November 28, 2006

Crain's
Via e-mail

To the Editor:

Crain’s Nov. 27 th article featured commercial medical liability insurers declaring “it’s the ability to crunch ISMIE’s numbers that is spurring rate competition, not the caps on malpractice payouts.” If this is true, then why did one such insurer’s recent rate reduction announcement directly attribute its Illinois expansion not only to increased access to ISMIE data, but also to “tort reforms [that] have together improved our ability to predict losses and refine our pricing”? Of interest is that this insurer’s 32% rate decrease merely leveled its 2007 premiums to ISMIE’s current base rates.

Insurers know through experience that meaningful medical litigation reforms, if allowed to take hold, will bring stability to our medical liability market. In addition to their newfound presence in Illinois, several of these companies also write business in states where liability caps have been upheld. Take a glance at their rates for states with reforms in place, in comparison to those of pre-reform Illinois. You’ll see firsthand that medical liability caps do indeed work.

While ISMIE reduced average premiums by 5.2% earlier this year, we also had to raise rates for the corporate liability policies we offer to medical practices. This reflects the increased risk of medical corporations being sued separately (in addition to the individual doctors within them), by plaintiff attorneys looking for “deep pockets” to fund bigger and bigger awards.

In spite of these challenges, ISMIE’s 30-year presence in a tumultuous medical liability market has been steadfast. Allow me to reiterate that we at ISMIE welcome the competition. We hope these enterprises are committed to staying. All too often, doctors have been left holding the bag with little or no options to turn to for liability insurance protection.

Sincerely,

Harold L. Jensen, M.D.
Chairman, ISMIE Mutual Insurance Company

Twenty North Michigan Avenue, Suite 700   Chicago, Illinois 60602   Web site: www.isms.org
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