Professionals Advocate proudly introduced the Mutual Advantage Plan in 2016. This valuable financial reward program allows ProAd to allocate funds into MAP accounts for participating Doctors, who can then receive distributions of their accounts upon a qualifying event such as retirement.

We are pleased to offer this program in recognition of our Insureds’ commitment to quality health care and to Professionals Advocate. Thousands of ProAd Doctors have already joined since MAP’s introduction in September.

If you are not currently enrolled in the Mutual Advantage Plan, visit proad.com/map or contact your agent/broker for more information.

A LETTER TO OUR INSUREDS

Doctors’ resolute dedication to their profession and their patients allows them to accomplish an extraordinary amount of work. Often a single day can include not only seeing patients, but also performing procedures, maintaining records, reviewing lab results, staying up to date on the latest treatment techniques, keeping abreast of regulatory changes, and managing a practice and office staff. In modern health care, with hundreds of patients and a practice to run, Doctors are called to be experts in health care, health care regulation, business practices and liability law.

At Professionals Advocate, we understand that while caring for patients is the heart of your practice, Doctors have many responsibilities, and you need a professional liability insurer that can keep up with your hectic pace and varied needs. That is why, in addition to our comprehensive and quality professional liability policies, we provide many other valuable coverages and services that allow us to always be with you in every aspect of your practice.

Treating a difficult patient can be made easier with the help of our risk management support, which includes phone access for your immediate questions and educational programs that are available in-person, online and for home study. In the event of a privacy breach of paper or electronic records, our e-dataRESPONSE+ cyber liability coverage can provide valuable protection and assistance. When you must adopt new medical or legal requirements in your practice, our large library of online resources can supply helpful tips and recommendations. You will find a wealth of resources on topics including HIPAA, ICD-10 coding, the HITECH Act, Electronic Medical Records and more. And, most importantly, in the unfortunate event that a malpractice claim is filed against you, our gold-standard claims defense team, composed of top local attorneys and our experienced claims management specialists, is ready to aggressively defend you.

In 2016, we introduced an exciting new benefit that allows ProAd to be with you even as you enter retirement at the end of a long, successful career. The Mutual Advantage Plan is a financial reward program that recognizes your dedication to providing quality health care and your commitment to the long-term success of this company. Upon joining MAP, an account is established in your name that is then made payable upon a qualifying event, such as retirement.

Professionals Advocate is proud to stand behind you in everything you do. We strive to provide the coverages and services you need as you work hard to improve the lives of your patients. No matter how many new demands are placed on you, or how crowded your schedule becomes, you can be confident that our exceptional quality of service and unyielding claims defense is always with you.

Sincerely,

George S. Malouf, Jr., M.D.
George S. Malouf, Jr., M.D.
Chair of the Board
Jeffrey M. Poole, MBA, CPCU
Jeffrey M. Poole, MBA, CPCU
President & Chief Executive Officer

C L A I M S

Our aggressive approach to claims defense makes ProAd one of the area’s most formidable malpractice insurers. We deliver a successful resolution in the majority of claims that go to trial. Our dedicated legal team includes top local attorneys and experienced claims management specialists who provide comprehensive litigation education and support throughout a claim so you never feel alone.

R I S K   M A N A G E M E N T

ProAd provides all the resources you need to manage your liability risk every day, in every patient interaction. We offer live risk management education programs, phone support from our medico-legal experts, and a large library of online materials, including podcasts, articles and ProAd publications. With ProAd, meaningful risk management advice is never more than a call or click away.

C U S T O M E R   S E R V I C E

ProAd’s knowledgeable staff provides friendly and efficient service that fits conveniently in your busy schedule. We take pride in our dedication to personally serve each of our insured Doctors with timely solutions and expert advice, whether you contact us via phone, email or fax. In 2016, 97% of all calls to our customer service team were answered live by our representatives.

A D V O C A C Y

As a Doctor-directed company, we recognize the constant threat of increased liability that Doctors face from new legislation. ProAd remains active in the legislative and judicial arenas in order to give you peace of mind that you can deliver the highest quality medical and dental care to your patients without fear of undue litigation. We fight for tort reform that creates a fair legal environment for Doctors.

C O V E R A G E S

Malpractice litigation is not the only danger that Doctors face. Exposure of electronic or paper records by accident or malicious intent, administrative hearings and disciplinary proceedings are all alarming realities. ProAd offers a collection of coverages, including e-dataRESPONSE+ cyber liability coverage and MedGuard legal defense, to provide protection for every aspect of your practice.

F I N A N C I A L   S T R E N G T H

Claims can arise years or decades after care was given, and you need an insurer who will still be standing behind you. ProAd’s exceptional financial stability and sound management have earned us an “A” (Excellent) rating from A.M. Best, the nation’s most authoritative source of independent insurance ratings. The past, present and future of your practice are secure with ProAd.

A G E N T S & B R O K E R S

ProAd enjoys close relationships with dozens of agents and brokers throughout Virginia, Maryland and D.C. We know your insurance agent is your go-to source for information about your professional liability policy, so we work hard to ensure that your agent always has the latest information on new coverages, policy benefits and services from ProAd.

