New York State
Insurance Department 

 DEPARTMENT SETS MEDICAL MALPRACTICE RATES FOR PHYSICIANS FOR 2ND YEAR IN A ROW, MOST DOCTORS WILL SEE NO RATE INCREASE

 New York, July 23, 1997

Governor George E. Pataki and Superintendent of Insurance Neil D. Levin today announced that for the second year in a row, the majority of New York State’s 31,000 doctors will see no increase in their medical malpractice insurance premiums for the rating period that began July 1.

The Department has approved an average 0% rate change for 1997. This comes on the heels of an average 6.2% rate reduction approved in 1996.

"I’m pleased we have made high-quality health care affordable and therefore, more available to New Yorkers," Governor Pataki said. "Medical malpractice insurance had risen at exorbitant rates under the previous administration, increasing the cost of health care. We’ve stopped that trend by lowering rates, saving hard-working New Yorkers money on health care costs."

"This is good news for both doctors and consumers," said Superintendent Levin. "We want to ensure that medical malpractice insurance remains available so that victims of malpractice can be adequately compensated. By keeping rates unchanged this year, we are also keeping health care costs in check since they are impacted by the cost of medical malpractice insurance."

Medical Liability Mutual Insurance Company (MLMIC) provides coverage to the majority of doctors in New York State (about 57% percent of the medical malpractice premiums written in the marketplace). There is no overall rate change for MLMIC. In addition, there is no rate change for Frontier Insurance Company (about 6% percent of the market), Medical Malpractice Insurance Association (3% market share), and Academic Health Professionals (1% of the medical malpractice premiums).

However, because of specialty classification changes, some doctors with these companies will see a rate decrease and some doctors will see a rate increase.

Group Council (6% of the market) has no rate change. Physicians Reciprocal Insurers (PRI), which has 25% of the market’s malpractice premiums, was granted an overall average 4% rate increase.

An analysis of medical malpractice experience shows a general decrease in the dollar amount of medical malpractice awards (severity of claims), while the frequency of medical malpractice claims continues to rise. The Insurance Department believes that it can keep rates for most doctors unchanged while still ensuring that the medical malpractice system in New York State remains adequately funded.

In addition, the Insurance Department has reduced the rates for the Excess Medical Malpractice Pool. The Superintendent is announcing that the rate for this excess layer of coverage is being reduced by 18 percent, or approximately $26 million dollars. The money to pay for this excess layer will not come from hospital rates charged to patients as in the past but will instead come from reserves of medical malpractice funds.

In order to moderate medical malpractice rate increases, legislation was enacted in 1986 giving the Superintendent the authority to establish stabilized malpractice rates for doctors.

The following table illustrates the medical malpractice rate changes established by the Department for physicians over the last 5 years:

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