Insurance Department Reports Lower Med Mal Rate Increases for 2005

Ohio Department of Insurance Director Ann Womer Benjamin announced Wednesday that the medical liability insurance rates of Ohio`s top five medical malpractice insurers, which represent 66% of the market, increased only 6.7% in 2005, following rate increases of 20% in 2004 and about 30% in each of 2002 and 2003. Additionally, Medical Protective Company became the first medical malpractice insurer to lower its overall rates in Ohio in six years after the Department accepted its 5% decrease for 2006. “We have also worked closely with the medical community to help doctors find affordable liability coverage so they can continue to serve Ohio patients," Womer Benjamin said. The National Association of Insurance Commissioners (NAIC) will be issuing its annual profitability report in late January. The report is expected to show 2004 as the first profitable year for Ohio`s medical malpractice insurance industry since 1997. A return to profitability combined with continued stability in loss experience may enable rates to level off and to possibly decrease, similar to those of Medical Protective. The Department has proposed a rule that will require medical liability insurers to justify their rates to the Department every year, even if they plan no changes to them. Medical malpractice non-economic damages were capped in 2003 by tort reform legislation as another measure to control costs, since premiums are driven primarily by claims costs and lawsuit defense and settlement costs. Because insurers look at past data to estimate their future costs when setting rates, the impact of the reform legislation on rates will be clearer in a few years as pending lawsuits have worked through the court system. However, five major companies offering coverage have remained in Ohio despite difficult economic times, and two new companies have formed in Ohio to write medical malpractice insurance for the first time since the early 1990`s.