Section 4203.APPENDIX A Filing Requirements for Medical Malpractice Reporting

General Instructions

● All (C-5)(1) reports shall include only direct Illinois medical malpractice insurance business and be included in File 1, as referenced in Appendix B (Guidelines for Submission of Medical Malpractice Insurance Reporting).

● The (C-5)(2) Reserve Study requires information and data pertaining to only Illinois medical malpractice business written. Reserve Study Exhibit 2A shall be included in File 2 and Reserve Study Exhibit 2B shall be included in File 4, as referenced in Appendix B.

● The (C-5)(2) Surplus Study requires information and data pertaining to the company's overall business, not specifically limited to Illinois medical malpractice business. Surplus Study Exhibit 2A shall be included in File 3 and Surplus Study Exhibit 2B shall be included in File 4, as referenced in Appendix B.

● The (C-5)(2) Consulting Actuarial Report and Data Supporting the Company's Rate Filing requires information and data supporting the company's most recent rate filing. The Consulting Actuarial Report and Data Supporting the Company's Rate Filing shall be included in File 4, as referenced in Appendix B.

● The Company Defined Items requires information about the data submitted and shall be included in File 4, as referenced in Appendix B.

● Each company must provide a Reconciliation as outlined in these Filing Requirements. The Reconciliation shall be included in File 4, as referenced in Appendix B.

● Sample tables are provided to assist companies in understanding the required data elements. They are provided for illustrative purposes only. Do not submit your data in a file format consistent with the examples. For file format, please follow the IT reporting guidelines as detailed in Appendix B.

● For all reports requiring "by county" information, the company may group the data by policy issuing county or other method that is consistent with its ratemaking practices. The company must identify which method is used. The company must use a consistent method to group the data in all "by county" reports. Data grouped by territory is unacceptable. Describe any changes made to the way in which the data has been grouped during the past ten years and the impact of the change(s) on the reports.

● Individual policy exposures are exposures of policies covering individuals, i.e., physicians, surgeons, nurses, etc.

● If reserving or claim payment practices have changed in the past ten years, describe the change(s) and the impact of the change(s) on the reports.

● Policy types are as follows:

○ Claims made includes prior acts coverage

○ Occurrence includes extended reporting endorsements

Use these policy type definitions in all reports, unless otherwise denoted below.

● Policy limit information shall include both per occurrence and aggregate limits. For reporting format of policy limits, see Appendix B, File Protocols, (B) File Formats.

● The effective date of an extended reporting endorsement is the date the endorsement took effect.

● A claim is a formal or written demand for compensation under a medical liability insurance policy relating to allegations of liability on the part of one or more providers for any act, error or omission in the rendering of, or failure to render, medical services for medically related injuries. It includes any instance for which benefits or compensation are payable or eligible to be paid under any coverage under the policy. They shall be reported on a per defendant basis for the (C-5)(1)(c) reports and the Reserve Study.

● Companies shall report their closed claim information consistent with the company practices of closing a claim and define what is considered a closed claim, i.e, a claim is defined as closed when it is assigned a closed date, when both indemnity plus expense reserves are $0, etc. Describe any change(s) made to this definition in the past ten years and the impact of the change(s) on the reports.

● Consulting actuary means an independent or company actuary appointed or retained by the company to develop the company's rates, as required by Section 155.18 of the Code, and to create supporting actuarial report and data, as required by Section 1204(C-5) of the Code.

● Please provide the name, phone number and email address of the person responsible for filing this report with the Division of Insurance.

(C-5)(1) Exhibits

● (C-5)(1) Exhibits require information and data pertaining to only Illinois medical malpractice business written. The level of detail required in each exhibit varies.

● (C-5)(1)(a) Direct paid losses and allocated loss adjustment expenses by policy type, county and policy limit for each of the past ten policy years. The amount of direct losses paid and the amount of direct allocated loss adjustment expenses paid shall be reported separately. Amounts for policies covering individuals shall be reported separately from amounts for policies covering corporate exposures.

