PLF Policy 3.620
Extended Reporting Coverage (1996 and Later Years)PLAN FOR EXTENDED REPORTING COVERAGE FOR PLAN YEAR 1996 AND LATER YEARS
(For Attorneys Leaving Private Practice in 1995 and Later Years)
The Board of Directors of the Professional Liability Fund adopts the following Plan for Extended Reporting Coverage for Claims Made Plan Year 1996 and subsequent years. This Plan for Extended Reporting Coverage is subject to amendment or termination by the Board of Directors at any time. No rights are vested as to Extended Reporting Coverage (including rights as to the cost or scope of coverage) until such time as an attorney has obtained Extended Reporting Coverage.
(A) Definitions: For the purposes of this policy, the following will apply.
(1) Regular Coverage will mean the current annual PLF coverage maintained by Oregon attorneys engaged in the private practice of law.
(2) Retirement will mean the “last act” in private practice in Oregon which would require an attorney to maintain current PLF coverage under applicable PLF statutes and policies, whether the attorney retires, dies, leaves private practice, or begins private practice in another state after such date.(B) Time When Extended Reporting Coverage Takes Effect: An attorney’s Extended Reporting Coverage (ERC) takes effect as of the first day of the next calendar month following an attorney’s date of retirement. ERC will be governed by the terms and conditions of the PLF Claims Made Plan in effect in the year of retirement.
Example: Attorney retires on August 31, 1996. The ERC would take effect for covered claims first made against the attorney on or after September 1, 1996. The 1996 Claims Made Plan would apply to all ERC claims.
Example: Attorney retires on January 4, 1996. Attorney must obtain regular 1996 coverage. ERC takes effect on February 1, 1996.
Example: Attorney retires on December 31, 1996. ERC takes effect on January 1, 1997.(C) Cost of ERC: There is no cost for Extended Reporting Coverage for 1996 and later years. ERC will be granted automatically to attorneys who do not maintain regular PLF coverage. However, ERC will not be granted to attorneys who are in default in payment of any amounts due to the PLF.
(D) Limits of Coverage: An attorney who obtains ERC in 1996 and later years does not obtain new Limits of Coverage as defined at Section VI of the PLF Claims Made Plan. Instead, the attorney obtains true “extended reporting” coverage based upon the Claims Made Plan in effect during the year of retirement. This means the Coverage Period during the last year of regular coverage is extended to a single lifetime Coverage Period for the attorney. The defense and indemnity costs for claims made during the year of retirement will reduce the Limits of Coverage available to the attorney for claims made in the years after retirement, when ERC is in effect. For this reason, attorneys with claims made against them during the year planned for retirement may wish to continue in private practice and obtain regular PLF coverage instead of ERC for one or more years to obtain new Limits of Coverage, then obtain ERC in a later year. However, attorneys should remember that claims made against an attorney should be immediately reported to the PLF, and no advantage or extra coverage limits will result by delaying reporting until a later Claims Made Plan year. In addition, there is no coverage for claims based on acts, errors, or omissions which occur after the ERC has commenced.
Example: Attorney retires on August 31, 1996. All covered claims made against the attorney after that date will be covered by the attorney’s extended reporting coverage. When ERC takes effect on September 1, 1996, the reporting period for the attorney’s regular 1996 coverage will be extended to a single lifetime reporting period commencing September 1, 1996. All claims made in 1997 or later years would fall within this single life-time reporting period, and would be subject to all terms and conditions of the 1996 Claims Made Plan and limited to the remaining Limits of Coverage available under the 1996 Claims Made Plan.
Example: Same facts as in the preceding example. The attorney had one claim made in May, 1996 which was closed in 1998 with a combined defense and indemnity cost of $85,000 (including the attorney’s entire Claims Expense Allowance). Assuming the 1996 Limits of Coverage were $300,000 plus a Claims Expense Allowance of $25,000, only $240,000 in coverage remains available for all claims made during the balance of 1996 or in 1997 or later years (when the ERC is in effect).
If the attorney wants new limits of coverage for claims made in 1997 or later years, the attorney should delay retirement, remain in private practice, obtain regular 1997 coverage, and obtain ERC in a later year.
(E) Conversion of Regular Coverage to ERC During the Plan Year: A prorated refund of an attorney’s PLF assessment may be available under the provisions of PLF Policy 3.400 if an attorney retires during the Plan Year.
(F) Filing Request for Exemption After Retirement: An attorney who retires but remains an active member of the Oregon State Bar will receive a PLF Billing Statement each year and should complete a Request for Exemption annually. If the attorney does not file a Request for Exemption or other request for ERC within four months after the end of the last Claims Made Plan year for which the attorney has regular coverage, the PLF will automatically grant ERC. No ERC will be granted if the attorney has other insurance coverage which applies to the claim. ERC applies only to claims arising from acts in the private practice of law which occurred during a period of regular PLF coverage as provided in the applicable Claims Made Plan.
Example: Attorney retires on December 31, 1996. The attorney will be granted ERC upon filing a Request for Exemption from regular PLF coverage (which should be filed by the default date of January 10, 1997).
Example: Same facts as prior example. Attorney fails to file a Request for Exemption by the default date (January 10, 1997). If the attorney does not correct this over-sight, the attorney will be suspended from membership in the Oregon State Bar by mid-April, 1997. However, even if the attorney takes no action and is suspended, the PLF will grant ERC on May 1, 1997, effective January 1, 1997. The ERC based on the attorney’s 1996 Claims Made Plan will apply to claims first made on or after January 1, 1997 arising from the attorney’s private practice of law prior to 1997.
Example: Attorney has 1996 regular coverage, but does not either pay for 1997 coverage or request exemption by the January 10, 1997 deadline. A claim is made against the attorney in February, 1997 based on an alleged error occurring in October 1996. Because the attorney has not obtained regular 1997 coverage, the PLF will provision-ally apply ERC to the claim. If the attorney obtains regular 1997 coverage by the final date for obtaining the coverage, the 1997 regular coverage will apply to the claim; otherwise, ERC will apply to the claim. If the attorney fails to act by May 1, 1997, the attorney may be suspended from membership in the Bar but ERC based on the attorney’s 1996 Claims Made Plan will apply to the claim.
Example: Attorney retires on December 31, 1996 and commences practice in California on January 1, 1997. Attorney obtains malpractice insurance in California which covers new claims from the attorney’s prior practice in Oregon. A claim is made on June 15, 1997 based on the attorney’s prior practice in Oregon. ERC does not apply to the claim.