MISSISSIPPI LEGISLATURE
2002 3rd Extraordinary Session
To: Select Committee on Civil Justice Reform
By: Representative Watson
AN ACT TO CREATE NEW SECTION 11-11-4, MISSISSIPPI CODE OF 1972, TO REVISE VENUE FOR MEDICAL MALPRACTICE ACTIONS; TO CREATE NEW SECTION 11-1-62, MISSISSIPPI CODE OF 1972, TO PROVIDE INDEMNITY TO PHYSICIANS WHO PRESCRIBE AND PHARMACISTS WHO DISPENSE PRESCRIPTIONS OF FDA APPROVED DRUGS; TO AMEND SECTION 73-25-33, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF "PRACTICE OF MEDICINE"; TO PROVIDE IMMUNITY FROM LIABILITY TO PHYSICIANS AND NURSE PRACTITIONERS WHO PROVIDE HEALTH SERVICES AT SCHOOLS, AND TO PHYSICIANS WHO RENDER MEDICAL SERVICE UNDER A SPECIAL VOLUNTEER MEDICAL LICENSE, ON A CHARITABLE BASIS; TO AMEND SECTION 85-5-7, MISSISSIPPI CODE OF 1972, TO CONFORM THE GENERAL JOINT AND SEVERAL LIABILITY STATUTE TO NEWLY CREATED SECTION 11-46-14, MISSISSIPPI CODE OF 1972; TO AMEND SECTION 43-11-1, MISSISSIPPI CODE OF 1972, TO DEFINE MEDICAL RECORDS MADE OR MAINTAINED IN INSTITUTIONS FOR THE AGED OR INFIRM; TO CREATE NEW SECTION 43-11-16, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR CONFIDENTIALITY OF MEDICAL RECORDS MADE OR MAINTAINED IN INSTITUTIONS FOR THE AGED OR INFIRM, AND TO REQUIRE 90-DAY'S NOTICE OF INTENTION TO SUE; TO AMEND SECTION 15-1-36, MISSISSIPPI CODE OF 1972, TO REVISE THE STATUTE OF LIMITATIONS APPLICABLE TO CLAIMS AGAINST NURSING FACILITIES; TO CREATE NEW SECTION 11-46-14, MISSISSIPPI CODE OF 1972, TO LIMIT JOINT AND SEVERAL LIABILITY UNDER THE TORT CLAIMS ACT WHEN A PHYSICIAN IS A JOINT TORT-FEASOR; TO AMEND SECTION 11-46-1, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF "EMPLOYEE" UNDER THE TORT CLAIMS ACT; TO CREATE NEW SECTION 41-105-1, MISSISSIPPI CODE OF 1972, TO ENACT A SHORT TITLE FOR THE MISSISSIPPI CARE ACCESS AND RELIABILITY ENHANCEMENT (CARE) ACT; TO CREATE NEW SECTION 41-105-3, MISSISSIPPI CODE OF 1972, TO MAKE LEGISLATIVE FINDINGS; TO CREATE NEW SECTION 41-105-5, MISSISSIPPI CODE OF 1972, TO SPECIFY THE PURPOSE AND SCOPE OF THE MISSISSIPPI CARE ACT; TO CREATE NEW SECTION 41-105-7, MISSISSIPPI CODE OF 1972, TO ENACT DEFINITIONS; TO CREATE NEW SECTION 41-105-9, MISSISSIPPI CODE OF 1972, TO CREATE THE MISSISSIPPI CARE AUTHORITY AND BOARD OF DIRECTORS; TO CREATE NEW SECTION 41-105-11, MISSISSIPPI CODE OF 1972, TO SPECIFY THE POWERS AND DUTIES OF THE AUTHORITY; TO CREATE NEW SECTION 41-105-13, MISSISSIPPI CODE OF 1972, TO INDEMNIFY THE CARE BOARD AND ITS EMPLOYEES FROM LIABILITY; TO CREATE NEW SECTION 41-105-15, MISSISSIPPI CODE OF 1972, TO SPECIFY THE QUALIFICATIONS OF PARTICIPATING HEALTHCARE PROVIDERS; TO CREATE NEW SECTION 41-105-17, MISSISSIPPI CODE OF 1972, TO SPECIFY REQUIREMENTS TO ESTABLISH FINANCIAL RESPONSIBILITY OF A PARTICIPATING HEALTHCARE PROVIDER; TO CREATE NEW SECTION 41-105-19, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE EXCLUSIVENESS OF THE REMEDIES AFFORDED BY THE MISSISSIPPI CARE ACT; TO CREATE NEW SECTION 41-105-21, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR FUNDING OF THE AUTHORITY; TO BRING FORWARD SECTIONS 83-47-1, 83-47-3, 83-47-5, 83-47-7, 83-47-9, 83-47-11, 83-47-13, 83-47-15, 83-47-17, 83-47-19, 83-47-21, 83-47-23 AND 83-47-25, MISSISSIPPI CODE OF 1972, WHICH PROVIDES FOR FORMATION AND OPERATION OF NONPROFIT MEDICAL LIABILITY INSURANCE CORPORATIONS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The following shall be codified as Section 11-11-4, Mississippi Code of 1972:
11-11-4. (1) Any action against a licensed physician for injuries or death arising out of the course of medical, surgical or other professional services shall be brought in the county in which the act or omission giving rise to the cause of action occurred except in the case of multiple defendants as hereinafter provided.
(2) Notwithstanding any other provision, the venue of any consolidated action brought pursuant to Miss.R.Civ.P.20 in which a licensed physician is a defendant may be transferred to any other judicial district where venue would be proper which has more significant relationships to the cause of action and the parties than the forum venue.
SECTION 2. The following shall be codified as Section 11-1-62, Mississippi Code of 1972:
11-1-62. (1) In any civil action alleging damages caused by a prescription drug and absent any negligence on the part of the physician or other licensed professional who prescribes drugs, a physician or other licensed professional who prescribes drugs shall be indemnified by the manufacturer of the prescription drug for any damages if the federal Food and Drug Administration (FDA) has approved that drug for treatment of the condition, disease or illness for which the drug was prescribed.
(2) In any civil action alleging damages caused by a prescription drug and absent any negligence on the part of the pharmacist, a pharmacist who dispenses a prescription shall be indemnified by the manufacturer of the prescription drug if the federal Food and Drug Administration (FDA) has approved that drug.
SECTION 3. Section 73-25-33, Mississippi Code of 1972, is amended as follows:
73-25-33. The practice of medicine shall mean to suggest, recommend, prescribe, or direct for the use of any person, any drug, medicine, appliance, or other agency, whether material or not material, for the cure, relief, or palliation of any ailment or disease of the mind or body, or for the cure or relief of any wound or fracture or other bodily injury or deformity, or the practice of obstetrics or midwifery, after having received, or with the intent of receiving therefor, either directly or indirectly, any bonus, gift, profit or compensation; provided, that nothing in this section shall apply to females engaged solely in the practice of midwifery. Notwithstanding any contrary provision of this section, the act of prescribing any drug or medicine shall constitute a sale under Mississippi law.