● (C-5)(1)(a) Direct incurred losses and allocated loss adjustment expenses by policy type, county and policy limit for each of the past ten policy years. The amount of direct losses incurred and the amount of direct allocated loss adjustment expenses incurred shall be reported separately. Amounts for policies covering individuals shall be reported separately from amounts for policies covering corporate exposures.

○ Incurred losses equal paid losses plus case reserves.

○ Total incurred losses and allocated loss adjustment expenses are required, not just incurred on open claims.

○ An accurate estimate for the claims related to that policy year and county is required. Average incurred severities are unacceptable.

○ If you have less than five exposures in a policy year in a county and the number of open claims in that county is greater than zero and the county is considered a sparsely populated county*, then the loss and expense amount data for that county may be grouped into an "Other" category. This is instead of being separately listed by individual county.

For example:

Policy Year 2002

	Number of Exposures	Number of Claims	Actual Incurred Losses

Bond	2	1	$50,000
Lawrence	3	0	$0
Marshall	1	1	$60,000
Scott	5	1	$75,000

In this example, Bond and Marshall Counties meet all requirements so actual loss and expense data could be summed and reported in an "Other" category. For Lawrence County, in which the number of claims is not greater than zero, and Scott County, in which the number of exposures is not less than five, the loss and expense amount data would be reported separately for those counties, respectively, and Bond and Marshall Counties will each show $0 for incurred loss and expense in the (C-5)(1)(a) exhibits.

So, in this example, the (C-5)(1)(a) incurred losses exhibit would be filed as follows:

Policy Year 2002
County	Incurred Losses
Bond	$0
Lawrence	$0
Marshall	$0
Scott	$75,000
Other	$110,000 ($50,000 in Bond Co + $60,000 in Marshall Co

*The following counties are considered sparsely populated counties: Alexander, Bond, Brown, Calhoun, Carroll, Cass, Clark, Clay, Crawford, Cumberland, De Witt, Douglas, Edgar, Edwards, Ford, Gallatin, Greene, Hamilton, Hancock, Hardin, Henderson, Jasper, Johnson, Lawrence, Marshall, Mason, Massac, Menard, Mercer, Moultrie, Piatt, Pike, Pope, Pulaski, Putnam, Richland, Schuyler, Scott, Stark, Union, Wabash, Warren, Washington, Wayne, White.

● (C-5)(1)(b) Earned exposures by ISO specialty code, policy type, policy year, county, policy limit and claims made age for each of the past ten policy years. Earned individual policy exposures shall be reported separately from corporate policy exposures , as consistent with ratemaking practices of the company.

○ Each company shall provide an explanation/definition of the corporate policies written.

● (C-5)(1)(c)(i) – Claims Made Policies – Base class and territory equivalent exposures by report year by relative accident year. Individual policy exposures shall be reported separately from corporate policy exposures, as consistent with ratemaking practices of the company.

○ As illustrated in the sample table below, each two-dimensional grid shows report year exposures broken down by the relative accident years that contribute to them.

○ For each cell in the grid, the exposures are from Relative Accident Year (X), where X = (Report Year - Retroactive Date Year) + 1.

○ For example, the exposures in the cell for the 1995 Report Year column and Relative Accident Year 2 row would be from Retroactive Date 1994, where Relative Accident Year = (1995 - 1994) + 1.

○ The class and territory equivalents are calculated based on the latest filed relativities. Describe any change(s) made to the company's base class and/or territory in the past ten years and the impact of the change(s) on the exhibits.

○ Each company shall use the base class and territory that is consistent with its most recent rate filing. Each company shall also define its base class and territory.

○ Below is an illustration to assist companies in understanding the required claims made data elements and possible uses of the data. It is for illustrative purposes only. Do not submit your data in this format. For file format, please refer to Appendix B, File 1 – Exhibit 1ci.

