Attorneys General and one state Insurance Commissioner responded with strong
statements condemning the actions by insurers to dramatically raise
insurance rates for doctors while claims are dropping.
"The numbers underscore the need for much tougher, more aggressive oversight
to prevent and punish profiteering,"
recent rate increases and take appropriate corrective action. Affordable
medical malpractice insurance is critical to public health. Expensive
insurance rates become a matter of life and death when they drive doctors
out of business - as is happening in
company greed can be hazardous to our health."
"The data in the Annual Statements filed under oath with state insurance
departments, which this Report discloses, call into question much of what
the medical malpractice insurance industry has been saying publicly during
the past several years," said
no excuse for malpractice insurers doubling their rates while their claims
which offers evidence that doctors may be paying excessive premiums. In the
market competition study that we recently issued, we considered loss ratios
below 50 percent as patently excessive. If these carriers truly have loss
ratios that are this low and yet they are still increasing rates, one has to
wonder if they're gouging."
Medical malpractice insurance rates for doctors have skyrocketed in recent
years even though, as this study now confirms, claim payments are down.
These findings suggest that doctors have been price-gouged for several years
as insurance industry profits have ballooned to unprecedented levels. AIG,
under investigation by state and federal authorities for its business
practices, and HCI, a subsidiary of HCA, the largest for-profit hospital
chain, are among the worst offenders.
Falling Claims and Rising Premiums in the Medical Malpractice Insurance
Industry's conclusions are based upon an examination, for the first time, of
statements supplied under oath to state insurance departments by the
nation's top medical malpractice insurers. The study reveals that the
insurance industry has been overcharging doctors significantly despite the
fact that their claims payments, in real terms, have dropped since 2000.
Moreover, contrary to the impression they have given the doctors and the
general public, the "losses" that medical malpractice insurers predict they
will pay in the future - the insurers' purported basis for current rate
hikes - are down as well.
malpractice insurers' Annual Statements indicate that they have been raising
their premiums even though both their actual claims payments and their
projected future claims payments have been falling. The Annual Statement
data thus prove that doctors have been overcharged during the last several
years. Those overcharges are obviously bad news for doctors, but they have
resulted in good news for investors in the leading pure malpractice
insurance stocks, which have doubled during the last three years while the
stock market as a whole has remained flat."
which commissioned the report, stated, "To put it bluntly, if you look at
what the insurance companies say about why they raise premiums, and then
look at the data in this report, the numbers just don't add up. The facts
are very simple: medical malpractice payouts are down yet insurance
companies have significantly increased premiums. This shows that the entire
campaign to limit liability for doctors over the last several years by
capping compensation to injured patients has been a fraud, and that based on
these data, insurers must know that it has been a fraud."
The following companies are examined in the report: Lexington Insurance
Company; GE Medical Protective Company; The Doctors Company; ISMIE Mutual
Insurance Company; Health Care Indemnity, Inc.; Mag Mutual Insurance
Company; Medical Assurance Company; ProMutual Group; First Professional
Insurance Company; State Volunteer Mutual Insurance Company; Norcal Mutual
Insurance Company; ProNational Insurance Company; Continental Casualty
Company; American Physicians Capital, Inc.; and Evanston Insurance Co.
For more information and a copy of the study, contact the Center for Justice