Insurance law allows state veto

Insurance law allows state veto
Bill covers doctors’ malpractice rates.

Published Tuesday, July 11, 2006

JEFFERSON CITY (AP) - The Missouri Insurance Department will have more information and control over medical malpractice insurance rates under legislation Gov. Matt Blunt signed yesterday.

The bill gives the state insurance director authority to veto medical malpractice rates that are excessive, inadequate or "unfairly discriminatory."

But unlike past proposals, it doesn’t set thresholds for what rates are considered excessive, and rates don’t require the director’s approval before taking effect. Instead, they must just be reported to the director, who can reject them, using a variety of criteria.

Among them, rates are supposed to be based as much as possible on an insurer’s Missouri claims experience, not losses elsewhere. Investment decisions, along with inflation and geographic area, also can be considered.

Supporters say this year’s legislation is the second phase of efforts to keep doctors in the state by bringing down what they pay for malpractice insurance. Last year, lawmakers approved new caps on court judgments as part of several changes to the civil litigation system.

"The primary reason medical malpractice insurance costs are so high is excessive litigation," Blunt said. "This is a positive step to help ensure that we have good data. It is a step we can take to control those costs."

Both doctors and insurance groups also said yesterday that while they expect the lawsuit limits passed last year will have more of an impact on doctors’ insurance costs, this bill also helps.

"The tort reform measure was the key issue. But this was a good companion bill that should stabilize rates," said C.C. Swarens, executive vice president of the Missouri State Medical Association, which represents doctors.

The bill requires insurance companies to provide more information about how they set rates to the state.

It requires the state to publish market information for various risk types and a comparison of base rates for the largest medical malpractice insurance companies.