ProAssurance is one of the largest medical liability insurance providers in the United States. ProAssurance’s most important division is its Specialty Property and Casualty segment (“Specialty P&C”), which has consistently accounted for at least 60% of the Company’s gross premiums written since 2015. This segment includes a healthcare professional liability line of business, primarily offered to healthcare providers. While the Company provides traditional liability insurance products, ProAssurance also provides “innovative and customized products to meet the risk management needs of larger healthcare organizations or groups.”
The Complaint asserts claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against ProAssurance and certain of its executive officers. The action alleges that during the Class Period, Defendants misrepresented the Company’s underwriting and reserve standards, and failed to adequately reserve for losses. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) ProAssurance lacked adequate underwriting process and risk management controls necessary to set appropriate loss reserves in its Specialty P&C segment; (ii) ProAssurance failed to properly assess a large national healthcare account that experienced losses far exceeding the assumptions made when the account was underwritten; and (iii) as a result, ProAssurance was subject to a materially heightened risk of financial loss and reserve charges.