In the 1970s, New Jersey physicians were faced with the first medical malpractice crisis with two of the largest insurers, St. Paul and Argonaut, making plans to withdraw from the state.
It was at this time that James J. Sheeran, the New Jersey Insurance Commissioner (1974-1982), proposed a solution – a not-for-profit reciprocal exchange. Mr. Sheeran's involvement in licensing the state’s first reciprocal exchange in Healthcare Insurance Exchange (HCIE - Princeton Insurance Company's former parent) and Medical Inter-Insurance Exchange (MIIX) ended the crisis of the 1970s.
Since then former Insurance Commissioner James J. Sheeran teamed up with nationally renowned actuarial science expert, Lena Chang, Ph.D. in mathematics, to help solve the auto insurance crisis in New Jersey by creating CURE Auto Insurance, formerly NJ CURE, and used their vision to help end a workers’ compensation crisis in Massachusetts by creating AIM, formerly MEIE.
By 2000, MIIX became a publicly traded company, and Princeton Insurance Company (purchased by MLMIC in 2000) was no longer owned by a reciprocal exchange. Then in 2002, the medical malpractice industry again found itself in the midst of a crisis. As some of the largest insurers were placed into rehabilitation or experienced financial distress, the doctors who relied on them were left to find more reasonable rates or coverage elsewhere.
With over four decades of working toward and providing solutions for some of the most volatile insurance markets, Mr. Sheeran was again approached by several physicians to bring back integrity and stability to the marketplace.
Together with Dr. Chang, Mr. Sheeran created NJ PURE in the fall of 2002 with the same objective as before - to bring long-term vision and integrity to end another insurance crisis.
Our Business Model
NO AGENTS AND BROKERS
As the only direct writer of medical malpractice insurance in New Jersey, NJ PURE eliminates the traditional use of agents or brokers to market its policies. The average commission is 10% for each policy, year after year, costing insurance companies millions of dollars annually. By eliminating the middle man we’ve been able to keep our rates down and provide a direct relationship between you and us.
NO PROFIT MOTIVE
NJ PURE is a not-for-profit reciprocal exchange, which means any profits can only be used to build the surplus level or be returned to policyholders.
LOWEST ATTORNEY-IN-FACT MANAGEMENT FEES
Of each dollar paid for premiums by NJ PURE physicians, 12.5% goes toward paying Reciprocal Attorney-in-Fact, (RAF). This fee is the lowest Attorney-in-Fact fee in New Jersey. NJ PURE consistently makes strides to ensure that our costs remain significantly lower than those of our competition, so more of our policyholders’ premiums are used to pay claims and expenses.
Being a not-for-profit reciprocal exchange has translated into another benefit for our policyholders: the fewest rate increases of any insurer in the state since its inception in 2002.
As of January 2014, NJ PURE is reinsured by Liberty Mutual Group, rated A (Excellent) by A.M. Best Co. This partnership includes a 50% quota share agreement, meaning Liberty Mutual Group assumes 50% of NJ PURE's claim risks. NJ PURE believes in the need to protect the Exchange from catastrophic claims to ensure long-term viability.