Who Is This Creature

This adorable cephalopod (octopus) captivated us and it has become our mascot. Why? The first thing that caught our eye was, well, the eye. As an insurance company that is owned by our policyholders, we have been keeping a watchful eye out on behalf of our owners for thirty years, enabling best practices in risk and claims management.

And who wouldn't want an extra arm, or eight? We know that our owners are busy doing what they do best — providing health care services. Our job is to act as an extension of their organization, reaching deep into the areas of our expertise.

The cephalopod is one of the most adaptable and long-lived species on the planet. Likewise, CHI is the longest continually-operating health care professional liability insurance company in California.

And lastly, we were captivated by our mascot’s smile. Talk to any of our owners and you will hear that we are a very friendly bunch. While people don't usually think of insurance as a fun part of their business, the team at Optima has put a smile on many faces.


30 Years Ago,


30 Years Ago,

a New Species was Introduced into the Waters of the California Hospital Professional Liability Insurance Marketplace

Before 1988 and the formation of California Healthcare Insurance Company, Inc., A Risk Retention Group (CHI), independent and community hospitals were adrift when it came to professional liability insurance. The marketplace was monopolized by one dominant carrier leaving independent hospitals floundering, with no choice but to pay their exorbitantly high premiums.

A group of innovative hospital executives set off to find a better way that would lower costs and more aggressively address claims and risk management issues. They reached out to the California Hospital Association (CHA) who led the process to find this new course.

“The mission of these executives was to provide competition to the traditional marketplace and devise a more responsive and efficient long-term solution for hospital professional liability coverage,” remembers C. Duane Dauner, CHA President from 1985 to 2017.

The formation of policyholder-owned CHI by a bold group of community hospital administrators eventually sank that monopoly, opening up the California hospital professional liability insurance marketplace to healthy competition from a variety of major carriers. Yet, in this vibrant, newly competitive arena, few gave this small and innovative captive — CHI — much chance of survival.

The Right Concept, Well-executed, Takes Hold and Thrives

While the initial CHI owners were certain this new venture was both a smart and sustainable solution, most of the industry predicted CHI could not endure the rough waters ahead. Yet a success story began emerging and CHI not only survived, but thrived. Through the late 80s and early 90s CHI proved it was indeed a successful, sustainable and necessary organization. Hospital professional liability insurance premiums declined sharply in California due to the new competition from CHI, and the company was now making a profit for its owners. During this time, CHI achieved its first new owners: Community Hospital of the Monterey Peninsula and Oroville Hospital.

In 1994, CHI fully delivered on its promise to be a long-term solution for hospital professional liability insurance by issuing its historic first premium holiday to its owners. What the founding hospital executives believed about their upstart venture was true all along — CHI was a smart alternative to traditional hospital professional liability insurance and it was here to stay.

Gripping Tight and Spreading its Reach

By the mid 1990s, CHI was experiencing considerable growth thanks to its fast developing reputation in the health care industry for stabilizing hospital liability risk. The CHI model was proving itself a solid one that thrived in good and bad times — in hard professional liability insurance markets as well as soft ones. This was an organization built to survive, adapt and even influence a new environment.

In 1995, CHI’s growth, financial stability and reputation was acknowledged with its first secured and positive rating by A.M. Best Company, the insurance industry’s premier rating organization. Today, CHI’s A.M. Best rating is A- (excellent) with a stable outlook and the company’s surplus has grown to a Financial Size Category (FSC) of VII.

By the end of the decade, 21 hospitals were owners of CHI. The fledgling species that was CHI was now a force to be reckoned with.

The Creation of Optima Helps CHI Grow Additional Arms

After nine years of considerable growth, CHI formed its own brokerage and service company, Optima Healthcare Insurance Services (Optima), in 1997. With Optima in the CHI family, commissions on brokered insurance products are used to offset operating expenses. The formation of Optima built a bridge between CHI owners and their own brokerage company, creating an alignment of values, direction and accountability in addition to keeping commission dollars in the health care industry.

As a multi-line brokerage company, Optima provides comprehensive services for CHI owners through its exclusive programs for health care entities’ insurance requirements. Optima is committed to meeting and exceeding the needs of its owners through personal, relatable, solution-oriented service.

Thanks to its captive model, CHI and its subsidiary, Optima, eliminate or greatly reduce operating expenses while enhancing the revenue stream. These savings, in turn, are passed on to CHI owners. Since Optima’s inception 21 years ago, it has saved CHI owners more than $5 million in operating costs by capturing commissions on Optima brokerage products.

