The National Association of Insurance Commissioners (“NAIC”) recently released its Countrywide Summary Of Medical Malpractice Insurance Calendar Years 1991 – 2011 for the entire United States. As stated on its website, the NAIC “is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.”
The NAIC’s Mission is “to assist state insurance regulators, individually and collectively, in serving the public interest and achieving the following fundamental insurance regulatory goals in a responsive, efficient and cost effective manner, consistent with the wishes of its members: Protect the public interest; Promote competitive markets; Facilitate the fair and equitable treatment of insurance consumers; Promote the reliability, solvency and financial solidity of insurance institutions; and Support and improve state regulation of insurance.”
From our evaluation and interpretation of the data provided in the Countrywide Summary, medical malpractice insurance companies enjoyed record profits from 2005 through 2011 as compared to the prior 14 years (based on loss ratios, which are calculated by dividing direct losses plus direct defense and cost containment expenses incurred by direct premiums earned — the lower the loss ratio, the greater amount of earnings by the medical malpractice insurance companies).
While the mean loss ratio over the period from 1991 through 2011 was 84 and the median loss ratio over that same period was 81, the loss ratio in each year from 2005 through 2011 was less than the mean and median loss ratios (ranging from a high of 74.66 in 2005 to a low of 51.02 in 2010). And the trend in loss ratios has been falling since 2001 (calendar year 2001 had the highest loss ratio (126.83) between calendar years 1991 and 2011).
Direct premium earned by medical malpractice companies throughout the United States have risen from $4,974,652,480 in 1991 to $10,296,112,512 in 2011 (direct premiums earned have been consistently over $10 billion in each year from 2003 through 2011). Direct defense and cost containment expense incurred have generally decreased between 2003 and 2011 (from $2,847,849,045 in 2003 to $1,973,170,359 in 2011). And direct losses incurred have also generally decreased between 2003 and 2011 (from $8,459,389,539 in 2003 to $3,655,161,296 in 2011).
What Do These Numbers Mean?
We conclude that the medical malpractice insurance company statistics indicate that the medical malpractice insurance companies in the United States are paying out less in claims and claim-related expenses and at the same time earning more profits even as they continue to push for more so-called “tort reform” measures such as artificial and arbitrary caps (limits) on the amounts that innocent victims of medical malpractice may collect for their injuries and losses.
In short, it appears that the money that should have gone to the victims of medical malpractice to compensate them for their lost wages due to medical malpractice, their medical bills incurred as a result of medical malpractice, and their often permanent pain and suffering that resulted from medical malpractice instead goes into the pockets of the medical malpractice insurance companies.
It also appears that the medical malpractice insurance companies are not passing on the increasing profits they enjoy due to tort reform to the doctors and other health care professionals whom they insure. Nonetheless, the lobbyists for the medical malpractice insurance companies and for the health care industry continue to demand more unfair and barbaric restrictions on the rights of medical malpractice victims to receive fair and adequate compensation for their injuries and losses due solely to the medical negligence of their health care providers.
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