Malpractice Insurer Seeks Approval For Rate Cut
By DIANE LEVICK, Courant Staff Writer
http://www.courant.com
The Medical Protective Co., a malpractice insurer that raised its Connecticut rates nearly 90 percent three years ago, plans to reduce rates an average 24.2 percent and insure more physicians in the state.
The company, which is known as “MedPro” and was acquired in June 2005 by Warren Buffett’s Berkshire Hathaway Inc., is seeking approval for the rate cut from the Connecticut Insurance Department. It would take effect Aug. 1.
The rate reduction follows a trend in many states that began about two years ago when malpractice premiums – which had been soaring – began to level off. Some companies around the nation have reduced rates in certain states.
In Connecticut, the Connecticut Medical Insurance Co. has been holding rates steady.
“The Connecticut medical malpractice environment continues to be a volatile market,” with an average claim cost that’s higher than the national average, Medical Protective said in a letter to the Connecticut Insurance Department. “Nevertheless, we believe that disciplined underwriting, outstanding claims administration, and a well-researched and actuarially sound rate level will provide the foundation upon which MedPro can profitably grow in the state.”
MedPro currently insures 103 doctors in Connecticut, according to the Insurance Department.
Insurance Commissioner Thomas R. Sullivan called the proposed rate reduction “a positive step for the Connecticut medical malpractice insurance marketplace.”
The department said in a statement that it still must review MedPro’s proposed rates, but noted, “So far, it appears that MedPro has the financial and actuarial analysis to support their request.”
The company told the department its new rate filing is based on six years of its own claim data and data from Connecticut Medical Insurance Co. and ProSelect Insurance Co. Access to previously unavailable data has “given us more confidence in our rate structure,” MedPro said.
Not all Connecticut doctors insured by MedPro will see a 24.2 percent rate decrease because premiums vary by specialty, and the insurer is making changes to the classifications.
MedPro’s nearly 90 percent rate increase in 2004 prompted unsuccessful challenges by the Connecticut Trial Lawyers Association and consumer advocates. Regulators hired an outside actuarial firm to review the proposed rates, which were deemed to be justified.
Neil Ferstand, executive director of the lawyers’ association, voiced hope about MedPro’s new rate filing, noting the sharp rise in rates in past years.
“Maybe this is a portent for a slide in the other direction,” Ferstand said. “I hope we see reductions from some of the other insurers in the state.”
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