Generally speaking, once a premium is paid to an insurance company, it is gone. The Louisiana Medical Mutual Insurance Company (LAMMICO,) which was founded in 1981, announced its first dividend to policyholders in the spring of this year, 2008. That’s quite a long time to wait for a dividend return, if it were just that once. Now, for the second time in 2008, LAMMICO has reported it will be returning a 20 percent dividend to all LAMMICO policyholders in Louisiana and Arkansas. Some 6000 policy holders are expecting a dividend check during the first quarter of 2009, if they had coverage as of November 21, 2008.
There is a catch, though. Just as with the last dividend, the stated 20 percent is a bit deceiving. The amount is actually closer to ten percent of the premium paid in many cases. There’s a Louisiana Patients’ Compensation Fund (PCF) surcharge included when appropriate, which apparently about doubles the premium for those practicing in Louisiana.
LAMMICO has declared the total dividend to be about $10.3 million. While that’s good news in one sense, it means their insured medical professionals were either charged $10 million too much, or the combined efforts of policyholders and aggressive defense by LAMMICO managed to reduce liability claims by that sum. It’s always best to err on the side of caution, though. If they had not collected that amount and claims had been greater, it could have put the company’s owners at risk of having to repay the amount of the claims, both separately and collectively. Since LAMMICO is policyholder-owned, that may mean that those who have coverage through LAMMICO would be held liable. Since A.M. Best has rated LAMMICO an A- for more than a decade (due to its financial stability and security,) it seems this company, unlike some others in similar setups, is taking necessary and appropriate steps to protect its owner-policyholders.
There are many factors to consider in choosing an insurance carrier. As an independent broker, Presidio Insurance is able to be objective in matching healthcare providers with the most appropriate carrier for their needs. As 2008 comes to a close, give us a call to evaluate your coverage. Think of it as a free, no-obligation check-up!