The Bar Plan Mutual Insurance Company was formed in the mid-1980s with assistance from The Missouri Bar to provide lawyers with the broadest possible malpractice coverage at the best possible price, consistent with the long-term financial stability of the company. Almost 35 years later, we remain true to that original purpose and vision.
See the above video with Joe Petrelli, President of Demotech.
Key Facts
- The Bar Plan quickly became the market leader in Missouri and has consistently maintained this position, with a market share of 59.5% according to the 2018 Legal Malpractice Insurance Report for Missouri, which is the most recent data.
- The Bar Plan maintains an “A” “Exceptional” Financial Stability Rating from Demotech, Inc.
- We write Lawyers’ Professional Liability insurance in 5 states and have quickly become a major writer in each new state we have entered.
- We also offer court bonds, life insurance, lawyers’ business owner’s insurance, and workers’ compensation.
- We support lawyers and the practice of law with state-specific ethics and malpractice avoidance CLE programs, a risk management hotline, and practice management and risk management services.
- We are the only endorsed carrier of The Missouri Bar and the Tennessee Bar Association.
- We are a Strategic Partner of the New Mexico State Bar and Sustaining Partner of the Bar Association of Metropolitan St. Louis.
Financial Strength Overview
The Bar Plan has maintained an “A” “Exceptional” Financial Stability Rating from Demotech, Inc. since 2012. The Bar Plan earned this “A” “Exceptional” rating based on a strong balance sheet, key financial indicators, and demonstrable financial stability.
Demotech was the first company to review and rate regional and specialty insurers like The Bar Plan, beginning in 1985. Demotech assigns accurate, reliable and proven Financial Stability Ratings® (FSRs) for Property & Casualty insurers and Title companies. FSRs are a leading indicator of financial stability, providing an objective baseline of the future solvency of an insurer. Unlike other ratings agencies, Demotech focuses on objective measures rather than subjective measures that often unfairly penalize regional, specialty companies. Demotech’s philosophy is to review and evaluate insurers based on objective financial criteria rather than solely on financial size.
One key indicator of financial strength is the Net Written Premium to Surplus ratio. Anything below 3 to 1 is considered acceptable, and below 2 to 1 is considered excellent. The Bar Plan’s ratio is approximately 0.6 to 1. This is far superior to the vast majority of commercial carriers that write lawyers’ professional liability insurance. It means The Bar Plan has a very strong capital position for the amount of premium we write. As a mutual insurance company owned by our policyholders, we don’t face the financial pressures of commercial stock companies to maximize the return on their investments. This allows us to manage our surplus to the best advantage of our policyholders, which results in making decisions about coverage and premiums solely with their best interests in mind. The result is quality products backed by a strong company our policyholders can count on to be here for them when they need us.
National Council of Insurance Legislators (“NCOIL”)
There is a growing understanding among insurance professionals and regulators that several ratings agencies meet the standards for training, experience and competence to provide quality insurance financial ratings. In recognition of this, the National Council of Insurance Legislators (“NCOIL”) in November of 2017 adopted a Model Act to Support State Regulation of Insurance by Requiring Competition among Insurance Rating Agencies to benefit consumers, duly licensed insurance companies, producers, and other third-party stakeholders by promulgating and embracing insurer rating requirements in laws and regulations that incorporate the enumeration of multiple, competent insurer rating organizations. The Act warns against designating a single rating agency, and defines a “Competent Rating Agency” to include several companies, including Demotech, Inc.
The Bar Plan Reinsurers
The Bar Plan, like most similar companies, uses reinsurance to reduce financial leverage and to meet the needs of our customers. We utilize Excess of Loss (“XOL”) treaty reinsurance under which we retain only the first $250,000 of each claim, with the remainder being 100% reinsured. Our treaty participants include a diversified group of well-known, highly-regarded and highly-rated reinsurers to ensure that The Bar Plan and our insureds will be protected for any eventuality.
We Support the Legal Community in All That We Do
As a Bar-related insurance company, we are committed to servicing the legal community in many important ways:
- Our Board Members and CEO have served, and currently serve, on The Missouri Bar Board of Governors
- Members of our staff actively participate on numerous bar committees/sections, as well as in legal industry organizations
- We sponsor and/or attend many legal conferences and events in our regions; and
- Our Foundation provides scholarships to law students and makes an annual contribution to charities in the communities we serve
The Bar Plan is committed to the legal community as our sole focus. Unlike many commercial carriers that enter and exit markets based on their business models, The Bar Plan has remained a constant with the financial strength to be here for lawyers for the long term.