2 4 / 7   O N L I N E

No matter when you need us, proad.com will be there. We offer a broad array of online resources, including a comprehensive claims portal, online and automatic bill pay, risk management education program registration, up-to-date information on your Mutual Advantage Plan account balance, a security risk assessment, specialized risk management information centers, and more.

FINANCIAL STATEMENTS

BALANCE SHEETS


Professionals Advocate Insurance Company (Statutory Basis) / DECEMBER 31
Admitted Assets
2016 2015
Cash and short-term investments 5,650,655 11,337,944
Long-term invested assets 125,506,540 114,959,381
Other Assets 5,635,032 7,694,113
Total Admitted Assets 136,792,227 133,991,438
Liabilities & Policyholders' Surplus
2016 2015
Reserve for losses and loss adjustment
expenses, net of reinsurance recoverable
11,606,223 11,589,829
Reserve for unearned premiums 7,773,224 7,914,953
Deposits recieved on policies not in force 4,278,682 5,283,199
Ceded reinsurance balances payable 890,784 1,178,266
Other liabilities 3,544,763 5,307,272
Total Liabilities 28,093,676 31,273,519
Total Policyholders' Surplus 108,698,551 102,717,919
Total Liabilities & Policyholders' Surplus 136,792,227 133,991,438

STATEMENTS OF INCOME


Professionals Advocate Insurance Company (Statutory Basis) / YEAR ENDED DECEMBER 31
2016 2015
Premiums earned 5,384,464 5,957,561
Losses and loss adjustment expenses incurred 2,763,634 3,055,586
Underwriting expenses 2,712,034 3,144,959
Net Underwriting Loss (91,204) (242,984)
2016 2015
Net investment income earned and
realized capital gains and losses
4,491,582 3,430,287
Other expense (17) (783)
Income Before Dividends to Poliyholders
and Federal Income Tax
4,400,361 3,186,520
2016 2015
Federal income tax 1,038,502 891,182
Net Income 3,361,859 2,295,338

FINANCIAL NOTES

ORGANIZATION

Professionals Advocate Insurance Company is a wholly owned subsidiary of Medical Mutual Liability Insurance Society of Maryland.

BASIS OF PRESENTATION

The accompanying condensed financial statements of Professionals Advocate Insurance Company have been prepared in conformity with accounting practices prescribed or permitted by the Maryland Insurance Administration. The Maryland Insurance Administration requires insurance companies domiciled in Maryland to prepare their statutory basis financial statements in accordance with the National Association of Insurance Commissioners (NAIC) Accounting Practices and Procedures Manual. The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known which could impact the amounts reported and disclosed herein.

SIGNIFICANT ACCOUNTING POLICIES

INVESTMENTS

Investments in bonds are reported at the lower of amortized cost or fair value based on their NAIC rating. Investments in common stocks are stated at fair value. Short-term investments, consisting primarily of Government Money Market Funds and Government Agency Discount Notes, are carried at cost which approximates market value.

LOSSES AND LOSS ADJUSTMENT EXPENSES

The reserves for losses and related loss adjustment expenses are estimated from actuarial analyses. These reserves include estimates of future trends in claim severity, claim frequency and other factors, which could vary as the losses are ultimately settled. Although the degree of variability inherent in such estimates can be significant, management believes that the reserves for the losses and related loss adjustment expenses reflect its best estimate of the amounts to be paid. The estimates are continually reviewed and, as adjustments to the reserves become necessary, such adjustments are reflected in current operations.

PREMIUM REVENUE

Premiums are recognized as revenue over the term of the policies. The primary source of premium revenue is derived from professional liability insurance for health care providers.

UNEARNED PREMIUM

The reserve for unearned premium primarily consists of the pro-rata portion of premium for the remainder of the policy term as well as the provision for waiver of premium for extended reporting period endorsements on certain claims-made policies.

REINSURANCE

Professionals Advocate Insurance Company has entered into reinsurance agreements with various unaffiliated reinsurers in order to reduce its ultimate claims risk. In addition to external reinsurance, intercompany reinsurance agreements are in place between the two insurance companies to spread risk and exposure across the larger financial base.

AUDITED FINANCIAL STATEMENTS

The 2016 and 2015 condensed financial statements of Professionals Advocate have been prepared in conformity with accounting practices prescribed or permitted by the Maryland Insurance Administration. The condensed financial statements have been derived from complete statutory-basis financial statements, which were audited by our independent auditors. A complete set of audited financial statements may be obtained upon request.

BOARD | OFFICERS | COMMITTEES

BOARD

George S. Malouf, Jr., M.D., FACS

Chair of the Board, Physician in Comprehensive Ophthalmology in Montgomery and Prince George’s Counties, MD

Jeffrey M. Poole, MBA, CPCU

President and Chief Executive Officer, Professionals Advocate Insurance Company

DAVID A. ELLINGTON, M.D., FAAFP

Family Physician in Lexington, Virginia

KAREN H. KLOCKO, D.D.S.