Exploring New Environments

By the new millennium, CHI health care professional liability insurance was also sold through outside brokers for the first time in the company’s history. CHI then expanded its market to physician groups and its territory to northern Nevada. In 2005, the Silver State’s largest health care system, Renown Health, became an owner.

In 2007, CHI owners were again rewarded with their first ever premium rebate checks. “Premium rebates checks are always a blessing.” Says Dr. Steven Packer. “First because they are an indication that our organization is performing well in our risk management efforts and providing excellent health care outcomes. But, also because those dollars can definitely be put to more direct use within our facility.”

A winning concept knows no boundaries. Hospitals, physician groups and long term care entities throughout the western United States have expressed interest in joining CHI. CHI has achieved the necessary registration and is currently exploring new relationships in Washington, Oregon, Idaho, and Alaska.

CHI became the first health care professional liability insurance carrier to offer: consistent premium holidays/rebates, lower claim loads for claims staff, an innovative and targeted risk management program, in-house brokerage to serve owners and control of insurance operations and policy terms.

Survival of the Fittest Provider

Thirty years later CHI rules the health care professional liability insurance waters, as the longest continually-operating carrier in California. Other major carriers have come and gone, and some have even come and gone again. But the concept of a policyholder-owned insurance company — one that provides its policyholders or insureds with control over their insurance products, stable pricing, premium holidays/rebates, proactive risk management programs and aggressive claims management — is now the dominant species in the marketplace.

The innovation that has defined CHI’s first 30 years is what will lead to its continued success in the years ahead. As California hospitals face the challenges of the national health care reform, CHI and our owners will continue to be the driving force for sensible and sustainable initiatives that will lead to new opportunity. As we celebrate our first 30 years, CHI salutes the pioneering, visionary hospital leaders and their willingness to go against industry norms to create a successful, financially stable health care professional liability insurance company.

  • 1988
  • 1989
  • 1990
  • 1991
  • 1992
  • 1993
  • 1994
  • 1995
  • 1996
  • 1997
  • 1998
  • 1999
  • 2000
  • 2001
  • 2002
  • 2003
  • 2004
  • 2005
  • 2006
  • 2007
  • 2008
  • 2009
  • 2010
  • 2011
  • 2012
  • 2013
  • 2014
  • 2015
  • 2016
  • 2017
  • 2018


Original formation of risk retention group (California Hospital Insurance Company, Inc., a Risk Retention Group) by nine California hospitals (12/22/88)


First CHI policies written (4/1/89)


First year of profitability


First Risk Management Leadership Retreat is held


First premium holiday distributed; First A.M. Best rating (B+)


Optima Health Care Insurance Services (Optima) formed as wholly-owned management and brokerage company subsidiary; A.M. Best rating increased to B++; developed and memorialized core values: Honesty, Integrity, Trust, Respect and Client-Centered and core purpose: “To Make a Positive Difference in Health Care”


Registered to do business in Nevada; expanded ownership base to include physician groups; name changed to California Healthcare Insurance Company, Inc., a Risk Retention Group; CHI is offered through outside brokers for the first time; Risk Management Obstetrics initiative started


Expanded coverage options to include Employment Practices Liability (EPL)


Optima website is developed; monthly Risk Management Filter e-publication launched via website


Expanded ownership base to include long term care entities


A.M. Best rating increased to B++ with a positive outlook; P-XCEL (Obstetrics) project initiated with Mainstream Health


First Nevada owner joins; A.M. Best rating increased to A-


First premium rebate distributed


Purchase of corporate office building in Roseville, California; CHI recognized in Captive Review magazine article on the 50 “most influential” RRGs as #6


Developed first annual Professional Liability Claims Benchmark Report in collaboration with Aon.


Registered to do business in Oregon; Lessons Learned publication developed


Registered to do business in Alaska & Washington; surplus exceeds $50M (Financial Size Category of VII); CHI’s differentiating factors developed = CORE (Culture + Ownership = Results)


Formally changed “Risk Management Leadership Retreat” to “Owners Retreat” with integrated enterprise-wide risk management focus; produced the first Employment Practices Liability Claims Benchmark Report for owners with EPL coverage


Risk Management EPL initiative started; issued the first “official” Nevada Healthcare Insurance Company, a Risk Retention Group (NHI) policies to Nevada owners; CHI won the annual “Award of Excellence” from the Hawaii Captive Insurance Council for its “commitment and contributions to Hawaii’s captive industry”


Registered to do business in Idaho