TX GOP in League with Insurers'
Texas Democrats, claiming Republicans are more sympathetic to insurance companies than to consumers, plan to pursue regulatory reforms to curb the rise of insurance premiums. According to the Fort Worth Star-Telegram, Texas House Rep. Lon Burnham, D-Fort Worth, expects Republicans in the Legislature to resist efforts to enact insurance rate regulation proposals in the upcoming session, as they have in the past. Along with Texas House candidate Nancy Stevens, state Senate candidate Hal Ray, and U.S. congressional candidate Felix Alvarado, Burnham called for a 10 percent insurance rate rollback, as well as a reformation of the Texas Department of Insurance so that the commissioner would be elected rather than appointed by the governor. The group also decried loopholes which they contended have allowed insurers to raise rates without public hearings. Texas GOP spokesman Ted Royer countered that Democrats' unwillingness to stop what he called frivolous lawsuits by trial lawyers is the primary reason for increasing insurance rates. He also contended that Insurance Commissioner Jose Montemayor, appointed by Gov. George Bush and then reappointed by Gov. Rick Perry, has levied millions of dollars in fines to insurers on behalf of Texas consumers. Both political parties acknowledged that rate increases should be reigned in, however; Rep. John Smithee, R-Amarillo, chairman of the House insurance committee, believes Gov. Perry should call a special session to address the crisis.
La. Auto Rates Rising
Citing increasing medical and repair costs, a weak stock market, and the effects of state laws enacted in 1998, Louisiana insurance regulators anticipate a rise in auto rates in their state. The Times-Picayune reports that State Farm, which writes some 35 percent of auto policies in Louisiana, requested a rate hike of between 16 and 21 percent; other carriers are expected to make similar requests. State Farm reported more than $450 million in losses for 2000 and 2001, as well as $41 million through April 2002; the company hopes to recoup some of these losses through $151 million in rate increases—16 percent for customers covered by State Farm Mutual and 20.9 percent for those covered by State Farm Fire and Casualty. Such increases would add an average of $144 a year to standard and $232 for high-risk policyholders. According to Acting Insurance Commissioner J. Robert Wooley, auto rates had been kept artificially low for six years, and that the LIRC has shown trepidation when it comes to raising them again. Two state laws that went into effect in 1998—a "no-pay, no-play" law that excludes the first $10,000 of claims from being paid to uninsured drivers in accidents and another that authorizes police to seize license plates of drivers without proof of auto liability insurance—have proven effective, according to Wooley. The no-pay, no-play law has reportedly reduced auto rates in Louisiana by $120 million since it took effect.
WC Guidelines Under Fire
The Texas Medical Association (TMA) and the Texas AFL-CIO have filed a lawsuit to prevent adoption of new workers' compensation guidelines by the Texas Workers Compensation Commission (TWCC). The Houston Chronicle reports that the groups believe the new workers' comp fee schedule, intended to lower the cost of such coverage, will reduce the quality of health care for injured workers. The suit, filed in Travis County state district court, aims to stop the rules from taking effect Sept. 1. According to Dr. Fred Merian, TMA president, the new fee schedule will drive many doctors out of the workers' comp system. The fee schedule's rates use reimbursement price controls for Medicare to lower the cost of workers' comp claims. Many business groups, favor the new guidelines, contending that the current system overcompensates health care providers compared to group health plans and Medicare. The Texas Association of Business argues that employers in the state pay 50 percent more per claim than the national average—and that many employers will likely drop out of the workers' comp system if rates remain unchanged. According to the Chronicle, Gov. Rick Perry came out against the guidelines, warning they could threaten the availability of workers' comp care.
Oklahoma Agent Suspended
Wewoka, Okla.-based insurance agent, Julius Rice, had his license suspended following allegations that his agency did not forward insurance applications to carriers whose policies he sold to consumers. According to Oklahoma Insurance Commissioner Carroll Fisher, one insurance company for which Rice sold policies contacted the Oklahoma Insurance Department after 35 applications were received from the agency, some as many as 33 days old. The company's guidelines specify that policy applications must be forwarded within 48 hours. In one case, Rice's agency issued a security verification card to a client on May 10, but the client found she had no insurance after she was involved in an accident May 23. After the matter was reported to state regulators, it was discovered that a number of Rice's clients hold security verification cards issued by his agency but have no insurance. In addition, Rice has allegedly allowed two employees at his agency to work without licenses. Rice may not conduct any business, including selling insurance or accepting payment for policies already issued, while the suspension is in effect. He has until August 2 to request a hearing on the issue.
TX Court Limits Med-Mal Exposure
The Texas state Supreme Court placed limits on health care providers' medical malpractice exposure under the Medical Liability and Insurance Act by subjecting prejudgment interest to a cap on damages. A.M. Best reported that the court ruled 6-3 in Columbia Hospital Corp. vs. Moore et al. that the cap on damages stipulated by the 1977 law does pertain to prejudgment interest in liability claims related to the death of a patient. The court considered a 1995 amendment to the law—subchapter P, which mandates prejudgment interests for past damages, not future damages—in making its decision. Additionally, it maintained that prejudgment interest entailed a form of damage intended by the Legislature for inclusion in the cap stipulated by the Medical Liability and Insurance Act. The defendant in the case, Columbia Bellaire Medical Center, faced the estate of Katherine Moore, who died after undergoing surgery at the center in 1996. A trial court jury found that causal negligence existed between Columbia and the two treating doctors involved, and it awarded $3 million in damages. The defendant's actual damages liability later was reduced to $1.3 million, but a lower court added $300,487 in prejudgment interest to the capped amount. The Supreme Court's ruling found the decision to exclude the prejudgment interest from the amount to be capped was in error.
