In 1980 Hartford Hospital developed a professional liability insurance program with the Aetna Life and Casualty Insurance Company. The unique feature was that all of the participants in the program were to have a common financial stake in the claims experience. Improved loss experience, realized by Hartford Hospital and its physicians insured under this program, would provide for the return of a portion of premiums paid by the physicians and the hospital. A program of aggressive risk management in which all insureds are required to participate under the direction of a full-time risk manager at the hospital was instituted to reduce incidents, claims and losses. Where special problems were identified, changes in clinical programs to improve care and reduce losses were instituted. In 1984, the hospital and physician risk pools were combined to heighten the level of cooperation between the hospital and physicians in reducing losses.
In 1987, Connecticut Health System, Inc. assumed overall sponsorship of the program, designated as the CHS Professional Liability Insurance Program. On October 1, 1987, Meriden-Wallingford Hospital (now MidState Medical Center) and its physicians joined the program. On October 1, 1989, Newington Children's Hospital (now Connecticut Children's Medical Center) and its physicians joined the program. For the plan years 1981 through 1990, return premiums of approximately $29 million resulting from better than expected loss experiences have been made to the program participants. As of December 31, 2003, all plans years 1981-1990 are closed out and no further dividends will be paid.
Aetna phased out all of its medical professional liability coverage nationwide prior to 1990 except for the CHS program. In 1990, Aetna indicated its desire to terminate its further participation. CHS administration, along with representatives of administration and staff from each CHS hospital, studied several models and major insurance companies before proceeding with a program using the St. Paul Insurance Company. The results of our study led to the creation of CHS Insurance Limited, a Bermuda reinsurance company. The St. Paul eliminated its malpractice insurance line of business effective October 1, 2002. The CNA Insurance Company was selected to replace the St. Paul effective October 1, 2002.
Policy issuance and claims management are administered through CNA. CHS Insurance Limited reinsures CNA. R.C. Knox & Company provides support by acting as the local agent for CNA on behalf of the CHS program. R.C. Knox has been involved with the program since its inception in 1980.