Important MLMIC Update: NYS Approves Sale
Under the proposed sale of the Medical Liability Mutual Insurance Company (“MLMIC”) to Berkshire Hathaway, MLMIC policyholders for any time during the period July 15, 2013 through July 14, 2016 are eligible to receive a cash payout, estimated to be approximately 1.9 times the amount of premiums paid during this period.
On August 23, 2018, the New York State Department of Financial Services (“DFS”) held a public hearing to consider the proposed sale, and on September 6, 2018 the DFS issued its Decision approving the MLMIC sale. This Decision is a major milestone in the sale process, and clears the way for the next major milestone, the September 14, 2018 special meeting for policyholders to vote on the sale.
The Decision addresses disputes over cash payouts and the objection process:
- The DFS rejected a request that the parties to receive the payouts be changed or that payouts be allocated among interested parties.
- The DFS determined that under the NYS Insurance Law, the payouts must be paid to the eligible policyholders.
- The DFS clarified that the objection procedure created by MLMIC is available only for those parties designated in a policy as the policy administrator. In the event of such an objection, the cash payout will be paid into escrow pending resolution of the dispute. This does not preclude other parties from asserting claims to proceeds outside of the established objection process.
- The DFS noted that the objection and escrow process is meant to allow parties a reasonable time to resolve their disputes, and stressed that “the determination of who is entitled to the cash consideration depends on the facts and circumstances of the parties’ relationship and applicable law, to be decided by agreement of the parties or by an arbitrator or court.”
- The DFS has requested that MLMIC designate a dispute resolution specialist to assist parties in resolving disputes.
- Finally, the DFS noted: “Importantly, the Objection Procedure does not, in any way, impact any person’s right to resolve their dispute in any forum of their choosing or as required by contract or law.”
The full DFS Decision can be viewed on the following link:
Nolan & Heller, LLP has been retained by healthcare professionals to assist them in protecting their rights where their employers (or former employers) have objected, or may object, to payment of MLMIC sale proceeds directly to the policyholder. If you are a healthcare professional covered through MLMIC during the applicable period, and have concerns over your right to receive sale proceeds and/or your employer’s or former employer’s possible claim to the payment, please feel free to contact us to discuss your rights and how we may be of assistance to you. Please contact Justin A. Heller, Esq. at firstname.lastname@example.org or Alexandra B. Becker, Esq. at email@example.com, or call us at (518) 449-3300
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