Dentist in Gambrills, Maryland

MARTIN A. LEVIN, D.D.S.

Periodontist in Baltimore, Maryland

JOHN W. MCCULLOUGH, CPA

Retired Partner with the international accounting firm of Ernst & Young, LLP

DONALD M. SWITZ, M.D.

Retired Gastroenterologist and Emeritus Professor of Medicine at The Medical College of Virginia in Richmond, Virginia

RICHARD A. WALKER, CPCU

Retired Senior Vice President – Marketing, Professionals Advocate Insurance Company

ELIZABETH H. WATTS, M.D.

Pediatrician in Vienna, Virginia

OFFICERS

GEORGE S. MALOUF, JR., M.D., FACS

Chair of the Board

JEFFREY M. POOLE

President and Chief Executive Officer

MARY LURA DUVALL

Senior Vice President, Chief Financial Officer and Treasurer

KEITH P. ALLEN

Senior Vice President – Actuary

CHERYL F. MATRICCIANI

Senior Vice President – Underwriting Operations, General Counsel and Secretary

BETH A. ATWELL

Vice President – Claims Operations

JOHN H. CLIFTON

Vice President – Claims

JOHN R. FRANKLIN

Vice President – Communications

STEVEN P. KEULER

Vice President – Controller, Assistant Treasurer

BENJAMIN C. ROHM

Vice President – Underwriting

ELIZABETH A. SVOYSKY

Vice President – Risk Management

NATALIE A. ROBERTS

Assistant Vice President – Accounting, Assistant Controller

COMMITTEES

AUDIT COMMITTEE

John W. McCullough, Chair
George S. Malouf, Jr., M.D., ex officio
Jeffrey M. Poole, ex officio

CLAIMS COMMITTEE

Donald M. Switz, M.D., Chair
David A. Ellington, M.D.
Kent R. Folsom, M.D.
Michael H. Goldman, M.D.
Jeffrey L. Henke, M.D.
William C. Reha, M.D.
Carol S. Shapiro, M.D.
Richard A. Szucs, M.D.
David T. Waddell, M.D.
George S. Malouf, Jr., M.D., ex officio
Jeffrey M. Poole, ex officio

EXECUTIVE COMMITTEE

George S. Malouf, Jr., M.D., Chair
David A. Ellington, M.D.
Jeffrey M. Poole

FINANCE AND BUDGET COMMITTEE

David Ellington, M.D., Chair
Martin A. Levin, D.D.S.
John W. McCullough
George S. Malouf, Jr., M.D., ex officio
Jeffrey M. Poole, ex officio

INDEPENDENT AUDITORS

Ernst & Young LLP, Baltimore, Maryland

ABOUT PROAD

CONSTANT PROTECTION AND 24/7 SERVICES

Professionals Advocate was built to always be with you. As a subsidiary of MEDICAL MUTUAL, one of the nation’s oldest Doctor-owned and directed companies, ProAd understands the unique needs of Doctors. Our Board of Directors includes Physicians and Dentists who represent your interests and ensure this company is continually crafted around you, our insured Doctors. You can depend on us to provide innovative and affordable professional liability insurance solutions, industry-leading claims defense, personalized customer service and comprehensive risk management education programs.

A.M. BEST RATING UPGRADE

A.M. Best, the nation’s leading independent insurance rating agency, has recently changed ProAd’s rating from an “A-” to an “A”. This upgrade comes in recognition of our strong financials, our enterprise risk management program, and our superior claims defense.

HOME OFFICE

225 International Circle
Box 8016
Hunt Valley, Maryland 21030
410-785-0050
toll free 800-492-0193

VIRGINIA OFFICE

804 Moorefield Park Drive
Suite 105
Richmond, Virginia 23236
804-320-6790
toll free 888-411-0444
toll free 866-579-1948

Complete corporate information is available on our web site at: PROAD.COM

NEW TO PROFESSIONALS ADVOCATE IN 2016

The Mutual Advantage Plan

This exciting financial reward program was created as a valuable new benefit for our Insureds. Participants can receive a distribution upon a qualifying event such as retirement.

A New Definition of Retirement

We modified our definition of retirement to make it easier for retired Doctors to perform volunteer medical services and serve as locum tenens without the need to purchase additional policies.

Timely Risk Management Programs

More than 2,000 Doctors took advantage of our 2016 Risk Management education programs, which included timely topics on opioid prescribing, diagnostic error, identifying abuse, and more.

A Monthly EMR Blog

This comprehensive blog makes it easier to navigate the complexities of Electronic Medical Records by providing insights and resources that can help you select, implement and maintain an EMR System.

Redesigned Doctors RX Newsletter

Our informative Doctors RX Newsletter has a new reader-friendly design! This full-color publication presents information on relevant topics and provides readers with the chance to earn a CME credit.

An Automatic Credit Card Payment Plan

Never miss a payment on your professional liability policy again! Sign up for our automatic credit card payment plan to have your premium automatically charged to your card quarterly.