Malpractice Insurer Switching Lines To Raise Rates
Dallas Morning News
08:33 PM CDT on Saturday, April 10, 2004
Associated Press
HOUSTON – A large medical malpractice insurer plans to bypass Texas regulators to raise insurance rates for doctors.
GE Medical Protective will increase the cost of premiums 10 percent on June 1 by switching from a rate-regulated line of insurance to one that doesn't require state approval.
The carrier, which insures about 7,000 of the state's 38,000 physicians, said it factored the future cost of claims into its decision. It said it would have had to drop coverage for some physicians if it had not made the switch, the Houston Chronicle reported.
State officials had balked at the company's request to raise rates by 19 percent.
The move is a setback for Texas Insurance Commissioner Jose Montemayor and the supporters of Prop. 12, which sought to curb the soaring malpractice insurance costs by capping noneconomic damages in medical liability cases. Voters narrowly approved the measure in September.
The state insurance department estimated physicians could save between 8.5 percent and 11.5 percent on premiums if Proposition 12 passed. So far, however, only one of five major insurers in Texas has agreed to lower its rates.
Jay Thompson, outside counsel for GE Medical Protective, said not all policyholders will face 10 percent premium increases. Doctors who have been free of claims, for example, may see smaller increases.
