CREDIBILITY GAP BETWEEN MALPRACTICE INSURERS AND REGULATORS?

Abstract

Minnesota insurance regulators said that a study of thousands of medical malpractice claims in three states shows that medical insurers overcharged the state's doctors for malpractice insurance while the number and severity of malpractice claims was actually dropping. In a report to the Minnesota legislature yesterday, state Commerce Department officials said they studied every medical malpractice claim filed in Minnesota and North and South Dakota from 1982 to 1987. Michael Hatch, Minnesota's commerce commissioner, said the study showed that malpractice premiums rose some 300% while the number of claims and the amount that insurers paid to claimants was falling. A spokeswoman for St. Paul Cos., the nation's largest underwriter of medical malpractice insurance and one of two companies that write such insurance in Minnesota, called the state's findings "inaccurate" and "meaningless." She said an outside actuary hired by the company had also found the state's study flawed. Mr. Hatch called the state's study "airtight." Minnesota said average payouts on claims fell from $22,906 in 1982 to $7,550 in 1987. St. Paul said its figures showed payouts rose between 1978 and 1987 from an average of $23,000 to $120,000, including litigation costs.