| Glossary of Terms |
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ARBITRATION MODEL Arbitration generally takes less time and costs less than litigation. Arbitrators often have a thorough understanding of healthcare issues because they are practicing attorneys or retired judges who specialize in the field. An arbitrator is less likely than a jury to be influenced by a sympathetic plaintiff. Arbitrators are less likely than a jury to award large amounts of money for intangible damages such as "emotional distress." With limited exceptions, arbitration decisions are final and binding. CAPITAL CONTRIBUTION The capital contribution is a low-risk, equity investment in FPIC and is required to maintain Fairway’s surplus. Each policyholder becomes an owner in the company and they share Fairway’s success, without the inherent risk in participating in a mutual insurance company. The cost of this investment is built in to the premium total cost and is displayed on every Fairway indication and quotation. Fairway will charge capital contribution of 30% of the total premium, payable at 10% each year for 3 policy terms. CLAIMS-PAID POLICY A claims-paid policy provides coverage for claims when the claim is paid. Claims-paid policies are offered by insurers that require their insureds (physicians) to become members. Physicians pay annual assessments based on the claims paid that year for the entire membership, not on an individual basis. Physicians share in the profits and the losses of the insurer regardless of personal claims history. In order for coverage to apply, physicians must remain a member of the company until all personal claims are closed. If a claim is reported after the physician has left the insurer, coverage will not apply for any claims-paid policy periods. If a physician wishes to leave the insurer, there must be no open claims and the physician must purchase tail coverage for all claims-paid policy periods for coverage to apply in the future. DEDUCTBILE A portion of covered loss that is not paid by the insurer and that specified amount is the responsibility of the policyholder per claim. ENTITY COVERAGE Entity coverage provides professional liability coverage for a physician’s corporation / professional partnership. In the event of a malpractice lawsuit, the organization can be named in the suit alongside the physician. OCCURRENCE POLICY A policy covering claims that arise out of damage or injury that took place during the policy period, regardless of when claims are made. REINSURANCE Fairway is backed by the multi-billion dollar, A+ rated Lloyds of London Syndicate. Fairway has developed a well established, long lasting partnership with the same reinsurers since Fairway’s inception. Fairway enjoys long term working relationships with their Lloyd Syndicate which includes Faraday, a member of Berkshire Hathaway Insurance Group (A.M. Best Rating: A++ VX) RISK RETENTION GROUP A risk retention group is a liability insurance company owned by its member insureds. As insurance companies owned by their members, some of the key advantages offered by risk retention groups (RRGs) to their members relate to the control members obtain over their liability programs. This control often translates into lower rates, broader coverage, effective loss control/risk management programs, participation by RRG members in favorable loss experience, access to reinsurance markets, and stability of coverage, notwithstanding insurance market cycles. Fairway is regulated by the District of Columbia Department of Insurance, Washington D.C. and is registered with each state in which they are actively writing. STATES Fairway currently issues policies in the following states:
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