SECTION 4. (1) Any licensed physician or certified nurse practitioner who voluntarily provides needed medical or health services to any program at an accredited school in the state without the expectation of payment due to the inability of such person to pay for said services shall be immune from liability for any civil action arising out of the provision of such medical or health services provided in good faith on a charitable basis. This section shall not extend immunity to acts of willful or gross negligence. Except in cases of rendering emergency care wherein the provisions of Section 73-25-37, Mississippi Code of 1972, apply, immunity under this section shall be extended only if the physician or certified nurse practitioner and patient execute a written waiver in advance of the rendering of such medical services specifying that such services are provided without the expectation of payment and that the licensed physician or certified nurse practitioner shall be immune as provided herein.
(2) Any physician who voluntarily renders any medical service under a special volunteer medical license authorized under Section 73-25-18 without any payment or compensation or the expectation or promise of any payment or compensation shall be immune from liability for any civil action arising out of any act or omission resulting from the rendering of the medical service unless the act or omission was the result of the physician's gross negligence or willful misconduct. In order for the immunity under this subsection to apply, there must be a written or oral agreement for the physician to provide a voluntary noncompensated medical service before the rendering of the service by the physician.
SECTION 5. Section 85-5-7, Mississippi Code of 1972, is amended as follows:
85-5-7. (1) As used in this section "fault" means an act or omission of a person which is a proximate cause of injury or death to another person or persons, damages to property, tangible or intangible, or economic injury, including, but not limited to, negligence, malpractice, strict liability, absolute liability or failure to warn. "Fault" shall not include any tort which results from an act or omission committed with a specific wrongful intent.
(2) Except as may be otherwise provided in subsection (6) of this section, in any civil action based on fault, the liability for damages caused by two (2) or more persons shall be joint and several only to the extent necessary for the person suffering injury, death or loss to recover fifty percent (50%) of his recoverable damages, except as the liability for damages caused by any persons covered under the provisions of Section 11-46-1 et seq. shall be limited to such persons own percentage of fault.
(3) Except as otherwise provided in subsections (2) and (6) of this section, in any civil action based on fault, the liability for damages caused by two (2) or more persons shall be several only, and not joint and several and a joint tort-feasor shall be liable only for the amount of damages allocated to him in direct proportion to his percentage of fault. In assessing percentages of fault, an employer and the employer's employee or a principal and the principal's agent shall be considered as one (1) defendant when the liability of such employer or principal has been caused by the wrongful or negligent act or omission of the employee or agent.
(4) Any defendant held jointly liable under this section shall have a right of contribution against fellow joint tort-feasors. A defendant shall be held responsible for contribution to other joint tort-feasors only for the percentage of fault assessed to such defendant.
(5) Nothing in this section shall eliminate or diminish any defenses or immunities which currently exist, except as expressly noted herein.
(6) Joint and several liability shall be imposed on all who consciously and deliberately pursue a common plan or design to commit a tortious act, or actively take part in it. Any person held jointly and severally liable under this section shall have a right of contribution from his fellow defendants acting in concert.
(7) In actions involving joint tort-feasors, the trier of fact shall determine the percentage of fault for each party alleged to be at fault.
(8) Nothing in this section shall be construed to create a cause of action. Nothing in this section shall be construed, in any way, to alter the immunity of any person.
SECTION 6. Section 43-11-1, Mississippi Code of 1972, is amended as follows:
43-11-1. When used in this chapter, the following words shall have the following meaning:
(a) "Institutions for the aged or infirm" means a place either governmental or private which provides group living arrangements for four (4) or more persons who are unrelated to the operator and who are being provided food, shelter and personal care whether any such place be organized or operated for profit or not. The term "institution for aged or infirm" includes nursing homes, pediatric skilled nursing facilities, psychiatric residential treatment facilities, convalescent homes and homes for the aged, provided that these institutions fall within the scope of the definitions set forth above. The term "institution for the aged or infirm" does not include hospitals, clinics or mental institutions devoted primarily to providing medical service.
(b) "Person" means any individual, firm, partnership, corporation, company, association or joint stock association, or any licensee herein or the legal successor thereof.
(c) "Personal care" means assistance rendered by personnel of the home to aged or infirm residents in performing one or more of the activities of daily living, which includes, but is not limited to, the bathing, walking, excretory functions, feeding, personal grooming and dressing of such residents.
(d) "Psychiatric residential treatment facility" means any nonhospital establishment with permanent facilities which provides a 24-hour program of care by qualified therapists including, but not limited to, duly licensed mental health professionals, psychiatrists, psychologists, psychotherapists and licensed certified social workers, for emotionally disturbed children and adolescents referred to such facility by a court, local school district or by the Department of Human Services, who are not in an acute phase of illness requiring the services of a psychiatric hospital, and are in need of such restorative treatment services. For purposes of this paragraph, the term "emotionally disturbed" means a condition exhibiting one or more of the following characteristics over a long period of time and to a marked degree, which adversely affects educational performance:
1. An inability to learn which cannot be explained by intellectual, sensory or health factors;
2. An inability to build or maintain satisfactory relationships with peers and teachers;
3. Inappropriate types of behavior or feelings under normal circumstances;
4. A general pervasive mood of unhappiness or depression; or
5. A tendency to develop physical symptoms or fears associated with personal or school problems. An establishment furnishing primarily domiciliary care is not within this definition.
(e) "Pediatric skilled nursing facility" means an institution or a distinct part of an institution that is primarily engaged in providing to inpatients skilled nursing care and related services for persons under twenty-one (21) years of age who require medical or nursing care or rehabilitation services for the rehabilitation of injured, disabled or sick persons.
(f) "Licensing agency" means the State Department of Health.
(g) "Medical records" means, without restriction, those medical histories, records, reports, summaries, diagnoses and prognoses, records of treatment and medication ordered and given, notes, entries, x-rays and other written or graphic data prepared, kept, made or maintained in institutions for the aged or infirm that pertain to residency in, or services rendered to residents of, an institution for the aged or infirm.
SECTION 7. The following shall be codified as Section 43-11-16, Mississippi Code of 1972:
43-11-16. Medical records are and shall remain the property of the various institutions for the aged and infirm, subject however to reasonable access to the information contained therein upon good cause shown by the resident, his personal representatives or heirs, his attending medical personnel and his duly authorized nominees, and upon payment of any reasonable charges for such service. Nothing in this section shall be construed to deny access to medical records by the licensing agency in the discharge of its official duties under this chapter. Except as otherwise provided by law, medical records shall not constitute public records and nothing in this section shall be deemed to impair any privilege of confidence conferred by law or the Mississippi Rules of Evidence on residents, their personal representatives or heirs by Section 13-1-21.
