Physicians who have lost their malpractice insurance. Their demographic characteristics and the surplus-lines companies that insure them.

The present study analyzes demographic data on 920 physicians who lost their coverage and applied to a "surplus-lines" company that insures essentially all applicants. Our analysis reveals that (1) some specialties are heavily overrepresented in the surplus-lines pool, (2) physicians aged 45 to 54 years are also overrepresented, (3) board certification is seen as frequently in the surplus-lines group as in the US physician population, and (4) the percentage of foreign medical graduates in the surplus-lines pool is virtually the same as that in the US physician population. A model of the actuarial process by which claims data can lead to termination of standard coverage suggests that disproportionate representation of high-risk specialties is not simply a function of a high average claims rate. We also show that, in contrast to joint underwriting associations, surplus-lines companies impose high premiums, large deductibles, and restrictions on practice, all of which are likely to reduce the frequency of negligent behavior.