Committee on Lawyer Malpractice Insurance
R. Paul Childress, Chair
ALPS RRG (Attorneys Liability Protection Society Inc., A Risk Retention Group) is the VSB’s endorsed professional liability insurance carrier. The Special Committee on Lawyer Malpractice Insurance (LMI Committee) continued its overview of ALPS’s risk management endeavors during FY2013.
On the risk management front, ALPS contributed 3 percent of its Virginia gross written premium in 2012, or $233,000, to support a variety of VSB risk management activities. Those dollars supported a statewide fall risk management tour (where 1,400 Virginia attorneys earned three hours of CLE ethics credit), a Hanging Out a Shingle mini-tour, three webinars, nine programs uploaded into a Virginia on-demand library, and the retention of a dedicated, full-time Virginia risk manager able to serve as a risk management resource with local bars and engage in article publication, blogging, and fielding Virginia lawyer calls.
As of June 30, 2013, 3,720 Virginia lawyers were insured by ALPS in 1,930 firms. As of June 30, 2012, 3,648 Virginia lawyers were insured by ALPS in 1,888 firms. As of June 30, 2011, 3,568 Virginia lawyers were insured by ALPS in 1,847 firms.
The LMI Committee met on August 23, 2012, at its regularly scheduled meeting. Michael Glasser, Virginia lawyer, past president of the Virginia State Bar, ALPS insured and member of ALPS board of directors, was present and addressed the LMIC on the issue of ALPS stability in light of A.M. Best’s weakening of ALPS outlook to negative, despite holding its rating to A-. Specifically, Mr. Glasser stated that he does not expect Alps’ rating to go below A-. ALPS representatives, David Bell, president and chief operating ffficer, and Chris Newbold, executive vice president, also addressed the topic, and reviewed the efforts ALPS is undertaking to address A.M. Best’s concerns.
At its meetings held on November 29, 2012, February 21, 2013, and May 16, 2013, the LMI Committee continued to focus on monitoring ALPS performance, increasing the committee members’ knowledge in the LPL arena, and targeting the risk management budget toward educational topics to decrease liability for Virginia lawyers.
On May 28, 2013, ALPS notified us A.M. Best again revised its ALPS outlook, this time from Negative to Stable. The A.M. Best press release noted that the designation comes "on the heels of a record-breaking year for ALPS, with 2012 recording the highest policyholder surplus in company history," $34.4 million.
In 2012 year-end results, ALPS reported a net combined ratio of 96.10 percent overall with the Virginia book at 99.66 percent. Of its total 12,643 insureds, 3,405 were Virginia attorneys as of December 31, 2012. Claims frequency in 2012 was 4.88 percent in Virginia, compared to 4.04 percent overall. Gross written premium from the Virginia book was $8,952,606, and overall was $40,497,693. Net written premium from Virginia was $6,159,085, and overall was $27,861,019.
ALPS continues to move forward with plans to relinquish its Risk Retention Group status and become an admitted carrier in all states in which it does business. In consultation with the Virginia State Corporation Commission, it withdrew its Virginia application in February, but plans to re-file later this year after the completion of a triennial financial examination. Acceptance of ALPS as an admitted carrier in Virginia will require them to be part of the Virginia Guarantee Fund.
Finally, long-time ALPS CEO Robert W. Minto Jr. recently transitioned into his new role as executive chair of the ALPS board of directors, making way for insurance industry veteran David Bell to take the reins as CEO. Bell was previously ALPS’s president and chief operating officer.Updated: Jul 22, 2013