Session Laws

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

The eighth paragraph of section 6 of chapter 362 of the acts of 1975 is hereby amended by adding the following eight sentences:- Effective July first, nineteen hundred and ninety, in addition to the existing single payment plan and three year installment plan for reporting endorsements for claims made policies as approved by the commissioner, the association shall offer only to physicians and surgeons the option of payment for reporting endorsements in annual installments over periods of five years and seven years. The five year and seven year installment plans shall be subject to the following conditions: (1) the total reporting endorsement premium due shall be equal to the reporting endorsement premium due under the single payment plan; (2) the reporting endorsement premium charge shall be payable in equal annual installments, and each installment payment shall include interest on the unpaid reporting endorsement premium at an annual rate equal to the interest rate approved by the commissioner under section five A of chapter one hundred and seventy-five A of the General Laws for discounting pure premium; and (3) the premium charge, interest rate and amount of each annual installment payment shall be those applicable as of the due date of the first installment. The five year installment plan shall be subject to the condition that if an uncured default occurs in payment of any installment of reporting endorsement premium when due, then the insured shall become immediately liable for the entire outstanding balance of the unpaid reporting endorsement premium, and shall also be subject to having his reporting endorsement voided or cancelled for any annual periods for which no installment payment has been made. To the extent that an insured who elects the five year installment plan has paid more premium in installment payments as of the date the reporting endorsement is voided or cancelled due to default than would have been actuarially indicated as of the date the reporting endorsement was first purchased, such excess premium shall be refunded to the insured. The seven year installment plan shall be subject to the following conditions: (1) the insured must purchase an occurrence policy from the association for each of the seven years; and (2) if the insured fails to purchase or renew an occurrence policy in any of the seven years, or if an uncured default occurs in (a) payment of any installment of reporting endorsement premium when due, or (b) payment of premium due on any occurrence policy within the seven year installment payment period, then the insured shall become immediately liable for the entire outstanding balance of the unpaid reporting endorsement premium, and shall also be subject to having his reporting endorsement voided or cancelled. The foregoing three year, five year and seven year plans shall be the exclusive installment plans offered for reporting endorsements by the association. An insured shall elect which if any installment plan he chooses at the time the reporting endorsement is first purchased and shall not be allowed to change plans after said election. Notwithstanding the foregoing, an insured who elects the five year or seven year installment plan may at any time prepay the entire remaining outstanding balance of reporting endorsement premium then due, plus any accrued interest.