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Premiums were set at a prudent level as determined by actuaries who are totally
independent. If premiums turned out to be more than was needed for claims and
for maintaining a prudent financial cushion, the difference would be returned
to the policyholders. Everyone acknowledged that it would be several years
before the cost of the first year’s claims were known.
One of the important principles established by the original board of directors
was that the new company should do more than simply collect premiums and pay
for defense and settlement of claims. There was a clear mandate to educate
physicians about the causes of malpractice suits and how to prevent them.
In May 1976, the fledgling SVMIC wrote its first policy. By the end of 1977,
the company insured 3,840 Tennessee physicians. A year later it was deemed
unnecessary to continue collecting capital contributions, since the company was
beginning to generate its own surplus. Between 1979 and 1981, all the
contributions were returned.
By the end of 1988, SVMIC insured 6,528 Tennessee physicians. By this time,
several commercial insurers had returned. Since most Tennessee physicians in
private practice were already insured by SVMIC, the Board began to look outside
the borders of the state. In 1989, SVMIC began insuring physicians in Arkansas.
Virginia was added in 1991. Neither of these states had formed a
physician-owned mutual company and welcomed SVMIC as an alternative source of
insurance.
In December 2001, the St. Paul Companies announced a total withdrawal from the
medical professional liability field, citing overwhelming losses far in excess
of their premiums. Shortly thereafter, several other medical liability carriers
went into receivership. Many physicians in the southeast were forced to look
for another insurer, and SVMIC was viewed as a safe haven.
Today, the company is still a mutual, is still owned 100% by its policyholders,
and is still governed by a board of 18 persons, the great majority of whom are
physicians. SVMIC is honored to insure over 16,000 physicians in Tennessee,
Arkansas, Virginia, Kentucky, Georgia, Alabama and Mississippi. Just over
10,000 are in the company’s home state of Tennessee. It is one of the largest
and most successful insurance ventures of its kind, as is attested to by its “A
(Excellent)” rating from the independent rating agency, A. M. Best. No other physician-owned liability
insurer has a higher rating. The company's
headquarters are in Brentwood, a Nashville suburb, where 155
professionals in
finance, accounting, underwriting, nursing, law, medical practice
management, information technology, risk management, marketing and policy service are
dedicated to a single task, serving the physicians insured by SVMIC.
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