Today’s Washington Post has this article about another study of the medical malpractice insurance industry.
The study shows that insurer’s overestimated their losses from 1986 until 1994 by almost 50%.
Insurance companies are permitted to estimate losses today on claims that will be paid in the future. This study shows that the companies tend to overestimate what they will pay in the future. Companies often use these estimates to support claims for restrictions on the rights of malpractice victims.
The industry response? The study “selectively uses years when the industry overestimated its losses and ignores more recent years when the industry wound up paying more than it reported initially to regulators. Lately, they add, insurers’ losses have outstripped estimates from only a few years ago.”
Or, in other words, “yeah, we were wrong before but believe us now.”
I do agree with this statement in the article: “Fueling frustration on all sides: a surprising lack of data available from the nation’s patchwork system of state regulation. Two years ago, the Government Accountability Office studied the problem and said that although insurance losses ‘appeared to be the greatest contributor’ to higher premiums, a ‘lack of comprehensive data . . . prevented us from fully analyzing the composition and causes of those losses.’ The study concluded that Congress ‘may want to encourage’ state regulators to collect data on ‘the frequency, severity and causes of losses on medical malpractice claims.'” I have been made the “lack of data” argument since 1986. It is shocking how little accurate information exists and how legislators simply accept the insurance industry’s word.
Then again, the FWDVA (Future Wrongful Death Victims of America)doesn’t have a lobbyist or a PAC.