Connecticut Medical Negligence Lawyers

Alternative Markets Have Also Been Increasing In Connecticut In The Form Of Risk Retention Groups, Captives And Self-Insurers

Currently there are three traditional insurance companies writing physicians and surgeons medical malpractice liability coverage in Connecticut. Last year, the Insurance Department explored the reasons why malpractice insurance companies were not offering policies in Connecticut. We found that insurance companies were withdrawing from the medical malpractice market nationwide. The trend is toward smaller regional carriers and provider-owned medical malpractice insurers, based upon the overall insurance and legal environment of a state or states, as well as, the insurance company's ability to control exposures. Companies indicated to us that they were not interested in writing medical malpractice insurance in Connecticut unless there was significant tort reform.

Alternative markets have also been increasing in Connecticut in the form of risk retention groups, captives and self-insurers. However, the cost drivers that originally created the need for the alternative markets have not been addressed. Therefore, if the market is allowed to continue in its present state with no meaningful reform, some of these alternatives offering medical malpractice insurance liability, when faced with a few large claims, could potentially become insolvent.

This bill (1) would put stricter requirements on insurance companies to ensure that rates do not rise any higher than absolutely necessary. The Department supports the prior rate approval provision which (a) requires any company offering professional liability insurance for physicians and surgeons, hospitals, advanced practice registered nurses, or physician assistants be subject to prior approval; (b) requires that companies seeking a rate increase of 10% or greater notify the Department and policy holders 60 days in advance of the effective date of the rate; and (c) enables insureds to request a public hearing. Currently, medical malpractice companies operating in Connecticut submit their rates to the Insurance Department prior to their effective date. This allows the Department time for actuarial review and analysis in advance of the rates going into effect. Putting prior rate approval into statute would, therefore, codify current practice.

This bill also provides for (2) periodic payments of medical malpractice judgments of $200,000 and over. This provision can be expected to result in cost savings to insurers because of investment income earned over the time period when the payments are made; and (3) reducing the offer of judgment penalty assessed on defendants for failing to settle certain lawsuits from 12% of damages to the prime rate. We believe this will have an impact on reducing costs.

These initiatives will aid in stabilizing the medical malpractice marketplace and make it an attractive place for companies currently doing business and, more importantly, attract new companies to the marketplace

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