companies v. Argonaut Ins. Co., 525 A.2d 1195 (Pa. 1987).

Tail Coverage

Patient brought action against Medical Care Availability and Reduction of Error Fund (Fund) and pediatrician, asserting Fund was required to defend and indemnify pediatrician in patient’s medical malpractice action; pediatrician did not purchase tail coverage or its substantial equivalent when he terminated his claims made policy, therefore, Fund was not required to indemnify and defend claims arising after policy termination. Gingerlowski v. Commonwealth Ins. Dept., 961 A.2d 237, 243 (Pa. Cmwlth. 2008).