Any “crisis” that may have existed in the medical malpractice insurance industry
is now reported to be officially over according to a recent study released by the non-
profit group Americans for Insurance Reform (AIR). According to this report, rates of
medical malpractice insurance coverage have seen a “wholesale collapse” across the
In February, the New York-based Consumer Advocacy Coalition released a
report which shows that the insurance industry has entered a market that features
lower premium rates and more competition. Over the past six months, insurance rates
for doctors have remained steady in every state–even in those without medical
malpractice caps on the amount of damages injured parties may receive.
Among the study’s findings were the following:
1. An independent insurance rating agency found that in states with medical
malpractice caps on damages that injured victims can obtain, doctors’
insurance rates rose more than in those states without caps.
2. Total compensation paid to medical malpractice victims fell 11.2 percent
between 2001 and 2002.
3. Growth in premium rates for all types of commercial insurance has slowed
to a “stand still”.
4. The slow down in insurance rates has occurred despite the impact of
Hurricane Katrina on the insurance industry.
The AIR report points out that the insurance industry has been prone to
“volcanic eruptions” in premiums due to lower investment income being earned by the
insurance companies investing their premium dollars. Each time this occurs the study
notes, the insurance companies and the health care industry have tried to cover up
their mis-managed underwriting by blaming victims’ lawyers and legal system. The
AIR report recommended that legislators and regulators look for new solutions to rate
spikes linked to the insurance cycle. As with its predecessors, the most recent
insurance crisis had absolutely nothing to do with the U.S. legal system, tort laws,
patients, lawyers, or juries, the report goes on to note.