SECTION 8. Section 15-1-36, Mississippi Code of 1972, is amended as follows:
15-1-36. (1) For any claim accruing on or before June 30, 1998, and except as otherwise provided in this section, no claim in tort may be brought against a licensed physician, osteopath, dentist, hospital, nursing facility, nurse, pharmacist, podiatrist, optometrist or chiropractor for injuries or wrongful death arising out of the course of medical, surgical or other professional services unless it is filed within two (2) years from the date the alleged act, omission or neglect shall or with reasonable diligence might have been first known or discovered.
(2) For any claim accruing on or after July 1, 1998, and except as otherwise provided in this section, no claim in tort may be brought against a licensed physician, osteopath, dentist, hospital, nursing facility, nurse, pharmacist, podiatrist, optometrist or chiropractor for injuries or wrongful death arising out of the course of medical, surgical or other professional services unless it is filed within two (2) years from the date the alleged act, omission or neglect shall or with reasonable diligence might have been first known or discovered, and, except as described in paragraphs (a) and (b) of this subsection, in no event more than seven (7) years after the alleged act, omission or neglect occurred:
(a) In the event a foreign object introduced during a surgical or medical procedure has been left in a patient's body, the cause of action shall be deemed to have first accrued at, and not before, the time at which the foreign object is, or with reasonable diligence should have been, first known or discovered to be in the patient's body.
(b) In the event the cause of action shall have been fraudulently concealed from the knowledge of the person entitled thereto, the cause of action shall be deemed to have first accrued at, and not before, the time at which such fraud shall be, or with reasonable diligence should have been, first known or discovered.
(3) Except as otherwise provided in subsection (4) of this section, if at the time at which the cause of action shall or with reasonable diligence might have been first known or discovered, the person to whom such claim has accrued shall be six (6) years of age or younger, then such minor or the person claiming through such minor may, notwithstanding that the period of time limited pursuant to subsections (1) and (2) of this section shall have expired, commence action on such claim at any time within two (2) years next after the time at which the minor shall have reached his sixth birthday, or shall have died, whichever shall have first occurred.
(4) If at the time at which the cause of action shall or with reasonable diligence might have been first known or discovered, the person to whom such claim has accrued shall be a minor without a parent or legal guardian, then such minor or the person claiming through such minor may, notwithstanding that the period of time limited pursuant to subsections (1) and (2) of this section shall have expired, commence action on such claim at any time within two (2) years next after the time at which the minor shall have a parent or legal guardian or shall have died, whichever shall have first occurred; provided, however, that in no event shall the period of limitation begin to run prior to such minor's sixth birthday unless such minor shall have died.
(5) If at the time at which the cause of action shall or with reasonable diligence might have been first known or discovered, the person to whom such claim has accrued shall be under the disability of unsoundness of mind, then such person or the person claiming through him may, notwithstanding that the period of time hereinbefore limited shall have expired, commence action on such claim at any time within two (2) years next after the time at which the person to whom the right shall have first accrued shall have ceased to be under the disability, or shall have died, whichever shall have first occurred.
(6) When any person who shall be under the disabilities mentioned in subsections (3), (4) and (5) of this section at the time at which his right shall have first accrued, shall depart this life without having ceased to be under such disability, no time shall be allowed by reason of the disability of such person to commence action on the claim of such person beyond the period prescribed under Section 15-1-55, Mississippi Code of 1972.
(7) For the purposes of subsection (3) of this section, and only for the purposes of such subsection, the disability of infancy or minority shall be removed from and after a person has reached his sixth birthday.
(8) For the purposes of subsection (4) of this section, and only for the purposes of such subsection, the disability of infancy or minority shall be removed from and after a person has reached his sixth birthday or from and after such person shall have a parent or legal guardian, whichever occurs later, unless such disability is otherwise removed by law.
(9) The limitation established by this section as to a licensed physician, osteopath, dentist, hospital or nurse shall apply only to actions the cause of which accrued on or after July 1, 1976.
(10) The limitation established by this section as to pharmacists shall apply only to actions the cause of which accrued on or after July 1, 1978.
(11) The limitation established by this section as to podiatrists shall apply only to actions the cause of which accrued on or after July 1, 1979.
(12) The limitation established by this section as to optometrists and chiropractors shall apply only to actions the cause of which accrued on or after July 1, 1983.
(13) The limitation established by this section as to actions commenced on behalf of minors shall apply only to actions the cause of which accrued on or after July 1, 1989.
(14) The limitation established by this section as to nursing facilities shall apply only to actions the cause of which accrued after the passage of House Bill No. ____, Third Extraordinary Session of 2002.
(15) No action based upon the healthcare provider's professional negligence may be begun unless the defendant has been given at least ninety (90) days' prior notice of the intention to begin the action. No particular form of notice is required, but it shall notify the defendant of the legal basis of the claim and the type of loss sustained, including with specificity the nature of the injuries suffered. If the notice is served within ninety (90) days of the expiration of the applicable statute of limitations, the time for the beginning of the action shall be extended ninety (90) days from the service of the notice. This subsection shall not be applicable with respect to any defendant whose name is unknown to the plaintiff at the time of filing the complaint and who is identified therein by a fictitious name.
SECTION 9. The following shall be codified as Section 11-46-14, Mississippi Code of 1972:
11-46-14. (1) Notwithstanding the provision of Section 85-5-7, in any civil action brought under this chapter for money damages as compensation for injuries or wrongful death arising out of the course of medical, surgical or other professional medical services by two (2) or more persons or entities, where one or more joint tort-feasors is entitled to the limits of liability described in Section 11-46-15 and one or more joint tort-feasors is a licensed physician, any judgment against such joint tort-feasors shall be several only, and not joint and several, and such joint tort-feasors shall be liable only for the amount of damages allocated in direct proportion of percentage of fault determined by the finder of fact.
(2) Nothing in this section shall eliminate or diminish any defense or immunities which exist herein, except as expressly noted herein. Specifically, this shall not eliminate the limitation of liability described in Section 11-46-15.
(3) In actions involving joint tort-feasors, the trier of fact shall determine the percentage of fault for each party alleged to be at fault.
(4) Nothing in this section shall be construed to create a cause of action. Nothing in this section shall be construed, in any way, to alter immunity of any person.
SECTION 10. Section 11-46-1, Mississippi Code of 1972, is amended as follows:
11-46-1. As used in this chapter the following terms shall have the meanings herein ascribed unless the context otherwise requires:
(a) "Claim" means any demand to recover damages from a governmental entity as compensation for injuries.
(b) "Claimant" means any person seeking compensation under the provisions of this chapter, whether by administrative remedy or through the courts.
