As Florida moves forward with laws aimed at curbing medical-malpractice lawsuits, state regulators are ready to consider the sale of a major malpractice insurer to a California company.
The Office of Insurance Regulation has scheduled a July 21 public hearing on the proposed sale of Jacksonville-based FPIC Insurance Group Inc. to The Doctors Co. of Napa, Calif.
Officials from both companies said Wednesday they could not discuss details of the pending $363 million deal, which was announced in May. Along with Florida regulators, it needs approval from FPIC shareholders and insurance officials in Texas and Missouri.
But in a news release at the time of the announcement, FPIC Chairman Kenneth Kirschner said the sale will be good for policyholders and shareholders. The privately held Doctors Co., a larger carrier, agreed to pay $42 a share for FPIC.
We are pleased to have found a strategic, well-respected partner in The Doctors Co., which shares our steadfast commitment to providing exceptional service to our policyholders and is committed to the long-term success of the medical professional liability insurance industry, Kirschner said.
A preliminary proxy statement filed with the U.S. Securities and Exchange Commission indicates FPIC leaders mulled a sale since 2008 and talked with several potential buyers. If the deal with The Doctors Co. gets the needed approvals, it would close later this year.
FPIC says it has more than 18,000 policyholders, is the largest medical-liability insurer in Florida and writes coverage in 14 states. The deal needs approval in states where FPIC subsidiaries are based, with First Professionals Insurance Co. and Anesthesiologists Professional Assurance Co. based in Florida.
The proposed deal comes as Florida moves forward this year with new laws that could bolster malpractice insurers and doctors, who long have argued they need increased protections from lawsuits.
Gov. Rick Scott and lawmakers approved a series of changes this spring, such as trying to shield doctors from costly malpractice claims that stem from treating Medicaid beneficiaries. Also, they approved a bill that would place restrictions on out-of-state expert witnesses who testify against Florida doctors.
FPIC, through its First Professionals Insurance Co. subsidiary, was a prominent player during a months-long legislative fight about malpractice lawsuits in 2003. It did not play such a public role during this years session, though its lobbyists included high-profile insurance lobbyist Mark Delegal and former Secretary of State Sandra Mortham.
Critics of limiting malpractice lawsuits, however, often point to insurers, such as FPIC, for problems that doctors might have in affording liability coverage.
During a debate near the end of this years legislative session, Rep. Richard Steinberg, D-Miami Beach, pointed to legislation passed in 2003 that made it harder to sue for malpractice. He said doctors continue complaining about insurance rates.
The issue is not that the patients have too many rights, the problem is there is not sufficient competition in the malpractice-insurance industry, Steinberg said.
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