Nebraska Department of Insurance

PRESS RELEASES AND NOTICES

NOTICE

Underlying coverage limits for the Excess Fund will increase from $200,000 / $600,000 ($200,000 / $1,000,000 for hospitals) to $500,000 / $1,000,000 ($500,000 / $3,000,000 for hospitals) for policies issued or renewed after January 1, 2005, that is to say, January 2, 2005. The starting date is 1/2/2005, not 1/1/2005. This is the result of LB 998, which is codified at Neb.Rev.Stat. § 44-2831.01. That section specifies that the increased limits are effective "after" January 1, 2005, as opposed to "on or after" January 1, 2005.

LB 998 also provided for a rolling implementation date allows providers that are already qualified under the Act to wait until their policy renewal to increase their limits of liability. For instance, if a currently qualified physician's policy renews on March 1, 2005, then the insurer will be liable for $200,000 for covered occurrences prior to March 1, 2005, and $500,000 for covered occurrences on or after March 1, 2005 (presuming this to be a claims-made policy).

Newly qualifying providers (on or after 1/2/2005) will need the higher limits to qualify, regardless of the renewal date of their underlying coverage. This will make a little extra work for insurers, because they will have existing policies written for groups of doctors, where each doctor has a $200,000 / $600,000 limit. Should a new doctor join the group on or after 1/2/2005, however, that doctor will need to have $500,000 / $1,000,000 limits, even though other doctors in the practice can remain at the lower limits until renewal.

Should you have any questions with regard to these matters, please contact Alan Wickman.