(c) "Board" means the Mississippi Tort Claims Board.
(d) "Department" means the Department of Finance and Administration.
(e) "Director" means the executive director of the department who is also the executive director of the board.
(f) "Employee" means any officer, employee or servant of the State of Mississippi or a political subdivision of the state, including elected or appointed officials and persons acting on behalf of the state or a political subdivision in any official capacity, temporarily or permanently, in the service of the state or a political subdivision whether with or without compensation. The term "employee" shall not mean a person or other legal entity while acting in the capacity of an independent contractor under contract to the state or a political subdivision; provided, however, that for purposes of the limits of liability provided for in Section 11-46-15, the term "employee" shall include physicians under contract to provide health services with the State Board of Health, the State Board of Mental Health or any county or municipal jail facility while rendering services under such contract. The term "employee" shall also include any physician, dentist or other medical practitioner under contract or affiliated with or employed by the University of Mississippi Medical Center, its departmental practice plans, or who practices on the campus of any university under the control of the Board of Trustees of State Institutions of Higher Learning. The term "employee" shall also include any physician, dentist or other medical practitioner under contract or affiliated with or employed by the State Veterans Affairs Board. The term "employee" shall also include Mississippi Department of Human Services licensed foster parents for the limited purposes of coverage under the Tort Claims Act as provided in Section 11-46-8.
(g) "Governmental entity" means and includes the state and political subdivisions as herein defined.
(h) "Injury" means death, injury to a person, damage to or loss of property or any other injury that a person may suffer that is actionable at law or in equity.
(i) "Political subdivision" means any body politic or body corporate other than the state responsible for governmental activities only in geographic areas smaller than that of the state, including, but not limited to, any county, municipality, school district, community hospital as defined in Section 41-13-10, Mississippi Code of 1972, airport authority or other instrumentality thereof, whether or not such body or instrumentality thereof has the authority to levy taxes or to sue or be sued in its own name.
(j) "State" means the State of Mississippi and any office, department, agency, division, bureau, commission, board, institution, hospital, college, university, airport authority or other instrumentality thereof, whether or not such body or instrumentality thereof has the authority to levy taxes or to sue or be sued in its own name.
(k) "Law" means all species of law, including, but not limited to, any and all constitutions, statutes, case law, common law, customary law, court order, court rule, court decision, court opinion, court judgment or mandate, administrative rule or regulation, executive order, or principle or rule of equity.
SECTION 11. The following shall be codified as Section 41-105-1, Mississippi Code of 1972:
41-105-1. Short title. Sections 41-105-1 through 41-105-21 shall be known and may be cited as the "Mississippi Care Access and Reliability Enhancement Act" or the "Mississippi CARE Act."
SECTION 12. The following shall be codified as Section 41-105-3, Mississippi Code of 1972:
41-105-3. Legislative findings. It is hereby declared:
(a) That there exists in the State of Mississippi a severe shortage of quality, affordable healthcare;
(b) That this shortage contributes to the creation and persistence of substandard healthcare for many Mississippians and is damaging to the health, welfare and prosperity of all of the residents of the State of Mississippi;
(c) That this shortage disproportionately affects children, the poor, the elderly and public employees;
(d) That this shortage can be significantly ameliorated through the creation and maintenance of a nonprofit authority with powers to encourage the provision of healthcare to all Mississippians, and particularly to children, the poor, the elderly and public employees;
(e) That there now exists an emergency situation created by this shortage; and
(f) That it is in the public interest that the creation and funding of a nonprofit authority to address these issues be implemented and effected immediately in order to remedy such emergency situation.
SECTION 13. The following shall be codified as Section 41-105-5, Mississippi Code of 1972:
41-105-5. Purpose and scope. (1) The purpose of the Mississippi CARE Act is to create a framework to ensure that quality, affordable healthcare will be available to Mississippi's patients, and particularly patients participating in the Medicaid, Medicare, Children's Health Insurance Program, and State Health Insurance Programs.
(2) The provisions of this act shall apply to all participating healthcare providers as defined in Section 41-105-7.
SECTION 14. The following shall be codified as Section 41-105-7, Mississippi Code of 1972:
41-105-7. Definitions. As used in Sections 41-105-1 through 41-105-19, the following words shall have the meaning ascribed herein unless the context clearly requires otherwise:
(a) "Authority" means the Mississippi Care Access and Reliability Enhancement Authority created in Section 41-105-9.
(b) "Board" means the Mississippi CARE Board of Directors created in Section 41-105-9.
(c) "Court" means a court of competent jurisdiction and proper venue over the parties.
(d) "Gross malpractice" means failure to exercise the required degree of care, skill or knowledge that amounts to: (i) a conscious indifference to the consequences which may result from the gross malpractice; and (ii) a disregard for and indifference to the safety and welfare of the patient.
(e) "Healthcare" means any act, or treatment performed or furnished, or which should have been performed or furnished, by any healthcare provider for, to, or on behalf of a patient during the patient's medical care, treatment or confinement.
(f) "Healthcare provider" means (i) a person, partnership, limited liability entity or corporation licensed or certified or authorized by state or federal law to provide professional healthcare service in this state to an individual during that individual's health care, treatment or confinement; and (ii) a healthcare facility or institution, whether public or private, proprietary or nonprofit, which offers diagnosis, treatment, inpatient or ambulatory care to two (2) or more unrelated persons.
(g) "Malpractice" means any unintentional tort or any breach of contract based on healthcare or professional services rendered, or which should have been rendered, by a healthcare provider, to a patient, including failure to render services timely and the handling of a patient, including loading and unloading of a patient, and also includes all legal responsibility of a healthcare provider arising from acts or omissions in the training or supervision of healthcare providers, or from defects in blood, tissue, transplants, drugs and medicines, or from defects in or failures of prosthetic devices, implanted in or used on or in the person of a patient.
(h) "Medical costs and related economic damages" means all reasonable medical, surgical, hospitalization, physical rehabilitation, custodial services and related economic damages, including prescription drugs, care, custody, prosthetic devices and other similar materials reasonably necessary in the provision of such services, and loss of earnings and loss of earning capacity after the date of the injury. Medical costs and related economic damages shall not include any noneconomic damages.
(i) "Noneconomic damages" means any damages which compensate for pain, suffering, inconvenience, physical impairment, disfigurement and other nonpecuniary damages.
(j) "Participating healthcare provider" means any healthcare provider who meets the qualification requirements set forth in Section 41-105-15 and shall include all officers and employees of such participating healthcare provider, provided that in the event such officers or employees individually fall within the definition of a healthcare provider as set forth in this section, then such officers and employees must each individually meet the qualification requirements set forth in Section 41-105-15.
(k) "Patient" means a natural person who receives or should have received health care from a licensed healthcare provider, under a contract, express or implied.
