NJ Pure

NJ Pure Insurance Review: A Comprehensive Analysis

Brief Introduction and Overview of NJ Pure Insurance

NJ Pure Insurance is a unique entity in the New Jersey medical malpractice insurance market. Established in 2002 as a not-for-profit reciprocal exchange, it was founded by James J. Sheeran (former New Jersey Insurance Commissioner) and Lena Chang (Ph.D. in mathematics) to address a critical shortage of affordable and reliable medical malpractice coverage in the state. Unlike traditional insurance companies, NJ Pure operates as a direct writer, eliminating the need for agents or brokers, leading to potential cost savings for policyholders. This structure, combined with its not-for-profit status, makes it a distinct player in the industry.^[1][2]

Key Highlights of NJ Pure's Market Position and Reputation

• Direct Writer: NJ Pure operates as a direct writer, cutting out intermediaries and potentially lowering costs.^[1][2]
• Not-for-Profit: Its not-for-profit status ensures that any surplus funds are reinvested or returned to policyholders, emphasizing financial stability and transparency.^[1][2]
• Low Attorney-in-Fact Fee: NJ Pure boasts one of the lowest Attorney-in-Fact fees in New Jersey at 12.5% of premiums, further contributing to cost-effectiveness.^[1]

Overview: History and Growth of NJ Pure Insurance

Year of Establishment and Background Story

The founding of NJ Pure in 2002 was a direct response to a significant crisis in the New Jersey medical malpractice insurance market. The 1970s saw a severe shortage of providers and high premiums, forcing two major insurers, St. Paul and Argonaut, to consider withdrawing from the state.^[1][2] This volatile environment underscored the need for a more stable and affordable option for medical professionals. The evolution of the market, culminating in Medical Inter-Insurance Exchange (MIIX) becoming a publicly traded company by 2000, shaped the landscape in which NJ Pure emerged.^[1]

Key Milestones in the Company's History and Growth

• 2002: NJ Pure is founded to address the ongoing medical malpractice insurance crisis in New Jersey.
• 1970s Crisis: The company’s creation is directly linked to the challenges experienced in the medical malpractice insurance market in the 1970s, a period that prompted major industry players to consider exiting the New Jersey market.
• 2000: The shift toward publicly traded companies like MIIX reflects an important change in the market structure and influenced the strategic decisions behind NJ Pure’s establishment.

Regulatory Compliance and Licenses

NJ Pure operates under the strict regulatory oversight of the New Jersey Department of Banking and Insurance, ensuring adherence to all relevant state regulations.^[1] A crucial aspect of NJ Pure's evolution involves its partnership with The Doctors Company RRG (Risk Retention Group). This relationship plays a key role in the seamless transition of NJ Pure's policyholders and provides a continuity of coverage with a well-established and highly-rated insurer. The Doctors Company RRG boasts an "A" (Excellent) rating from AM Best, a leading credit rating agency for the insurance industry.^[3][4]

Insurance Products and Services

Main Insurance Products

NJ Pure's primary offering is medical malpractice insurance specifically designed for physicians and other healthcare providers practicing in New Jersey.^[1][2] Standard coverage options often include a $1 million per occurrence/$3 million aggregate limit, but higher limits are available upon request. The inclusion of CyberGuard (for cyber risk coverage) and MediGuard (for regulatory risk coverage) reflects NJ Pure's forward-thinking approach and commitment to providing comprehensive protection in an evolving healthcare landscape.^[3][4]

Additional Services

Beyond core insurance coverage, NJ Pure provides valuable support services to its policyholders. These services extend beyond just claims processing; they include risk management resources. A 24/7 risk management hotline and access to extensive patient safety tools highlight NJ Pure's commitment to proactively safeguarding its policyholders and enhancing their practice management.^[3][4]

Premiums and Pricing

Pricing Structure

NJ Pure’s premium rates are notably competitive, a direct result of its direct writing model and not-for-profit status. By eliminating the need for brokers and agents, NJ Pure efficiently manages its operational costs and transfers those savings to its policyholders.^[1] While direct comparisons to industry averages are not explicitly provided, NJ Pure’s commitment to efficiency ensures that a larger proportion of premiums is allocated to claims and operational expenses, resulting in better value for the policyholder.

Discounts and Special Offers

NJ Pure doesn’t publicly advertise specific discounts or promotional offers. However, the inherent cost savings embedded in its business model—being a direct writer and not-for-profit—represent significant implicit discounts compared to traditional insurance providers. This makes their pricing strategy more aligned with value creation for policyholders rather than promotional incentives.

