History
NORCAL’s Rich History
In the early 1970s, the frequency and severity of medical malpractice claims exploded. Faced with skyrocketing premiums, lack of available coverage and the prospect of widespread practice closures, physicians sought reform of the entire medical liability tort system to ensure that the crisis would abate and, hopefully, never return.For California physicians, a solution came in 1975 when a special session of the California Legislature led to the enactment of the Medical Injury Compensation Reform Act of 1975 (MICRA), California’s landmark tort reform legislation. Among other important provisions, MICRA placed a reasonable and fair cap of $250,000 on noneconomic damages (i.e., pain and suffering) and limited plaintiff attorneys’ contingency fees, ensuring that the bulk of malpractice awards would actually go to the plaintiffs.
Also in 1975, in the same spirit of physician advocacy that led to the passage of MICRA, Northern California physicians banded together at the county medical society level to form NORCAL—a new kind of policyholder-owned medical liability insurance company. Our founding members had one overarching vision for the company: to insure and defend our policyholders against nonmeritorious claims while delivering the utmost in customer service and financial strength.
From our inception, NORCAL’s ties to the medical community and to the cause of tort reform have been absolute. To this day, we retain our singular commitment to improving the practice environment for our nearly 13,000 physician, medical group, clinic, hospital and ancillary healthcare facility policyholders in California, Alaska and Rhode Island.
Milestones
- NORCAL Mutual Insurance Company was incorporated on September 18, 1975 and began issuing professional liability policies on November 1. By the end of the year, NORCAL could claim approximately 2,800 policyholders in four rating classes.
- In 1979, after just four years of business, NORCAL became the first professional liability insurance company in California to initiate the return of capital contributions to policyholders.
- In 1984, we received our first "A+" rating from A.M. Best. We have maintained an "A" or better rating every single year since then.
- In 1985, spurred on by a decade of achievement, NORCAL began to offer medical liability insurance throughout California.
- In 1986, the California Supreme Court upheld the Medical Injury Compensation Reform Act (MICRA), allowing NORCAL to return over $350 million in policyholder dividends. NORCAL’s policyholder dividend record remains unsurpassed by any other U.S. medical liability insurer.
- In the early to mid-90s, NORCAL began to grow and expand, beginning with the opening of our Pasadena claims office in 1990.
- In 1991, we acquired the assets and liabilities of the Medical Indemnity Corporation of Alaska, which led to the opening of our Anchorage claims office.
- In 1994, NORCAL acquired a portion of Premiere Alliance Insurance Company’s business, located in Rhode Island, leading to the opening of our Providence claims office.
- In 1998, NORCAL acquired the majority of the Pennsylvania Medical Society Liability Insurance Company (PMSLIC), which the company now owns in full.
- In 1999, NORCAL entered into an agreement with CAP-MPT to consolidate their services into a new agency named Medical Risk Management Services, Inc. (MRMI). MRMI now offers physicians and medical practices a full range of business insurance products.
- In 2003, NORCAL’s Risk Management Department achieved the rare Accreditation with Commendation status from the ACCME, along with a six-year accreditation term for our exemplary practices in continuing medical education.
- In 2004, NORCAL launched four MICRA political action committees (PACs) in California, Alaska, Rhode Island and at the federal level, allowing policyholders and employees to actively engage in the battle for tort reform.