(l) "Patient's Lifetime Adequate Necessities Fund" or "PLAN Fund" means the fund to be created pursuant to the provisions of Section 41-105-11(2).
(m) "Person" means an individual, corporation, limited liability entity, partnership, association, joint stock company, trust, unincorporated organization, any similar entity or any combination of the foregoing acting in concert.
SECTION 15. The following shall be codified as Section 41-105-9, Mississippi Code of 1972:
41-105-9. Mississippi CARE Authority. (1) There is hereby created a nonprofit legal entity to be known as the Mississippi Care Access and Reliability Enhancement Authority or the authority.
(2) The authority shall be governed by and shall operate subject to the supervision and approval of a nine-member board of directors. All appointees shall be persons with related business, financial, legal or other relevant expertise.
(3) The appointed board members shall be divided into three (3) classes, designated Class A, Class B and Class C. Each class shall consist of three (3) board members to be appointed by the Governor. Except for initial appointments and appointments to fill a vacancy, board members shall be appointed annually on September 1 if a business day, and if not a business day, then on the next business day following September 1. Terms shall expire on August 31. Initial appointments shall be made within ten (10) days of the effective date of this law and shall be as follows: Class A board members shall be appointed for a term expiring August 31, 2003; Class B board members for a term expiring August 31, 2004; and Class C board members for a term expiring August 31, 2005. Each succeeding appointment shall be for a three-year term. Despite the expiration of a board member's term, the board member shall continue to serve until a successor is appointed and qualifies. If a vacancy arises, the Governor shall appoint a successor to fill the unexpired portion of the term. A board member must be a resident of this state.
(4) The Governor shall appoint one (1) board member to serve as chairman of the board.
(5) Board members may be reimbursed from monies of the association for actual and necessary expenses incurred by them as members in the manner and amount provided in Section 25-3-41, Mississippi Code of 1972, but shall not otherwise be compensated for their services.
SECTION 16. The following shall be codified as Section 41-105-11, Mississippi Code of 1972:
41-105-11. Mississippi CARE Authority powers and duties. (1) The authority shall create and administer a mandatory medical review process in accordance with the requirements of this section.
(a) The medical review process shall provide for the review of all malpractice claims against participating healthcare providers by a medical review panel. No action against a participating healthcare provider or his insurer may be commenced in any court before the claimant's proposed complaint has been presented to a medical review panel.
(b) A medical review panel shall issue an expert opinion concerning the malpractice claim which shall be admissible as evidence in any action subsequently brought by the claimant in a court of law. Such expert opinion shall not be conclusive. Either party shall have the right to call, at his cost, any member of the medical review panel as a witness. If called, the witness shall be required to appear and testify.
(c) The members of a medical review panel shall consist of three (3) participating healthcare providers who hold unlimited licenses to practice their profession in Mississippi and one (1) duly licensed attorney. The members of a medical review panel shall be appointed by the board.
(d) The filing of a request for a review of a claim by a medical review panel shall suspend the time within which suit must be instituted until ninety (90) days following notification, by certified mail, to the claimant or his attorney of the issuance of the opinion by a medical review panel.
(e) The authority shall adopt policies and procedures for the medical review process, including without limitation rules and procedures for the appointment of the members of a medical review panel, the presentation of evidence, payment of costs and fees, witnesses, and the issuance of opinions by the medical review panel.
(2) There shall be created in the State Treasury the Patient's Lifetime Adequate Necessities Fund, to be known as the PLAN Fund, in accordance with the requirements of this section.
(a) The authority shall collect surcharges from all participating healthcare providers in such amounts as the board determines to be necessary, together with other funds of the authority available for such purpose, to provide for payments from the PLAN Fund as provided in Section 41-105-11(2)(b).
(b) In the event that a judgment, settlement or final award in an arbitration proceeding exceeds the total liability of all participating healthcare providers as provided in Section 41-105-15(2)(b), then application may be made to the authority for payment out of the PLAN Fund for that portion of such excess judgment, settlement or final arbitration award that is determined by the authority to constitute eligible medical costs and related economic damages.
(c) The authority shall adopt policies and procedures for the administration of the PLAN Fund. Such policies and procedures shall be included in the plan of operation required by Section 41-105-11(4).
(d) Jurisdiction for appeals of decisions of the authority with respect to the PLAN Fund shall be exclusively with the Chancery Court in the First Judicial District of Hinds County, Mississippi. Such appeals shall be conducted based on the record made with the authority and not as a trial de novo.
(3) The authority may exercise powers granted to insurers under the laws of this state to write or otherwise make available medical malpractice insurance in the State of Mississippi. The insurance functions of the authority shall be subject to the insurance laws of the State of Mississippi applicable to insurers writing similar lines of insurance.
(4) The authority shall adopt a plan of operation for purposes of implementing this chapter, including the provisions of Section 41-105-19, and submit its plan of operation to the Mississippi Commissioner of Insurance for approval.
(5) The authority may take any legal actions necessary or proper to accomplish the purposes set forth in this chapter, including without limitation, entering into contracts, suing or being sued, and appointing appropriate administrative, legal, accounting, actuarial and other persons as necessary to provide assistance in the operation of the authority. The authority is authorized to borrow money to effect the purposes of the authority.
(6) The Mississippi Commissioner of Insurance may, by rule, establish additional powers and duties of the board and may adopt such rules as are necessary and proper to implement this chapter. The Mississippi Commissioner of Insurance shall have the power to retain accountants, attorneys, actuaries and any other experts he deems necessary to carry out his responsibilities under this chapter.
(7) The Mississippi Commissioner of Insurance shall examine and investigate the authority and make an annual report to the Legislature and the Governor thereon.
(8) If the board at any time determines that the authority lacks sufficient funds to conduct all or any part of its operations in accordance with the Mississippi CARE Act, then the board may suspend or terminate all or any part of the operations of the authority until such time as the board determines that adequate funds are available to conduct such suspended or terminated operations; provided, however, the board must have the approval of the Mississippi Commissioner of Insurance prior to suspending or terminating any insurance functions of the authority. Notice of any such suspension or termination of operations, and of the resumption of any suspended or terminated operations, shall be given to the Governor, the Legislature, the Mississippi Commissioner of Insurance and all participating healthcare providers.
SECTION 17. The following shall be codified as Section 41-105-13, Mississippi Code of 1972:
41-105-13. Liability, indemnification and legal representation. Neither the CARE Board nor its employees shall be liable for any obligations of the authority. There shall be no liability on the part of and no cause of action shall arise against the authority or its agents or employees, members of the board of directors, the Commissioner of Insurance or his representatives for any action or omission by them in the performance of their powers and duties under this chapter. The board may provide in its bylaws or rules for indemnification of, and legal representation for, its members, agents and employees.