Customer Service and Support

Contact Methods

NJ Pure provides convenient contact channels for policyholders. Communication can be initiated through telephone (877-2NJ-PURE) or email (members@njpure.com).^[3][4] While 24/7 support isn’t explicitly stated, the availability of a risk management hotline and extensive online resources suggest that assistance is readily available beyond typical business hours.

Pros and Cons of NJ Pure Insurance

Pros

• Competitive Premiums: The direct writing model and not-for-profit structure translate to lower premiums for policyholders.
• Comprehensive Coverage: Policies offer broad coverage options, including valuable supplemental coverages such as CyberGuard and MediGuard.
• Stability and Integrity: The not-for-profit status assures policyholders of financial stability and a commitment to their interests.

Cons

• Transition to The Doctors Company RRG: NJ Pure’s decision to cease operations will transition existing policyholders to The Doctors Company RRG. This change may involve adjustment for some policyholders.^[3][4]
• Limited Geographic Coverage: NJ Pure's services are exclusively available within New Jersey, potentially limiting its appeal to healthcare providers outside of the state.

Conclusion

Summary of the Main Points Covered in the Review

NJ Pure Insurance has been a significant player in the New Jersey medical malpractice insurance market, providing competitive coverage as a not-for-profit, direct-writer. Its focus on cost-effectiveness and stability has benefited many healthcare professionals. However, its planned transition to The Doctors Company RRG represents a significant shift requiring careful consideration by its policyholders.

Recommendations on Who Would Benefit Most from the Company’s Insurance Offerings

Healthcare providers in New Jersey seeking competitive rates, comprehensive coverage, and a stable provider will find NJ Pure’s services beneficial, until the transition to The Doctors Company RRG. However, healthcare professionals outside of New Jersey or those concerned about the transition process will need to explore alternative insurance solutions.

Frequently Asked Questions about NJ Pure Insurance

The following FAQ addresses common concerns regarding NJ Pure’s transition to The Doctors Company RRG and related insurance policies:

1. What does NJ Pure’s decision to exit the market mean to me and my practice? NJ Pure will no longer provide medical professional liability insurance; therefore, policyholders will need to transition their coverage to The Doctors Company RRG or another carrier.^[3][4]
2. What steps has NJ Pure made to help transition my coverage? NJ Pure has partnered with The Doctors Company RRG to facilitate a smooth transition, providing comparable pricing and additional coverages (CyberGuard and MediGuard).^[3][4]
3. Why did NJ Pure select The Doctors Company RRG instead of The Doctors Company? The choice was based on pricing flexibility and financial strength; The Doctors Company RRG provided the necessary rate flexibility while maintaining an "A" (Excellent) AM Best rating.^[4]
4. Does The Doctors Company RRG have reinsurance? Yes, they have a quota share reinsurance agreement with TDCSR (90% risk assumed).^[4]
5. Does The Doctors Company RRG offer group policies? Yes, coverage is available for allied professionals and groups with shared or separate limit options.^[4]
6. Does The Doctors Company RRG offer multi-state policies? Yes, they offer coverage in all 50 states.^[4]
7. What additional coverages are included with a policy from The Doctors Company RRG? CyberGuard and MediGuard are included, with options for deductibles and other features.^[4]
8. Do I need to use a broker or agent to work with The Doctors Company RRG? No, they offer direct policies, similar to NJ Pure.^[4]
9. Does The Doctors Company RRG cover allied professionals? Yes, coverage is available for both groups and individuals.^[4]
10. How do I get a quote from The Doctors Company RRG? NJ Pure has streamlined the process, allowing for quick quotes without new applications or extensive paperwork.^[3][4]
11. What payment plans and options are available through The Doctors Company RRG? Annual, quarterly, and nine-installment options are available, with various payment methods accepted.^[4]
12. Does The Doctors Company RRG offer risk management services? Yes, including a 24/7 hotline and extensive resources.^[4]
13. Where can I go to learn more about The Doctors Company RRG? Visit www.tdcg.com/njpure.^[4]
14. Do I need to take any steps right now? No, you will be contacted by NJ Pure; however, you may contact them directly at 877-2NJ-PURE or members@njpure.com.^[3][4]

Key Takeaways:

• NJ Pure offered competitive medical malpractice insurance in New Jersey.
• Its not-for-profit model and direct-write structure provided cost advantages.
• The transition to The Doctors Company RRG is significant and requires policyholder attention.
• Policyholders should review their options and contact The Doctors Company RRG for details.

References

1. https://www.njpure.com/about.aspx
2. https://www.njpure.com
3. https://www.njpure.com/policyholder.aspx
4. https://njpure.com/downloads/pdfs/Transition-FAQs.pdf