ATLANTA (March 16, 2017) – MagMutual Insurance Company, one of the nation’s largest medical professional liability insurers, announced today that it continues to set aside the full value of its obligation for the Owners Circle® loyalty program.
Since 2012, MagMutual has declared over $210 million in loyalty funds beyond dividends, including $20 million this month. In addition, $11 million in Owners Circle funds has been paid out to policyholders to date. Chairman and CEO Dr. Joseph Wilson said the company can do this without impacting its financial status and ability to pay claims. MagMutual reported 2016 financials including total admitted assets of more than $1.7 billion, with a surplus of over $914 million – the strongest in its 35-year history.
Starting in 2015, balance sheets began to reflect a line item for Owners Circle® segregated surplus. “As far as we know, we’re still the only company in the industry to voluntarily set aside these monies. We think it’s imperative to make the specific financial provisions necessary to honor our promise,” said Dr. Wilson.
Each year, MagMutual’s physician-led board of directors considers whether and how much the company will allocate to the Owners Circle. Credits to each policyholder’s account are calculated based on the expiring premium for each eligible named insured physician. MagMutual makes account distributions after an insured physician retires from practice, (after age 50), or becomes fully disabled or dies. Policyholders are automatically enrolled in the program after the first year of medical liability insurance coverage.
“What’s promised in return for your loyalty is reflected on our financials,” said Neil Morrell, president of MagMutual. “If a company intends to honor its loyalty retirement promise, then their financial statements should reflect such.”
Morrell said the industry is in danger of pledging more money than it has because NAIC accounting rules potentially allow insurers to understate the full liability of loyalty program declarations.
For more than 30 years, MagMutual has served as a trusted advisor and strategic ally to thousands of physicians and hospitals. We continuously evolve to meet the changing needs of our PolicyOwners℠ and drive advancements in healthcare. Today we offer the best resources in patient safety, expert defense and a range of professional liability coverage. Our comprehensive solutions, combined with our incomparable service, extraordinary financial strength, plus dividends and rewards, provide our PolicyOwners℠ with an exceptional customer experience. For more information, visit www.MagMutual.com.
Media contact information:
Ed Lynch, EVP, Chief Business Operations Officer, MagMutual