SECTION 18. The following shall be codified as Section 41-105-15, Mississippi Code of 1972:
41-105-15. Participating healthcare providers. (1) In order to be qualified as a participating healthcare provider and to participate in the provisions of this chapter, a healthcare provider must:
(a) Meet the proof of financial responsibility requirements as set forth in Section 41-105-17.
(b) Cause to be filed with the board a written agreement, the form and substance of which shall be determined by the board, signed by a duly authorized representative, that the healthcare provider will provide services to (i) Medicaid recipients, (ii) Medicare recipients, (iii) Children's Health Insurance Program participants, and (iv) State Health Insurance Program participants. Such written agreement shall provide, among other things, that the healthcare provider will provide services to Medicaid recipients, Medicare recipients, Children's Health Insurance Program participants, and State Health Insurance Program participants in a manner that is comparable to the services provided to all other patients and shall be made without balance billing to the patient.
(c) Pay all surcharges assessed according to Section 41-105-11(2).
(2) Except as specifically set forth in Section 41-105-15(3), the total amount recoverable for all malpractice claims brought against all participating healthcare providers involved in any one (1) incident of injury to or death of any one (1) patient, shall be limited to the following:
(a) Up to Two Hundred Fifty Thousand Dollars ($250,000.00) for noneconomic damages; and
(b) Up to Two Hundred Fifty Thousand Dollars ($250,000.00) for medical costs and related economic damages; provided, however, that in the event that a judgment, settlement or final award in an arbitration proceeding exceeds Two Hundred Fifty Thousand Dollars ($250,000.00) for medical costs and related economic damages, then application may be made to the authority for payment out of the PLAN Fund in accordance with the provision of Section 41-105-11(2)(b). Payments from the PLAN Fund shall be paid to the patient as periodic payments in such manner as determined by the authority.
(3) The limitation on noneconomic damages as set forth in Sections 41-105-15(2)(a) and 41-105-15(4) does not apply in the following circumstances and types of cases:
(a) A case in which the conduct of the defendant is determined to constitute gross malpractice; or
(b) A case in which, following return of a verdict by the jury or a finding of damages in a bench trial, the court determines, by clear and convincing evidence admitted at trial, that an award in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) for noneconomic damages is justified because of exceptional circumstances.
(4) No more than Five Hundred Thousand Dollars ($500,000.00) in noneconomic damages may be recovered against a healthcare provider who fails to qualify as a participating healthcare provider or who does not make application to qualify as a participating healthcare provider in connection with all malpractice claims for any one incident of injury to or death of any one patient. Except for the foregoing, a healthcare provider who fails to qualify as a participating healthcare provider or who does not make application to qualify as a participating healthcare provider is not covered by the provisions of this chapter and is subject to liability under the law without regard to the provisions of this chapter.
(5) No liability shall be imposed upon any participating healthcare provider on the basis of an alleged breach of contract, whether by express or implied warranty, assuring results to be obtained from any procedure undertaken in the course of healthcare, unless such contract is expressly set forth in writing and signed by such participating healthcare provider or by an authorized agent of such participating healthcare provider.
(6) The liability limitations set forth in Section 41-105-15(2) and (4) shall be adjusted for inflation annually. The adjustment made pursuant to this paragraph shall be rounded upward or downward to the nearest increment of Ten Dollars ($10.00). The authority shall make available the cost of living increase calculations, if any, as soon as such information becomes available each year.
SECTION 19. The following shall be codified as Section 41-105-17, Mississippi Code of 1972:
41-105-17. Proof of financial responsibility. (1) Financial responsibility of a participating healthcare provider may be established by either:
(a) Filing with the board proof that the participating healthcare provider is adequately insured for its exposure under this chapter by a policy of malpractice liability insurance approved by the board from an insurance company approved by the board; or
(b) Maintaining on deposit with the board an amount approved by the board to adequately cover its exposure under this chapter in the form of cash or other collateral approved by the board.
(2) The policy of malpractice liability insurance required by Section 41-105-17(1)(a) may be issued, in form approved by the authority, by any company created pursuant to Sections 83-47-1 et seq. or any other insurance company approved by the board.
(3) Any properly licensed agent may sell any policy of malpractice liability insurance approved by the board from an insurance company approved by the board to participating healthcare providers in accordance with this chapter.
SECTION 20. The following shall be codified as Section 41-105-19, Mississippi Code of 1972:
41-105-19. Additional protections; exclusive remedy. (1) The Mississippi CARE Act shall not limit or preempt any protections or liability limitations afforded to participating healthcare providers.
(2) Except to the extent that other applicable law would further limit the remedies available (and in such event such limited remedy shall apply), the remedy provided by this chapter against a participating healthcare provider is exclusive of any other civil action or civil proceeding by reason of the same subject matter against the participating healthcare provider for the act or omission which gave rise to the claim or suit, and any claim made or suit filed against a participating healthcare provider to recover damages for any malpractice injury shall be brought only under the provisions of this chapter, notwithstanding the provisions of any other law to the contrary.
SECTION 21. The following shall be codified as Section 41-105-21, Mississippi Code of 1972:
41-105-21. Funding of authority. Reasonable expenses of the authority incurred in connection with the execution of its authority under this chapter, including without limitation, expenses for start-up costs, operations and insurance reserves shall be provided from any available funds, pursuant to appropriation by the Legislature.
The plan of operation adopted by the board shall provide that, from time to time, the board shall determine whether and to what extent its income, including without limitation, any premiums and surcharges collected, exceeds anticipated or actual expenses and reasonable reserves and the board shall pay such excess amounts to the Health Care Expendable Fund.
SECTION 22. Section 83-47-1, Mississippi Code of 1972, is brought forward as follows:
83-47-1. The public health and welfare requires the adoption of this chapter providing for the organization and operation of nonprofit medical liability insurance corporations.
SECTION 23. Section 83-47-3, Mississippi Code of 1972, is brought forward as follows:
83-47-3. Any seven (7) or more physicians licensed to practice in Mississippi who are residents of this state, may form a nonprofit corporation under this chapter for the purpose of providing medical, professional, general and other liability insurance to health care providers, health care facilities and managed care organizations in Mississippi and any other state or jurisdiction. The term "health care provider," when used in this chapter, shall mean a physician, dentist, pharmacist, osteopath, psychologist, podiatrist, optometrist, chiropractor, nurse, medical technician or other health care provider licensed by the State of Mississippi or any other state or jurisdiction. The term "health care facility," when used in this chapter, shall mean a medical clinic, nursing home, outpatient surgical center, laboratory, pharmacy, dialysis clinic, hospital or other health care facility licensed, if necessary, by the State of Mississippi or any other state or jurisdiction. The term "managed care organization," when used in this chapter, shall mean a health maintenance organization (HMO), individual practice association (IPA), preferred provider organization (PPO), competitive medical plan (CMP), exclusive provider organization (EPO), integrated delivery system (IDS), independent physician/provider organization (IPO), management service organization (MSO), physician hospital/provider organization (PHO) and any other type of managed care organization. Members of the corporation shall consist of only individuals under contracts which entitle such individuals to medical liability insurance. Health care facilities and managed care organizations need not be owned by or comprised of members of the corporation in order to be insured by the corporation. All such corporations shall be governed by this chapter and shall be exempt from all other provisions of the insurance laws of this state, unless otherwise specifically provided herein. Such a corporation may be formed under this chapter in the following manner:
(a) The proposed incorporators shall subscribe articles of incorporation in which shall be stated:
(i) The proposed corporate name of the corporation, which shall not so closely resemble the name of any other corporation already transacting business in this state as to mislead the public or lead to confusion;
(ii) The domicile of the proposed corporation;
(iii) The names and post office addresses of the incorporators;
(iv) The fact that application for charter is being made under this chapter and the corporation proposed to operate under and subject to the provisions of this chapter;
(v) The purposes of the corporation.
