CBS responds to changes in insurance industry

Says insurance decisions shouldn't be based on fear

For the past several years, the insurance industry -- particularly the segment involved in medical malpractice -- has been hard hit. Premiums have soared. Companies have gone bankrupt. Ratings have plummeted. In fact, A.M. Best, one of the top insurance rating organizations, recently called the market of the 1990s a "recipe for disaster."

Yet, despite the "gloom and doom" reports being circulated by some companies, there are a few bright spots in the picture.

Many of the downgrades were based, at least in part, on improved accounting procedures that skewed short-term figures, as well as escalating medical malpractice claims. Tort reform and an improving economy also have many observers saying the end of the insurance crisis may be in sight.

Unfortunately, some chiropractic insurance programs are again using the "scare 'em over to us" marketing tactic. They're trying to make the situation look even worse than it is, often by stressing only the most negative information about their competitors.

For instance, one company reprinted part of an A.M. Best press release on Kemper Insurance, noting that the company was downgraded due to its "weakened capitalization, the ongoing operating uncertainties and execution risk associated with management's announced restructuring initiatives, including the sale of the renewal rights to various lines of business, including its financial lines, bundled and unbundled large risk national accounts, alternative risk programs, environmental and excess casualty and surety business."

"What does all that really mean to a D.C.?" asked Timothy Feuling, president of Chiropractic Benefit Services (CBS). "A doctor who has an occurrence policy with Kemper knows very well the company isn't going to fold! It has more than a billion dollars of assets and it will take care of its claims, no matter where the doctor has his or her policy now."

Although downgraded to a 'B' rating, Kemper Insurance Companies is still considered a strong and healthy company, with assets of $1.5 billion to $2 billion. It plans to sell certain lines of its existing businesses and focus on its most profitable endeavors. In addition, Feuling pointed out, CBS policies has National Indemnity, an A++ rated company, securing the stability of Kemper - and billions of dollars in re-insurance on all its policies

"It's sad but, in order to sell policies, less-than-reputable companies try to frighten doctors into switching insurance when such a move is unwarranted and unnecessary," said Feuling. "The problem with this kind of fear-driven action is that you end up bouncing all over the place and drastically complicating your insurance situation. In this day and age, chasing an 'A' rating doesn't work."

In the past, the conventional wisdom was to always look for an "A" rated company. Today, however, that's extremely difficult since ratings change so often. In 2002 alone, A.M. Best downgraded 151 companies, with less than 10% of companies earning a "superior" rating. Every company writing insurance today is vulnerable, and hopping from one policy to another based on its Best rating is useless, Feuling noted.

He added that CBS has been able to protect itself from much of the insurance industry turmoil since it is a Risk Purchasing Group (RPG) and has the flexibility to change underwriters when needed. "We have been able to move to more stable underwriters when we felt it was required, rather than have our policy holders have to move around, file new applications, and go through the hassle of switching policies," Feuling explained.

Founded in 1990, CBS is one of the oldest chiropractic malpractice insurance programs in the country. It was the first -- and remains the only -- program owned and operated by a chiropractic family committed to lifetime, subluxation-based, family wellness care. It was specifically formed to offer subluxation-based doctors an alternative to medically oriented policies, while still providing the best professional liability coverage available.

In 13 years of operation, it was the largest single financial contributor to the Council on Chiropractic Practice, the non-political organization responsible for producing the Clinical Practice Guideline, "Vertebral Subluxation in Chiropractic Practice." CBS is also the ONLY insurance program to vehemently oppose the adoption and use of the Mercy guidelines. In addition, it is funding a research project to explore the possible link between subluxations and the human immune system.

Many doctors who quickly joined CBS as a way to show their support for subluxation-based chiropractic also benefitted from reduced premiums, because CBS was able to show underwriters that conservative chiropractors face a lower risk of malpractice claims.

In addition, CBS has helped improve the entire chiropractic insurance industry by exposing many of the loopholes and exclusions which used to be commonplace in policies. "Only after we started talking about the dangers of policy exclusions - such as not covering infants, pregnant women, or employees - did other companies begin improving their coverage," Feuling pointed out. "Most still don't have the broad coverage offered by CBS, and none of them provides our type of hands-on, one-to-one customer service."

Some of the most popular aspects of the CBS program:

***  Doctor-owned and doctor-driven

***  Service-oriented, with quick turnaround time for applications (1-3 business days)

***  Incident reporting triggers coverage

***  Offers both occurrence and claims-made policies

***  Extended reporting endorsement for claims-made policy provides indefinite reporting coverage

***  Tail coverage on claims-made policy is provided free of charge with death, disability or one year of continued coverage with CBS and 52 years of age for retirement

***  Defense costs outside of policy limits

***  Prior acts coverage available for doctors changing from other claims-made policies

***  Locum tenens (Vacation relief) coverage for up to 60 days per year included in premium

***  Corporation coverage included in premium

***  "Consent to Settle" clause gives policy holder the right to choose whether to defend or settle cases

***  Sexual misconduct defense coverage included in premium

***  Coverage for most employees (excluding other D.C.s) included in premium

***  Coverage for exam doctors as additional insured at 50% of chiropractor's rate

***  Newly licensed chiropractor discounts for first (75% off), second (50% off) third (25% off) and fourth (15%) year in practice.

***  Discounts for 5, 10, and 20 years of claims-free practice

***  Professional association membership discounts for qualifying chiropractors

***  Continuing education discounts for qualifying chiropractors

***  Part-time discounts for 20 hours or less (50% off).

***  Suspension of coverage available for up to six months

***  Premium reduced during temporary disability

***  Easy monthly payments at low interest rates available upon request

***  Profits used for research efforts, lobbying and other activities to support subluxation-based chiropractic

***  Only malpractice program in the world with evidence/subluxation-based chiropractic guidelines as the underwriting criteria

"I can't predict what will happen in the insurance industry," Feuling admitted. "But acting out of fear can be a costly and serious mistake. When we read something pushing the 'fear factor,' we can't let emotion lead us to take actions we'll later regret. It's vital to take the time to get all the facts and make a reasonable decision."