Nevada Mutual

Comments from the Chairman

To Our Policyholders/Owners and the Nevada Physician Community

Ten years ago, Nevada Mutual began operations as the first doctor-owned mutual insurance company in the history of Nevada.  Proud of Nevada’s history and cognizant of the insurance availability crisis that led to the Company’s creation, we marketed ourselves as “Battle Born”.  Now, as we enter our eleventh year of operation, we can even more proudly say your Company is “Battle Tested”.

In early 2008, routine disease investigation and surveillance activities led the Southern Nevada Health District to investigate a Nevada Mutual insured’s possible involvement in the spread of Hepatitis C.  That investigation resulted in the largest patient notification in United States history.  Approximately 50,000 patients were advised to get tested for infection with Hepatitis C, B and HIV.  In the resulting whirlwind, the insured clinic was closed and placed into bankruptcy, one of the principal clinic owners declared bankruptcy, state and federal criminal charges were tendered and the inevitable torrent of personal injury lawsuits were filed.

Without knowing any key facts, many of Nevada Mutual’s competitors shamefully began to announce the demise of your Company.  In fact, unfair and baseless attacks against Nevada Mutual have been a hallmark of this tragedy.  Let’s be clear.  This was a terrible situation.  Without going into specifics, we can tell you that, since 2008, your Company has spent millions of dollars protecting its insureds in this matter.  The financial impact of these payments has been recognized in Nevada Mutual’s income statement and balance sheet, especially during the past two years.  We maintain surplus to protect your Company against catastrophic events and when such an event occurs, as it did here, we necessarily use some of that surplus.

Nevada Mutual was faced with approximately 290 lawsuits from former patients who alleged they were infected with Hepatitis C or B at the clinics.   As of the date of this letter, only 18 of these claims are unresolved – and none of the remaining plaintiffs have alleged a genetic match that would tie their infection to the clinics.  We believe the Company’s loss reserves are adequate to cover all remaining potential Hepatitis exposures.  Moreover, your Company is aggressively pursuing a claim in the bankruptcy court through which it hopes to recoup some of the dollars it has spent in this matter.  Your Company met a great test.  It is truly Battle Tested and, more than ever before, prepared to defend your practices and reputations. 

As we move into our second decade of operation, we are expanding our portfolio of products to meet the evolving needs of our insureds, as well as to maintain a diversified and stable risk pool.  During this past year, a new Cyber Product providing internet and software security protection was introduced.  This year, Nevada Mutual is launching a workers’ compensation product.  We are a Company on the move looking to meet the needs of our current insureds, attract new insureds and provide Battle Tested solutions for our members’ insurance needs.

We recognize all our efforts are made possible by the support of our insureds.  We thank you for that support and look forward to serving as your professional and business insurance provider.

Terry Lewis, MD