Base Class and Territory Equivalent Exposures for Claims Made (By Report Year By Relative Accident Year)

Relative AY

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

XXX

● (C-5)(1)(c)(i) – Occurrence Policies – Base class and territory equivalent exposures by accident year. Individual policy exposures shall be reported separately from corporate policy exposures, as consistent with ratemaking practices of the company.

○ As illustrated in the sample table below, each two-dimensional grid shows earned exposures by accident year.

○ Each company shall use the base class and territory that is consistent with its most recent rate filing. Each company shall also define its base class and territory.

○ If adjustments are made to exposures for extended reporting endorsements, then describe the adjustments made and their impact on the exhibit.

○ Below is an illustration to assist companies in understanding the required occurrence data elements. It is for illustrative purposes only. Do not submit your data in this format. For file format, please refer to Appendix B, File 1 – Exhibit 1ci.

Base Class and Territory Equivalent Exposures for Occurrence (By Accident Year)
AY	1995	1996	1997	1998	1999	2000	2001	2002	2003	2004
Exposures	XXX	XXX	XXX	XXX	XXX	XXX	XXX	XXX	XXX	XXX

● (C-5)(1)(c)(ii) Cumulative loss array by accident year by calendar year of development for occurrence business, which includes:

○ Frequency of the following types of claims:

▪ Open – Number of claims outstanding

▪ Closed with indemnity (CWI) – Cumulative number of claims closed with indemnity

▪ Closed with expense (CWE) – Cumulative number of claims closed with expense only

▪ Closed with no pay (CNP) – Cumulative number of claims closed with no payment

○ Paid severity of:

▪ Indemnity paid on closed claims – Cumulative amount of indemnity paid on CWI

▪ Allocated loss adjustment expense (ALAE) paid on claims closed with indemnity (CWI) and/or claims closed with expense (CWE) – Cumulative amount of ALAE paid on CWI and CWE

▪ Indemnity paid on open claims – Cumulative amount of indemnity paid on open claims

▪ ALAE paid on open claims – Cumulative amount of ALAE paid on open claims

○ Reserves:

▪ Indemnity reserves on open claims – Total aggregate indemnity case reserve

▪ ALAE reserves on open claims – Total aggregate ALAE case reserve

○ This exhibit requires actual loss and allocated loss adjustment expense dollar amounts at different stages of calendar year development. Average, undeveloped amounts are unacceptable.

○ The amounts reported must coincide with the actual claims in that accident year, at the corresponding year of development.

● (C-5)(1)(c)(iii) Cumulative loss array by report year by calendar year of development for claims made business, which includes:

○ Frequency of the following types of claims:

▪ Open – Number of claims outstanding

▪ Closed with indemnity (CWI) – Cumulative number of claims closed with indemnity

▪ Closed with expense (CWE) – Cumulative number of claims closed with expense only

▪ Closed with no pay (CNP) – Cumulative number of claims closed with no payment

○ Paid severity of:

▪ Indemnity paid on closed claims – Cumulative amount of indemnity paid on CWI

▪ Allocated loss adjustment expense (ALAE) paid on claims closed with indemnity (CWI) and/or claims closed with expense (CWE) – Cumulative amount of ALAE paid on CWI and CWE

▪ Indemnity paid on open claims – Cumulative amount of indemnity paid on open claims

▪ ALAE paid on open claims – Cumulative amount of ALAE paid on open claims

○ Reserves:

▪ Indemnity reserves on open claims – Total aggregate indemnity case reserve

▪ ALAE reserves on open claims – Total aggregate ALAE case reserve

○ This exhibit requires actual loss and allocated loss adjustment expense dollar amounts at different stages of calendar year development. Average, undeveloped amounts are unacceptable.

○ The amounts reported must coincide with the actual claims in that report year, at the corresponding year of development.

● (C-5)(1)(c)(iv) Maturity year and tail factors used in the most recent rate filing – If a different tail factor is used for each maturity year, list each tail factor with the corresponding maturity year. If another method is used, list and describe factors and method used.

