Teaming up to challenge the near doubling of medical malpractice insurance premiums by GE Medical Protective, Connecticut Attorney General Richard Blumenthal, the Connecticut State Medical Society and the Connecticut Trial Lawyers Association have again called on Connecticut Insurance Commissioner Susan Cogswell to hold a public investigation of the rate hike.
“If you want to lower insurance rates, you need to investigate the insurance companies,” said consumer advocate Douglas Heller, the executive director of Foundation for Taxpayer and Consumer Rights. “With doctors, lawyers and law enforcement teaming up to demand insurance company accountability, Connecticut could pave the way toward real savings for physicians.”
In July 2004, GE Medical Protective, one of the nation’s largest medical malpractice providers, implemented an 89.6 percent rate hike on its doctors. The rate hike for GE Medical Protective Insurance Company (MedPro) went into effect for physicians July 1, after it was cleared by the Connecticut Insurance Department.
However, last August the Connecticut Trial Lawyers Association, joined by two consumer groups and an individual doctor, asked Cogswell to halt the increase and review what they maintain is an “excessive” and “unconscionable” price increase.
Cogswell agreed to hire an independent actuary to review the rates but has not held public hearings as some had requested after the hike took affect.
The state medical society, in its recent letter, urged Cogswell to open up hearings to doctors and the public because “many insured physicians have raised concerns as to the manner in which the rate was established by MedPro, especially in light of their reported loss ratio experience.”
The critics hired their own actuary to review MedPro’s filing. They maintain that the insurer did not use any of its own Connecticut or nationwide experience in establishing its latest rates, but instead referenced the rates being used by a competitor, Connecticut Medical Insurance Co., the state’s largest writer.
MedPro’s filing indicated that its own claims experience in Connecticut was too small to be reliable in rate-setting. The company writes only about 225 physicians in the state.
“I’ve seen them do this elsewhere,” said actuary Allan Schwartz, of AIS Risk Consultants Inc., in Freehold, N.J., who reviewed the filing on behalf of the critics. “If the state experience is favorable, they ignore it. It appears there is a bias going on here.”
Schwartz said his analysis shows that MedPro was making a “very high” profit of almost 50 percent in Connecticut—even before it sought to hike its rates by 90 percent.
MedPro spokesman John Novaria said last fall that his company believes its request is “entirely justified” and would defend it and cooperate with the insurance department.
MedPro’s Novaria acknowledged that his firm’s filing referenced Connecticut Medical Insurance Co.’s data because “we felt it would be irresponsible to base it on our own data” given that MedPro has such a relatively new and small market share. MedPro entered the state in 1999 and writes about 225 physicians who pay $11 million in premium in the state, while CMIC writes about $45 million.
Medical Protective is today part of the GE Insurance Solutions family of companies. It writes more than 80,000 doctors and dentists nationwide with an emphasis on insuring “select” professionals.
MedPro enjoys high financial ratings. Standard & Poor’s has awarded it an “A+” (Strong), while A.M. Best assigned it an “A-” (Excellent) rating.
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