(b) Such articles of incorporation shall be filed with the Commissioner of Insurance, who shall refer the same to the Attorney General for his opinion as to whether the same meet the requirements of this chapter and are not otherwise violative of the Constitution or laws of this state or of the United States. The Attorney General shall examine the same and endorse his opinion thereon and return the same to the Commissioner of Insurance for approval. The Commissioner of Insurance shall (if the same be approved by the Attorney General) thereupon endorse his certificate of approval upon such articles of incorporation, record the same in his office, and refer the same to the office of the Secretary of State to be there recorded, whereupon said corporation shall become and be considered an existing entity. The articles of incorporation as thus approved and recorded shall be and constitute the charter of incorporation of such corporation. It shall not be necessary that such charter be published, nor shall it be necessary that it be recorded in the office of the chancery clerk.
SECTION 24. Section 83-47-5, Mississippi Code of 1972, is brought forward as follows:
83-47-5. Corporations organized under this chapter shall not have capital stock, but shall have members as prescribed and contemplated by the terms and provisions of this chapter; and such members shall have the privileges provided for in this chapter. The subscribers to the articles of incorporation as the organizers of the corporation shall have power to elect the first board of directors, who shall serve for the terms prescribed in the next sentence of this section, or until their successors are elected and qualified. One-third (1/3) of the members of the first board of directors shall be elected for a term of one (1) year, one-third (1/3) for a term of two (2) years, and one-third (1/3) for a term of three (3) years. Thereafterwards, directors shall be elected for terms of three (3) years. Provisions shall be made for subsequent elections of directors, including the time and place of such elections and notice thereof to the membership by (a) resolution of the directors entered upon the minutes not less than sixty (60) days before such election, designating the time and place of such election, such minutes to be open to the membership as hereinafter provided, or (b) by the time and place of such election being fixed by resolution of the directors, and notice thereof being mailed to the members at least fifteen (15) days before the time fixed for such election. All minutes of the corporation with respect to the time and place fixed for any such election of directors shall be open to members at all reasonable times, but no notice of elections shall be necessary, other than as herein provided. Each member shall be entitled to one (1) vote in the election of directors. It shall be the duty of the directors to provide for elections as the terms of office of directors expire, and it shall be the duty of the Commissioner of Insurance as a part of his supervisory jurisdiction over such corporations to see that the directors faithfully perform this duty. If such directors shall fail to so provide for the election of directors, it shall be the duty of the Commissioner of Insurance to report this fact to the membership of the corporation and himself call a meeting of the membership for the election of directors; and the corporation shall forthwith, upon demand of the commissioner, reimburse him for all expenses incurred in the performance of these duties. A majority vote of the members present in person (or by proxy, if proxy be provided for) and voting shall be required and shall be sufficient for the election of directors.
The membership of the corporation shall consist of any individual who has applied for, or been granted, a license to practice medicine in the State of Mississippi, or any other state or jurisdiction, provided he has first applied for membership on the form prescribed by the board of directors and paid the requisite fees, charges and premiums in advance therefor, and agreed to comply with and be bound by the charter and bylaws and amendments thereto, and the rules, regulations and guidelines adopted from time to time by the board of directors or any committee authorized by the board of directors to so act.
No person may own more than one (1) membership in the corporation, nor shall any member be entitled to more than one (1) vote upon any matter submitted to a vote at the meeting of the members.
Membership shall not be granted until a membership certificate in the form prescribed by the board of directors shall have been duly issued.
The event of (a) death, or (b) revocation of license to practice medicine, or (c) nonpayment of membership fees, dues, assessments or premiums, or (d) failure to comply with and abide by all provisions of the charter and bylaws and amendments thereto, and the rules, regulations and guidelines adopted from time to time by the board of directors or (e) termination of insurance with the corporation for any reason, shall operate ipso facto to terminate membership in the corporation, and all interest of any such member in the assets of the corporation shall then and thereby terminate and cease, except for the right to receive benefits provided for under contracts or the bylaws of the corporation.
The directors shall have power to adopt bylaws, elect officers and manage the affairs of the corporation. They shall also have the power to determine whether voting in the election of directors may be done by proxy and, if so, the manner and method thereof.
SECTION 25. Section 83-47-7, Mississippi Code of 1972, is brought forward as follows:
83-47-7. (1) Each corporation established under the provisions of this chapter shall furnish to the commissioner of insurance all information that he may request concerning the number of members of any such corporation and the type of practice of each such member. After considering the number of members and the type of practice of each such member, the commissioner of insurance shall require a minimum capital of five hundred thousand dollars ($500,000.00) and a minimum surplus of five hundred thousand dollars ($500,000.00) for such corporation. All dues, fees and assessments to any member of the corporation shall be set and maintained at the lowest possible cost subject to sound business practice and shall be subject to review and approval of the commissioner of insurance. No corporation established under the provisions of this chapter shall transact any other business than that specified in its charter and articles of incorporation; and it shall not begin operation until it has fully complied with all rules and regulations promulgated by the commissioner of insurance with respect to such corporations and until it has established the capital and reserve set for it by the commissioner.
(2) When necessary to effect the purposes of this section, in addition to all other remedies in law or equity, the attorney general and commissioner of insurance may be and are hereby authorized to petition the chancery court of the county in which a corporation established under this chapter is domiciled for a mandamus or injunction to prevent any violation of the provisions of this section, or the continuance of any such violation, or to enforce compliance herewith. The court is hereby vested with authority to entertain jurisdiction on any such petition to determine the cause and to issue such process as may be necessary to accomplish the purposes of this section.