● (C-5)(1)(c)(v) Factors used in the most recent rate filing:

○ Expense – Companies are required to define what expenses are included in this factor.

○ Contingency

○ DDR

○ Commission

○ Tax

○ Impact of territory and/or class relativity changes (or off-balance) – The factor used in the rate filing that balances the individual relativity changes to the overall change requested

○ Miscellaneous – Any other factors used in the rate filing to establish rates could include, but is not limited to, the following: profit load, reinsurance load, investment income, schedule debits, schedule credits, other. Companies are required to list and define each factor individually.

(C-5)(2) Exhibits

● (C-5)(2)(a) Reserve Study requires information and data pertaining to only Illinois medical malpractice business written. The Reserve Study is made of two exhibits.

● Exhibit 2A Reserves shall contain the data elements described below in the format prescribed in Appendix B.

● Exhibit 2A Reserves is required on a going forward basis, in order to accumulate ten years of data similar to Schedule P of the NAIC Annual Statement.

○ Each of the data elements required in Exhibit 2A shall be reported in accordance with NAIC Annual Statement Schedule P Instructions, but in the level of detail defined here. Note that some of the data required for the NAIC Annual Statement Schedule P filing are not required in Reserve Study Exhibit 2A.

○ Exhibit 2A information shall be provided separately for occurrence plus extended reporting endorsement business/DDR and claims made plus prior acts business and for each of the following types of health care providers:

▪ Physicians, Surgeons and Osteopaths

▪ Hospitals

▪ Other Health Care Professionals, including Dentists

▪ Other Health Care Facilities

○ All data requested shall be by Year in Which Premiums Were Earned and Losses Incurred.

○ Provide the following data elements in accordance with NAIC Schedule P Part 1 Instructions, in the file format prescribed in Appendix B File 2 – Exhibit 2A Reserve Part 1:

▪ Direct and Assumed Premiums Earned

▪ Direct and Assumed Loss Payments

▪ Direct and Assumed Defense and Cost Containment Payments

▪ Direct and Assumed Adjusting and Other Payments

▪ Total Direct and Assumed Losses and Loss Expenses Paid, which equal Direct and Assumed Loss Payments plus Direct and Assumed Defense and Cost Containment Payments plus Direct and Assumed Adjusting and Other Payments

▪ Direct and Assumed Case Basis Losses Unpaid

▪ Direct and Assumed Bulk and IBNR Losses Unpaid

▪ Direct and Assumed Case Basis Defense and Cost Containment Unpaid

▪ Direct and Assumed Bulk and IBNR Defense and Cost Containment Unpaid

▪ Direct and Assumed Adjusting and Other Unpaid

▪ Total Direct and Assumed Losses and Loss Expenses Unpaid, which equal Direct and Assumed Case Basis Losses Unpaid plus Direct and Assumed Bulk and IBNR Losses Unpaid plus Direct and Assumed Case Basis Defense and Cost Containment Unpaid plus Direct and Assumed Bulk and IBNR Defense and Cost Containment Unpaid plus Direct and Assumed Adjusting and Other Unpaid

▪ Total Direct and Assumed Losses and Loss Expenses Incurred, which equal Total Direct and Assumed Losses and Loss Expenses Paid plus Total Direct and Assumed Losses and Expenses Unpaid

▪ Direct and Assumed Loss and Loss Expense Percentage (Direct and Assumed Incurred Losses/Direct and Assumed Premiums Earned)

○ Provide the following in accordance with NAIC Schedule P Part 2 Instructions, in the file format prescribed in Appendix B File 2 – Exhibit 2A Reserve Part 2:

▪ Incurred Direct and Assumed Losses and Defense and Cost Containment Expenses Reported at Year End

○ Provide the following in accordance with NAIC Schedule P Part 3 Instructions, in the file format prescribed in Appendix B File 2 – Exhibit 2A Reserve Part 2:

