About NORCAL

History

NORCAL Mutual's Rich History

In the early 1970s, the frequency and severity of medical malpractice claims exploded. Faced with skyrocketing premiums, lack of available coverage and the prospect of widespread practice closures, physicians sought reform of the entire medical liability tort system to ensure that the crisis would abate and, hopefully, never return.

For California physicians, a solution came in 1975 when a special session of the California Legislature led to the enactment of the Medical Injury Compensation Reform Act of 1975 (MICRA), California's landmark tort reform legislation. Among other important provisions, MICRA placed a reasonable and fair cap of $250,000 on noneconomic damages (i.e., pain and suffering) and limited plaintiff attorneys' contingency fees, ensuring that the bulk of malpractice awards would go to plaintiffs rather than attorneys.

Also in 1975, in the same spirit of physician advocacy that led to the passage of MICRA, Northern California physicians banded together at the county medical society level to form NORCAL Mutual Insurance Company—a new kind of policyholder-owned medical professional liability insurance company. Our founding members had one overarching vision for the company: to insure and defend our policyholders against nonmeritorious claims while delivering the utmost in customer service and financial strength.

From our inception, NORCAL Mutual's ties to the medical community and to the cause of tort reform have been absolute. To this day, we retain our singular commitment to improving the practice environment for our more than 20,000 physicians, medical groups, clinics, hospitals and ancillary healthcare facilities insured in California, Alaska and Rhode Island.

Milestones

• NORCAL Mutual Insurance Company was incorporated on September 18, 1975, and began issuing medical professional liability policies on November 1. By the end of the year, NORCAL Mutual served 2,800 policyholders in four rating classes.
• In 1979, after four years of business, NORCAL Mutual became the first medical professional liability insurance company in California to initiate the return of capital contributions to policyholders. Over the years, we have declared more than $400 million in dividends—a record unsurpassed by any other U.S. medical professional liability insurer.
• In 1984, we received our first "A+" rating from A.M. Best. We have maintained an "A" or better rating every year since then.
• In 1985, spurred on by a decade of achievement, NORCAL Mutual began to offer medical professional liability insurance throughout California.
• In the early to mid-1990s, NORCAL Mutual began to grow and expand, and we opened our Pasadena regional office in 1990.
• In 1991, we acquired the assets and liabilities of the Medical Indemnity Corporation of Alaska, which led to the opening of our Alaska regional office in Anchorage.
• In 1994, NORCAL Mutual acquired a portion of Premiere Alliance Insurance Company’s business, leading to the opening of our Rhode Island regional office in Providence.
• In 1997, NORCAL Mutual assumed the book of business of the Clinic Mutual Insurance Company (CMIC), a clinic-owned medical liability insurance company with roughly 120 community healthcare clinics in California and other Western states. Serving the unique needs of community clinics, our Clinic Purchasing Group (CPG) program has grown to approximately 230 clinics.
• In 1998, NORCAL Mutual acquired PMSLIC Insurance Company. Based in Mechanicsburg, PA, and operating in Pennsylvania and Delaware, PMSLIC is a physician-directed liability carrier that was formed by the Pennsylvania Medical Society. The company began issuing policies in 1978. Like NORCAL Mutual, it is strong and stable, with an "A" (Excellent) rating from A.M. Best.
• In 2003, NORCAL Mutual's Risk Management Department achieved a six-year "Accreditation with Commendation" from the Accreditation Council for Continuing Medical Education (ACCME). The six-year accreditation was renewed in 2009. Very few insurer/CME providers have earned this level of accreditation.
• In 2004, NORCAL Mutual launched MICRA political action committees (PACs) in three states and at the federal level, allowing policyholders and employees to actively engage in the battle for tort reform. The MICRA PACs in California and Rhode Island, and at the federal level, continue to operate and advocate for responsible reform.
• In 2008, NORCAL Mutual and PMSLIC, its wholly owned subsidiary, began integrating as the NORCAL Group to improve administrative efficiency and offer maximum value for the premium dollar.
• In 2009, NORCAL Mutual and PMSLIC continued integration and began operating as the NORCAL Group by reorganizing their boards of directors, establishing a common executive leadership team, and combining such operational functions as risk management, human resources, claims and finance.