SECTION 26. Section 83-47-9, Mississippi Code of 1972, is brought forward as follows:
83-47-9. Each member shall pay all dues, fees and assessments in such amounts as may be established from time to time by the resolution of the board of directors. The board of directors shall have the authority to provide for separate and distinct classes of insurance and groupings of members and insureds and to fix assessments and premiums at varying and different amounts for the various classes. No member or insured shall refuse or neglect to pay his or its assessment or premium because the amount thereof differs or varies from the amount of the assessment or premium of members in other classes or groupings. The board of directors shall endeavor to establish and fix assessments and premiums for the various classes and groupings which are reasonable in amount, relative to the benefits to be received by those members and insureds within the classes and groupings involved, and the action of the board of directors in so doing shall be conclusive and final. Each member shall also pay all obligations which may, from time to time, become due and payable by such member to the corporation as and when the same shall become due and payable. Such fees, assessments and premiums required of members and insureds shall contain an amount sufficient to pay three percent (3%) premium tax, the same as levied on all other domestic nonprofit insurance corporations. Such premium taxes shall be collected and paid into the treasury by the State Tax Commission.
SECTION 27. Section 83-47-11, Mississippi Code of 1972, is brought forward as follows:
83-47-11. The private property of the members of the corporation shall be exempt from the execution for the debts of the corporation, and no member shall be individually liable or responsible for any debts or liabilities of the corporation.
SECTION 28. Section 83-47-13, Mississippi Code of 1972, is brought forward as follows:
83-47-13. Every such corporation shall annually, on or before the first day of March, file in the office of the commissioner of insurance a statement verified by at least two (2) of the principal officers of said corporation, showing its condition on the thirty-first day of December of the preceding year, which shall be in such form and shall contain such matters as the commissioner shall prescribe.
SECTION 29. Section 83-47-15, Mississippi Code of 1972, is brought forward as follows:
83-47-15. The commissioner of insurance may appoint any deputy or examiner or other person who shall have the power of visitation and examination into the affairs of any such corporation and free access to all of the books, papers and documents that relate to the business of the corporation, and may summon and qualify witnesses under oath to examine its officers, agents, employees or other persons in relation to the affairs, transactions and conditions of the corporation.
SECTION 30. Section 83-47-17, Mississippi Code of 1972, is brought forward as follows:
83-47-17. Any dissolution or liquidation of a corporation, subject to the provisions of this chapter, shall be conducted under the supervision of the commissioner of insurance, who shall have all power with respect thereto under the provisions of law with respect to the dissolution and liquidation of insurance companies.
SECTION 31. Section 83-47-19, Mississippi Code of 1972, is brought forward as follows:
83-47-19. Every corporation organized pursuant to, or subject to, the provisions of this chapter is hereby declared to be a charitable and benevolent institution, and its funds and property shall be exempt from taxation, except from the premium tax levied in accordance with the provisions of this chapter and ad valorem taxes upon real estate and motor vehicles owned by it.
SECTION 32. Section 83-47-21, Mississippi Code of 1972, is brought forward as follows:
83-47-21. Any corporation heretofore or hereafter organized and operating under Chapter 11, Title 79, Mississippi Code of 1972, desiring to become a nonprofit corporation of the kind and character described in this chapter, and to operate under and pursuant to the terms of this chapter, may convert its organization into such nonprofit corporation under this chapter in the following manner, to wit:
(a) File a written application with the commissioner of insurance annexing thereto copies of (i) its articles of incorporation or new or amended articles of incorporation; (ii) its bylaws; (iii) its form of contract between the corporation and members, showing the terms under which medical liability insurance is to be furnished to members; (iv) its contracts with members, showing a table of assessments and the benefits to which members are entitled; and (v) a financial statement of the corporation, including the amounts of contributions paid or agreed to be paid to the corporation for working capital, the name or names of each contributor, and the terms of each contribution.
(b) Submit any further data or evidence as may be required by the commissioner.
(c) The commissioner shall refer the corporation's articles of incorporation to the attorney general for his opinion as to whether the same meet the requirements of this chapter. The attorney general shall, if in order to do so, endorse his approval thereon and return the same to the commissioner of insurance. The commissioner shall thereupon endorse upon said articles of incorporation his certificate of approval, whereupon said corporation shall be deemed to be converted under and existing and operating pursuant to the terms of this chapter. The articles of incorporation bearing such approval of the attorney general and the commissioner shall be recorded in the offices of the commissioner of insurance and of the secretary of state in like manner as in this chapter provided for recording the articles of incorporation of a corporation organized under this chapter in the first instance.
SECTION 33. Section 83-47-23, Mississippi Code of 1972, is brought forward as follows:
83-47-23. The organization as created under the authority of this chapter shall in no manner be covered under or included in the provisions of Sections 83-23-101 through 83-23-135.
SECTION 34. Section 83-47-25, Mississippi Code of 1972, is brought forward as follows:
83-47-25. (1) A corporation organized under this chapter may become a stock insurance corporation under such plan and procedure as may be approved by the Commissioner of Insurance.
(2) The Commissioner of Insurance shall approve any such plan or procedure if:
(a) It is equitable to the corporation's members;
(b) It is subject to approval by vote of not less than three-fourths (3/4) of the corporation's current members voting thereon in person or by proxy at a meeting of members called for the purpose pursuant to such reasonable notice and procedure as may be approved by the Commissioner of Insurance; right to vote may be limited to members who hold policies at the time of the vote and whose policies have been in force for not less than one (1) policy year;
(c) The equity of each member in the corporation is determinable under a fair formula approved by the Commissioner of Insurance, which such equity shall be based upon not less than the corporation's entire surplus as reported in the corporation's annual statement to the Commissioner of Insurance, after deducting borrowed surplus funds, plus all nonadmitted assets;
(d) The members entitled to participate in the purchase of stock or distribution of assets shall include all current members who hold policies at the time of the vote and whose policies have been in force for not less than one (1) policy year;
(e) The plan gives to each member, as specified in subsection (2)(d) of this section, a preemptive right to acquire his proportionate part of all of the proposed capital stock of the corporation, within a designated reasonable period, and to apply upon the purchase thereof the amount of his equity in the corporation as determined under subsection (2)(c) of this section;
(f) Shares are so offered to members at a price not greater than to be thereafter offered to others;
(g) The plan provides for payment to each member not electing to apply his equity in the corporation for, or upon, the purchase price of stock to which the member is preemptively entitled of cash in the amount of his equity not so used for the purchase of stock, and which case payment, together with stock so purchased, if any, shall constitute full payment and discharge of the member's equity as a member of such corporation; and
(h) The plan, when completed, would provide for the converted corporation paid-in capital stock in an amount not less than the minimum paid-in capital required of a domestic stock insurer transacting like kinds of insurance, together with surplus funds in amount not less than one half (1/2) of such required capital.
(3) Once conversion under this section is complete, the converted corporation shall no longer be governed by this chapter and shall be governed by the provisions of the insurance laws of this state applicable to general liability insurers.
SECTION 35. This act shall take effect and be in force from and after its passage and shall apply only to causes of action accruing on or after that date.