▪ Cumulative Direct and Assumed Paid Losses and Defense and Cost Containment Expenses Reported at Year End

○ Provide the following in accordance with NAIC Schedule P Part 4 Instructions, in the file format prescribed in Appendix B File 2 – Exhibit 2A Reserve Part 2:

▪ Bulk and IBNR Reserves on Direct and Assumed Losses and Defense and Cost Containment Expenses Reported at Year End

○ Provide the following in accordance with NAIC Schedule P Part 5 Instructions, in the file format prescribed in Appendix B File 2 – Exhibit 2A Reserve Part 3:

▪ Cumulative Number of Claims Closed with Loss Payment Direct and Assumed at Year End

▪ Number of Claims Outstanding Direct and Assumed at Year End

▪ Cumulative Number of Claims Reported Direct and Assumed at Year End

○ Provide the following in accordance with NAIC Schedule P Part 6 Instructions, in the file format prescribed in Appendix B File 2 – Exhibit 2A Reserve Part 4:

▪ Cumulative Premiums Earned Direct and Assumed at Year End

○ Adjusting and Other Expense Payments and Reserves shall be allocated to the accident years in which the losses were incurred based on the number of claims reported, as defined in Schedule P, in those years. If this method is not used, provide a detailed explanation of the method used to assign Adjusting and Other Expenses among the accident years.

○ If Bulk and IBNR Reserves are projected based on Illinois only data, use these reserves in the appropriate columns and data triangles. If Bulk and IBNR Reserves are projected based on any other data, use an actuarial approach to allocate these reserves. Describe the method used and the assumptions underlying the method.

○ If other assumptions are necessary to complete these filing requirements, disclose all assumptions used and why these assumptions are necessary.

○ Below is an illustration to assist companies in understanding the required data elements and possible uses of the data. It is for illustrative purposes only. Do not submit your data in this format. For file format, please refer to Appendix B, File 2 – Exhibit 2A Reserves.

	Exhibit 2A Reserve Part 2
	Incurred Direct and Assumed Losses and Defense & Cost Containment Expenses Reported at Year End
Years in Which Premiums Were Earned and Losses Were Incurred	1995	1996	1997	1998	1999	2000	2001	2002	2003	2004

1995	XXX	XXX	XXX	XXX	XXX	XXX	XXX	XXX	XXX	XXX
1996		XXX	XXX	XXX	XXX	XXX	XXX	XXX	XXX	XXX
1997			XXX	XXX	XXX	XXX	XXX	XXX	XXX	XXX
1998				XXX	XXX	XXX	XXX	XXX	XXX	XXX
1999					XXX	XXX	XXX	XXX	XXX	XXX
2000						XXX	XXX	XXX	XXX	XXX
2001							XXX	XXX	XXX	XXX
2002								XXX	XXX	XXX
2003									XXX	XXX
2004										XXX
Total

● Exhibit 2B Reserve Study shall contain a written response to each question below in the format prescribed in Appendix B, File 4 – Exhibit 2B Description.

1. Provide a general description of the actuarial methodologies used to determine and monitor carried loss and loss adjustment expense reserves for the medical malpractice business written, including frequency of reviews.

2. Discuss the adequacy of medical malpractice loss and loss adjustment expense reserves as of the most recent year-end and identify and describe any material changes in the past five years in amounts of carried reserves and in reserving methods. If a material unfavorable trend exists, indicate what actions were taken to address the issue. Identify the materiality standard used to respond to this question and provide the basis for this standard.

3. Compare company trends to industry trends, with regards to the medical malpractice line of business and include information about the specific business written by the company and, if necessary, reasons why company trends are different from the industry.

● (C-5)(2)(a) Surplus Study requires information and data pertaining to the company. This section does not require information and data specific to Illinois or the medical malpractice line of business. The Surplus Study is made of two exhibits.

● Exhibit 2A Surplus shall contain the data elements described below in the format prescribed in Appendix B.

○ Provid