Center for Justice & Democracy - July 7, 2005 study

http://centerjd.org/

IV. Conclusion

The Annual Statement data for 2004 indicate that many of the leading malpractice insurers have increased their premiums substantially while (1) their actual claims payments decreased, (2) they reduced the amount they projected they would pay out in the future, and (3) their surplus increased substantially. Doctors are therefore paying more for malpractice coverage
than either actual payments in malpractice cases or estimated future payments in malpractice cases would justify.

“The numbers underscore the need for much tougher, more aggressive oversight to Prevent and punish profiteering,” Connecticut Attorney General Richard Blumenthal said. “Federal and state regulators should thoroughly scrutinize 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 Connecticut and nationwide. Insurance 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 Missouri Attorney General Jay Nixon. “There is no excuse for malpractice insurers doubling their rates while their claims payments decrease.”

Michigan Office of Financial and Insurance Services Commissioner Linda A. Watters said, “We are definitely disturbed by the numbers in this report, 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 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.