Modified claims made?

[Sniffer]

What is this?

[MountainHawk]

Claims made policies are policies that cover only claims that are reported to the insurer during the policy period, instead of claims from incidents occurring during the policy period.

"Modified" probably means several things depending on the company, but one thing off the top of my head is that the insurer will often exclude from coverage incidents arising from occurences that happened before the writing of the first policy.

[lou]

What is this? I've seen it as code for what are essentially occurence covers. Basically claims made during for the year for claims that happened anytime in the past.

[johnny storm]

MH, aren't you really just pointing out the retro date?

Lou, I agree with your first sentence. I don't understand your second sentence, or if I do, it contradicts your first.

When I have seen modified CM, it's a CM policy where there's some sort of agreement that it's really going to be treated as occurrence. Obviously, not an independent third party transaction, something that's more likely to be done with a captive or a retention group or something.

[lou]

MH, aren't you really just pointing out the retro date?

Lou, I agree with your first sentence. I don't understand your second sentence, or if I do, it contradicts your first.

When I have seen modified CM, it's a CM policy where there's some sort of agreement that it's really going to be treated as occurrence. Obviously, not an independent third party transaction, something that's more likely to be done with a captive or a retention group or something.

I left out the part where free tail cover is offered as well, which then does make it more "occurency" ultimately, I think. Meaning occurences during the year are covered one way or another, either through this year's contract or through the tail cover. Doing this from memory of an account i wrote a couple years back, so a bit foggy.

[MNBridge]

My 2 cents:

It's generally a 'free' DDR cover (endorsement). Tail losses are typically treated as though they were made as of the date the tail kicks in. What ends up happening is you get losses with no 'specific' premium attached. (Unless they actually tack on a premium rate during the contract that is specifically allocated for the tail, I personally have never seen this broken out - seems it would be almost impossible to accurately do.)
Though link from the internet below seems to tell it like it really is and actually admits it's not really 'free'.

From the internet so it must be true :)
A modified occurrence or claims-made with prepaid reporting endorsement combine the best features of both occurrence and claims-made coverages. Coverage is provided for the services rendered during the policy period. The cost of the extended claim reporting endorsement is included in the premium paid each year the policy is in force.

[James Joel]

From the internet so it must be true :)
A modified occurrence or claims-made with prepaid reporting endorsement combine the best features of both occurrence and claims-made coverages. Coverage is provided for the services rendered during the policy period. The cost of the extended claim reporting endorsement is included in the premium paid each year the policy is in force.

And the best part of it, from an insurers point of view, is that they get the premium to cover the tail up front!

MNBridge - could you post the URL for that text?

[Mobile Actuary]

In the world of hospital med mal captives, modified claims-made means that physicians who have left the hospital have tail coverage through the captive, but only as long as the hospital is insured with the captive. (That is, coverage does not extend beyond the hospital's own coverage.)

In the world of domestic med mal insurance companies, there is at least one company where modified claims-made means pre-paid tail. The distinction from occurrence coverage is what policy determines the coverage limits that apply. In particular, I believe the aggregate limit of the final policy applies to the all claims from the claims-made year and the tail.

[MNBridge]

MNBridge - could you post the URL for that text?

Sorry I don't know where it is. I do know I did a google on 'Modified Claims Made' (and maybe a few other key words) to find it.

[James Joel]

MNBridge - could you post the URL for that text?

Sorry I don't know where it is. I do know I did a google on 'Modified Claims Made' (and maybe a few other key words) to find it.

Here it is: http://www.psychprogram.com/Products/group_coverage.htm

Note that the text is about "modified OCCURRENCE" aka "claims made with pre-paid reporting endorsement. The original question was what is "modified CLAIMS-MADE".

Are you saying "modified claims-made" == "modified occurrence"?

[MNBridge]

Are you saying "modified claims-made" == "modified occurrence"?

Yes.

This is one of those areas where I don't think there is a 'standard'. In my personal use I would say "Claims Made with DDR" or "Claims Made with free* tail" or something similar.

[Third Eye]

And, to state the obvious (I hope) -

If you are responsible for the prices or reserves, READ THE POLICY! Or ask someone you trust who has read the policy. Modified claims made has no legal meaning as a phrase by itself, and undoubtedly can mean different things to different companies.