The Doctors Company (TDC), a California-based medical malpractice insurance company, has secured approval from the US Department of Financial Services (DFS) for its acquisition of Hospitals Insurance Company (HIC) for $638m (£500.81m).
Hospitals Insurance Company is being bought by TDC from Maimonides Health Resources, Montefiore Medicine Academic Health System, and Mount Sinai Health System.
TDC, which is the largest physician-owned medical malpractice insurance company in the US, will also acquire the assets and liabilities of HIC’s current manager – FOJP Service, from the sellers for $12m (£9.42m).
The deals were announced in November 2018.
The sale of Hospitals Insurance Company is expected to help the sellers financially consolidate their hospital systems to meet the health care requirements of their communities.
For TDC, the acquisition is said to be in line with state policymakers’ aim of expanding competition among medical malpractice insurers in New York State, while staying under the full authority of the DFS.
DFS acting financial services superintendent Linda Lacewell said: “Taking into consideration the importance and current status of New York’s medical malpractice market, DFS carefully reviewed this acquisition to protect HIC policyholders.
“The measured expansion of competition in the medical malpractice market by a DFS-regulated insurer is positive for doctors, and ultimately good for consumers.”
Hospitals Insurance Company is a New York State admitted and licensed insurance company which has offices in New York City and White Plains. The company offers insurance coverage and services to hospitals, physicians, healthcare professionals, long-term care facilities, and agencies across New York State.
Apart from providing insurance coverage for professional and general liability, Hospitals Insurance Company offers risk management services to hospitals and physicians.
TDC, which was founded in 1976, is a California-domiciled insurer authorised in New York. The company’s insurance service subsidiaries offer a range of additional insurance products and services.
TDC chairman and CEO Richard Anderson said: “We are pleased the New York Department of Financial Services has given final approval for this important transaction.
“This enables us to deliver on our commitment to New York physicians and hospitals to provide expanded coverage options from a strong admitted carrier, and to build a mission-based platform to serve the medical professions.”
The transaction is expected to be closed by the end of July 2019.