Main Line Health, Inc. v. Pennsylvania Medical Professional Liability Catastrophe Loss Fund

Submitted: June 18, 1999 OPINION The Pennsylvania Medical Professional Liability Catastrophe Loss Fund (CAT Fund), John H. Reed, in his capacity as the Director of the CAT Fund (Director), and John H. Reed, M. Diane Koken, Thomas J. Judge, Sr., Joseph Cesare, Joan R. Richards, Howard F. Messer, Charles D. Hummer, Jr., David Zuern, Gary Veshecco, Robert Lohr and Shanin Specter, each in his/her capacity as a member of the CAT Fund Advisory Board (Advisory Board) (collectively, CAT Fund Respondents) have filed a motion for summary relief (Motion) seeking to dismiss as moot Count I of the First Amended Petition of Main Line Health, Inc. (Main Line) and American Excess Insurance Exchange-Risk Retention Group, Inc. (AEIX) (together, Petitioners), filed in this court's original jurisdiction. The Pennsylvania Property and Casualty Insurance Guaranty Association (Association) has filed preliminary objections to Count V of the First Amended Petition. Both filings are now before this court for Disposition. I. First Amended Petition In Count I of the First Amended Petition, Petitioners allege that the Advisory Board has failed to fulfill its obligation under section 706(e)(3) of the Health Care Services Malpractice Act1 (Malpractice Act) to adopt reasonable standards for the prompt investigation and settlement of claims. Thus, Petitioners ask this court to issue a writ of mandamus directing the Advisory Board ""to adopt the reasonable standards identified in 40 P.S. §1301.706(e)(3) À for the prompt investigation and settlement of claims arising under the Health Care Services Malpractice Act."" (First Amended Petition filed 5/20/99, Count I.) In Count V, Petitioners allege that the Association violated section 1803 of The Insurance Company Law of 19213 (Insurance Company Law) by failing to recognize in two cases involving Petitioners that a physician and the professional corporation in which that physician practices are separate and independent insureds and, therefore, are entitled to separate and independent insurance coverage under the Insurance Company Law. Petitioners seek damages against the Association in an amount exceeding $2.4 million, plus interest and costs, and other relief that this court determines to be appropriate and just under the circumstances.