MORE EVIDENCE THAT THE CONNECTICUT MEDICAL SOCIETY AND THE FAIRFIELD COUNTY MEDICAL SOCIETY CAN'T DO THE JOB

Physicians throughout Connecticut continue to complain about their medical malpractice premiums being too high and find it easy to blame lawyers and their injured patients who bring claims for wrongdoing by healthcare providers for driving up their premiums. This is the equivalent of telling a critically sick patient to "take two aspirins and call me in the morning." These very bright people should apply their collective intelligence and diagnose the real problem. If they did that, they would find the problem is GREEDY INSURANCE COMPANIES. No surprise.

What is surprising however, is that wealthy doctors are willing to fund the Connecticut State Medical Society and the Fairfield County Medical Society, paying the salaries of staff and huge sums to lobbyists who are always asleep at the switch. Last year, when one insurance company sought a rate increase against the doctors, there wasn't a peep from the medical profession. Instead, the Connecticut Trial Lawyers Association commissioned an actuarial study that demonstrated that the rate increase was unjustified and the Insurance Commissioner, after considering all of the evidence, denied the increase. Effectively, consumers and the doctors were represented by the Trial Lawyers Association.

Now again, CMIC, the physician owned and controlled insurance company, has been exposed for gouging its own members. A recent report from the same actuary that documented last year's data before the Insurance Commissioner has now documented that CMIC has been enjoying excessive profits; a high level of surplus growth; a surplus that is disproportionately high in relation to the premiums charged; and has engaged in a persistent pattern of reporting excessive reserves which would actually tend to reduce the stated level of profit artificially as well as to reduce taxes paid to the governement.

This matter was the subject of the following news article in The [Hartford] Courant today:

http://www.courant.com/news/health/hc-docrates1018.artoct18,0,6749243.story?coll=hc-headlines-health

Medical Insurer Under Fire

Trial Lawyers Ask For State's Help

By DIANE LEVICKCourant Staff Writer

October 18 2006

Trial lawyers are asking regulators to consider seeking a rollback of malpractice rates at Connecticut Medical Insurance Co., saying the premiums for doctors appear excessive in light of the company's profits and surplus.

Carl D. Anderson, president of the Connecticut Trial Lawyers Association, sent a letter Tuesday to Insurance Commissioner Susan F. Cogswell urging a "thorough examination" of Connecticut Medical's malpractice rates.

The Glastonbury-based insurer didn't raise rates for 2006 and isn't planning any across-the-board increase for 2007, though about 5 percent of policyholders could see some increase or decrease based on their risk classification.

ProMutual Group, which insures just over 3,000 doctors and other medical professionals in Connecticut, isn't planning a rate increase here either for 2007.

Anderson noted that the state insurance department last year rejected a rate increase by ProMutual Group. In a statement Tuesday, he said the department should take action again to "ensure that companies, like CMIC and ProMutual, do not continue to gouge doctors with unreasonably high rates - while guaranteeing ever increasing profits for their insurance company."

Debra J. Korta, a spokeswoman for Cogswell, said the department wouldn't comment Tuesday because it hadn't yet reviewed Anderson's letter or an actuary's report commissioned by the trial lawyers' association.

Allan Schwartz, the report's author and president of AIS Risk Consultants Inc. in Freehold, N.J., said that a double-digit rate reduction - maybe 10 percent or more - would be "consistent with the high level of profit [Connecticut Medical is] showing." Schwartz said he can't give an exact number based on the publicly available data from the company.

Connecticut Medical officials could not be reached for comment Tuesday. The company covered about 2,500 physicians in 2004, but an updated number could not be obtained Tuesday.

Trial lawyers have been clamoring for lower medical malpractice premiums in recent years for at least two reasons. The lawyers want to make sure the insurance remains available and affordable to physicians because it's a source of money for malpractice victims and attorneys' fees.

In addition, the lawyers object to caps on pain and suffering damages and don't want high premiums to be used to justify them. So far, Connecticut legislators have not passed such limits on damages, despite heavy lobbying by physicians and insurers.

Now trial lawyers see an opportunity to reduce premiums.

Schwartz's report, which covers 2004 through June 30 of this year, says Connecticut Medical's net income is "highly excessive" in relation to earned premiums. The company shows a "consistent pattern of over-reserving" for claims, and its surplus - the financial cushion - is "disproportionately high" in relation to premiums, the report says.

However, rating agencies look at surplus too, among other measures, and Connecticut Medical has only the fifth highest financial health rating - B++ ("very good") - from A.M. Best Co.

Connecticut Medical's annual report shows net income - bottom-line profit - of $12.5 million for 2005, up from $7.6 million in 2004. The company noted that 2005 results benefited from $3.3 million of realized capital gains on investments, and from funds set aside in previous years, but no longer needed, to pay claims.

"Doctors have the right to expect their premiums will reflect the fact that this particular carrier is doing extremely well," Anderson said.

Attorney General Richard Blumenthal echoed the call for a review of Connecticut Medical's rates after the trial lawyers sent him copies of Anderson's letter and Schwartz's report.

"The levels of profit seem astonishingly high compared with the gloom and doom reports that insurers have given the public about how unprofitable this business is," Blumenthal said. "Medical malpractice no longer seems to be the poor sibling among insurance lines."

Copyright 2006, Hartford Courant

Is your legislator one who has been duped by the insurance industry and the medical profession?

Stewart M. Casper, Esq.
Casper & de Toledo LLC
1458 Bedford St.
Stamford, CT 06905
203-325-8600

www.casperdetoledo.com