In the mid-1970s, the medical professional liability insurance industry was on the verge of a crisis.  Between 1969 and 1975, the number of medical liability claims filed against physicians had tripled.  This factor, combined with actuarial predictions of staggering increases in the costs of medical liability awards and settlements, compelled the primary source of medical professional liability insurance—the commercial insurance market—to raise rates to levels never before seen or abandon the line of the business altogether.

Faced with a rapidly declining market in professional liability insurance, physicians and organized medicine—led by state and county medical societies and hospital associations—banded together to form a new breed of insurance company: the physician-owned medical professional liability insurance carrier.  The pioneering companies were formed in New York, California, Maryland, Michigan, North Carolina, and Ohio and eventually these new kinds of companies were launched throughout the nation.

Why a physician-owned company?  What made doctors think they could succeed in an industry that was under extreme pressure?  As thousands of physicians faced a dual dilemma—meet the cost of rapidly increasing premiums and find a company that would sell them this fast-disappearing insurance coverage—taking matters into their own hands seemed to be the only solution.

These new companies differed from the commercial insurance carriers, in philosophy and in extent of commitment to their insureds.  They pledged to provide affordable insurance protection, and also to find ways to minimize risk among their physician colleagues.  They looked for new strategies for improving patient care.  These enterprises melded the skills and knowledge of physicians and insurance professionals into a fresh approach to addressing medical professional liability challenges.

The PIAA Is Established

In 1977, the newly established doctor-owned companies formed the Physician Insurers Association of America (PIAA) to provide a forum for exchanging information and solving problems.  The PIAA would also serve as an advocate for an affordable and dependable medical liability insurance market. The new Association would help make it possible for its member companies to offer reasonably priced liability insurance to healthcare professionals and facilities.  Furthermore, as the unified voice for this unique industry, the PIAA was in an excellent position to promote the practice of high-quality and safe medicine.


PIAA Expansion

The PIAA originated as an organization comprised of companies that insure only physicians.  However, as the healthcare market expanded, the Association broadened its scope to include entities that insure other types of healthcare practitioners.  Carriers operated by dentists and oral maxillofacial surgeons were added to the ranks of the Regular membership, and an Associate Member category was created for provider-owned and/or -operated companies that offer MPL coverage for hospitals, podiatrists, and chiropractors.

The PIAA also established an international membership category for companies that conduct medical indemnity and MPL insurance operations outside of the United States.  These companies are based in (for example) the United Kingdom, Canada, and Australia, and all told, they insure more than 400,000 doctors and other practitioners, as well as hospitals.

In an effort to keep members apprised of the latest products, services, and technological advancements, the PIAA instituted an Affiliate Member category.  This program is intended for companies that provide goods and services to MPL Member companies; they must also support the mission of the PIAA.  PIAA Affiliate Members include reinsurers, reinsurance intermediaries, financial service providers, actuaries, accountants and auditors, IT consultants, brokerages, and others.

In addition, as an expansion of its Affiliate Member category, the PIAA created an Affiliate Member segment dedicated to defense law firms.  These firms have an ongoing business relationship with a current PIAA member.  This unique membership provides defense attorneys with unparalleled opportunities for new learning and better communications on issues of critical importance to the PIAA companies they work with.

In 2011, the formerly Associate Member category was subsumed into the Regular Member category.  In addition, a non-voting Industry Associate Member category, for companies that offer MPL coverage, but do not meet the established criteria for Regular membership was created.