Oklahoma § 36-2203 - Creation of trust – Conditions – Entities insured – Law

§ 36-2203. Creation of trust – Conditions – Entities insured – Law

governing reserves and surplus – Conversion of domestic stock

insurers.

A. An association may create a trust to self-insure physicians,

allied health care professionals or health care institutions against

medical professional liability claims and related risks upon

complying with the following conditions:

1. Establishment of a trust to provide coverage against medical

professional liability claims and related risks;

2. Employment of appropriate professional staff and consultants

for program management and purchase of such administrative services

as may be required;

3. The trust investment powers and limitations shall be the

same as those of any Oklahoma domestic casualty insurance company;

and

4. Performance of all acts necessary or desirable to the

conduct of the business of a medical professional liability insurer.

B. A trust may purchase, on behalf of the members of the

organizing association, specific excess insurance, aggregate excess

insurance, and reinsurance, as in the opinion of the trustee are

necessary. A trust is further authorized to purchase risk

Oklahoma Statutes - Title 36. Insurance

management services as may be required and pay claims that arise

under any deductible provisions.

C. If the terms of the trust so authorize, the trust may insure

the following entities against medical professional liability claims

and related risks:

1. Organizations or associations in which physicians, allied

health care professionals or health care institutions are qualified

members;

2. Entities that own or operate otherwise qualified health care

institutions under the Oklahoma Medical Professional Liability

Trusts Act;

3. Physicians’ professional practice entities; and

4. Any person for whose acts or omissions an insured may be

held legally responsible.

D. Laws of this state and the provisions of any chapters,

articles or sections of Title 36 of the Oklahoma Statutes related to

required amounts of reserves and surplus are declared inapplicable

to a trust organized and operated under the Oklahoma Medical

Professional Liability Trusts Act, except as provided in the

Oklahoma Medical Professional Liability Trusts Act.

E. A licensed domestic stock insurer that prior to the

effective date of this act writes physicians’, allied health care

professionals’ or health care institutions’ medical professional

liability insurance and is owned wholly by an association shall be

entitled to convert to a trust by:

1. Filing a plan, statement of conversion and trust instrument

with the Commissioner. The plan, statement of conversion and trust

instrument shall list all conditions to be fulfilled by a designated

date, upon which such conversion will be effective, and all base

rates to be charged by the trust;

2. Approval by vote or written consent of three-fourths (3/4)

of the board of directors or trustees of the insurer’s parent

association;

3. Creation of a trust by the insurer’s parent association;

4. Transfer of the assets and liabilities of the insurer to the

trust;

5. Upon ninety (90) days’ prior written notice to affected

policyholders, replacement of the insurer’s outstanding policies by

the trust; and

6. Surrender or divesture for reasonable consideration of the

insurer’s license.

Added by Laws 2004, c. 368, § 60, eff. July 1, 2004.