Over the last five years, the amount the major medical malpractice insurers have collected in premiums has more than doubled, while their claims payouts have remained essentially flat, according study entitled "Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry." released on June 7.
The Center for Justice & Democracy commissioned the report while the Alliance for Justice, Center for Justice & Democracy, Consumer Federation of America, Public Citizen, USAction, and U.S. PIRG released it.
According to a press release, "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.
Jay Angoff, author of the study, former State of Missouri Insurance Commissioner, said, �The leading 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.�
J. Robert Hunter, Director of Insurance for the Consumer Federation of America, which co-released the report, said, �Doctors and consumers deserve to see the facts behind the true crisis, which is that insurance companies are price-gouging their doctors, not an explosion in claims.� Hunter is the former Texas Insurance Commissioner and Federal Insurance Administrator.
"Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry" analyzes each of the 15 largest AM Best-rated medical malpractice insurers in the United States and is based entirely on data from Annual Statements filed under oath with state insurance departments. It finds:
About the Study:
Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry was prepared by former Missouri Insurance Commissioner Jay Angoff and was commissioned by the Center for Justice & Democracy (CJ&D;). The report was co-released by several national consumer organizations: CJ&D;, Alliance for Justice, Consumer Federation of America, Public Citizen, USAction and U.S. PIRG.
Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry is an analysis of the 2000-2004 performance of each of the 15 largest AM Best-rated malpractice insurers in the United States. The companies analyzed include both investor-owned stock companies, such as AIG-affiliate Lexington Insurance Company, and doctor-owned mutual companies, such as ISMIE Mutual Insurance Company in Illinois. All are well-established companies with long claims history.
For more information, contact the Center for Justice & Democracy.