Captive Insurance Component

In 2002, the Network launched a Captive Insurance Company in Bermuda for the purpose of covering hospital malpractice.  To date, four of its members are owners of the company named System and Affiliate Members Limited (SAAML).  Each of the four hospitals is responsible for its own $1.0m / 3.0m.  Afterwards there is a shared layer of risk.  Above this “buffer layer” is reinsurance, issued by a variety of national and international carriers, which is also shared.  The Company is reviewed by AM Best annually per the New Jersey Health Care Financing Authority, and maintains a B+ rating.  The Company has been so successful that it has had to retain an outside investment firm to manage its reserves.  Over time other Network members are expected to join.

The Network is currently analyzing the possibility of forming a Risk Retention Group (RRG) to provide malpractice coverage for the hospitals’ voluntary medical staff.  It would begin in late 2006 or early 2007.