History and Purpose
Although most commonly referred to as the JUA, the official name is the Texas Medical Liability Insurance Underwriting Association.
The JUA was created by law in 1975 to provide a mechanism for health care professionals to obtain professional liability during times when the voluntary marketplace is not adequately serving their needs. The legislature added general liability insurance to the JUA’s authority in 2003.
Insurance Company Participation
All insurance companies writing certain kinds of liability insurance in the state of Texas are required by law to participate in the JUA to assure its financial stability.
When an applicant qualifies for coverage through the JUA, the JUA assigns the account to a servicing carrier. The JUA contracts with one or more of its members on an annual basis to act as servicing carriers to perform all policy functions, including underwriting, policy issuance, premium accounting, settlement of claims, and any regulatory or other reporting that may be required.
Where the Money Comes From
Policyholders pay premiums to the JUA and losses are reimbursed to the servicing carriers by the JUA.
Any deficits sustained by the JUA can be recouped by one or more of the following procedures in sequence.
First, through a Policyholders Stabilization Reserve Fund, which is funded by an additional charge paid each year by every policyholder.
Second, by assessing policyholders who held policies in force at any time within the two most recently completed calendar years in which the JUA was issuing policies preceding the date on which the assessment is levied. No policyholder may be assessed for an amount exceeding 100% of the premium paid for the latest policy held within the assessment period.
Third, by assessing members of the JUA, but not exceeding 1% of their policyholders’ surplus. Amounts assessed to members can be recouped through premium tax credits over a period of five years.