TX GOP in League with Insurers'
Texas Democrats, claiming Republicans are more sympathetic to insurance companies than to consumers, plan to pursue regulatory reforms to curb the rise of insurance premiums. According to the Fort Worth Star-Telegram, Texas House Rep. Lon Burnham, D-Fort Worth, expects Republicans in the Legislature to resist efforts to enact insurance rate regulation proposals in the upcoming session, as they have in the past. Along with Texas House candidate Nancy Stevens, state Senate candidate Hal Ray, and U.S. congressional candidate Felix Alvarado, Burnham called for a 10 percent insurance rate rollback, as well as a reformation of the Texas Department of Insurance so that the commissioner would be elected rather than appointed by the governor. The group also decried loopholes which they contended have allowed insurers to raise rates without public hearings. Texas GOP spokesman Ted Royer countered that Democrats' unwillingness to stop what he called frivolous lawsuits by trial lawyers is the primary reason for increasing insurance rates. He also contended that Insurance Commissioner Jose Montemayor, appointed by Gov. George Bush and then reappointed by Gov. Rick Perry, has levied millions of dollars in fines to insurers on behalf of Texas consumers. Both political parties acknowledged that rate increases should be reigned in, however; Rep. John Smithee, R-Amarillo, chairman of the House insurance committee, believes Gov. Perry should call a special session to address the crisis.
La. Auto Rates Rising
Citing increasing medical and repair costs, a weak stock market, and the effects of state laws enacted in 1998, Louisiana insurance regulators anticipate a rise in auto rates in their state. The Times-Picayune reports that State Farm, which writes some 35 percent of auto policies in Louisiana, requested a rate hike of between 16 and 21 percent; other carriers are expected to make similar requests. State Farm reported more than $450 million in losses for 2000 and 2001, as well as $41 million through April 2002; the company hopes to recoup some of these losses through $151 million in rate increases—16 percent for customers covered by State Farm Mutual and 20.9 percent for those covered by State Farm Fire and Casualty. Such increases would add an average of $144 a year to standard and $232 for high-risk policyholders. According to Acting Insurance Commissioner J. Robert Wooley, auto rates had been kept artificially low for six years, and that the LIRC has shown trepidation when it comes to raising them again. Two state laws that went into effect in 1998—a "no-pay, no-play" law that excludes the first $10,000 of claims from being paid to uninsured drivers in accidents and another that authorizes police to seize license plates of drivers without proof of auto liability insurance—have proven effective, according to Wooley. The no-pay, no-play law has reportedly reduced auto rates in Louisiana by $120 million since it took effect.
WC Guidelines Under Fire
The Texas Medical Association (TMA) and the Texas AFL-CIO have filed a lawsuit to prevent adoption of new workers' compensation guidelines by the Texas Workers Compensation Commission (TWCC). The Houston Chronicle reports that the groups believe the new workers' comp fee schedule, intended to lower the cost of such coverage, will reduce the quality of health care for injured workers. The suit, filed in Travis County state district court, aims to stop the rules from taking effect Sept. 1. According to Dr. Fred Merian, TMA president, the new fee schedule will drive many doctors out of the workers' comp system. The fee schedule's rates use reimbursement price controls for Medicare to lower the cost of workers' comp claims. Many business groups, favor the new guidelines, contending that the current system overcompensates health care providers compared to group health plans and Medicare. The Texas Association of Business argues that employers in the state pay 50 percent more per claim than the national average—and that many employers will likely drop out of the workers' comp system if rates remain unchanged. According to the Chronicle, Gov. Rick Perry came out against the guidelines, warning they could threaten the availability of workers' comp care.
Oklahoma Agent Suspended
Wewoka, Okla.-based insurance agent, Julius Rice, had his license suspended following allegations that his agency did not forward insurance applications to carriers whose policies he sold to consumers. According to Oklahoma Insurance Commissioner Carroll Fisher, one insurance company for which Rice sold policies contacted the Oklahoma Insurance Department after 35 applications were received from the agency, some as many as 33 days old. The company's guidelines specify that policy applications must be forwarded within 48 hours. In one case, Rice's agency issued a security verification card to a client on May 10, but the client found she had no insurance after she was involved in an accident May 23. After the matter was reported to state regulators, it was discovered that a number of Rice's clients hold security verification cards issued by his agency but have no insurance. In addition, Rice has allegedly allowed two employees at his agency to work without licenses. Rice may not conduct any business, including selling insurance or accepting payment for policies already issued, while the suspension is in effect. He has until August 2 to request a hearing on the issue.
TX Court Limits Med-Mal Exposure
The Texas state Supreme Court placed limits on health care providers' medical malpractice exposure under the Medical Liability and Insurance Act by subjecting prejudgment interest to a cap on damages. A.M. Best reported that the court ruled 6-3 in Columbia Hospital Corp. vs. Moore et al. that the cap on damages stipulated by the 1977 law does pertain to prejudgment interest in liability claims related to the death of a patient. The court considered a 1995 amendment to the law—subchapter P, which mandates prejudgment interests for past damages, not future damages—in making its decision. Additionally, it maintained that prejudgment interest entailed a form of damage intended by the Legislature for inclusion in the cap stipulated by the Medical Liability and Insurance Act. The defendant in the case, Columbia Bellaire Medical Center, faced the estate of Katherine Moore, who died after undergoing surgery at the center in 1996. A trial court jury found that causal negligence existed between Columbia and the two treating doctors involved, and it awarded $3 million in damages. The defendant's actual damages liability later was reduced to $1.3 million, but a lower court added $300,487 in prejudgment interest to the capped amount. The Supreme Court's ruling found the decision to exclude the prejudgment interest from the amount to be capped was in error.
