MEDICAL MALPRACTICE INSURANCE; MALPRACTICE; INSURANCE (GENERAL);

INSURANCE - MALPRACTICE;

You asked how many insurance companies write medical malpractice insurance in Connecticut; what percentage of doctors does CMIC write; did other companies recently leave the Connecticut market, and if so, why?

According to John Purple, Chief Actuary of the Connecticut Insurance Department, five insurance companies write medical malpractice insurance for Connecticut doctors. They are CMIC, a Connecticut-based company established by Connecticut doctors; Doctors Insurance Exchange, a California company; Medical Protective, an Indiana-based company; ProSelect, a Massachusetts company; and Truck Insurance Exchange, a California company.

Purple indicated that CMIC writes malpractice insurance for around 60% of Connecticut’s doctors. ProSelect is the second largest insurer, and writes insurance for around 20%.

Another company, Executive Risk Specialty, provides malpractice insurance for Connecticut’s hospitals and other medical facilities and their employees, but does not provide insurance for individual doctors.

Purple indicated that five to six years ago, five other companies also wrote malpractice insurance for Connecticut doctors. They were Saint Paul, Continental Casualty, American Health Care, PHICO, and Medical Inter Insurance Exchange of New Jersey (MIIX).

According to Purple, at the time it withdrew from Connecticut, St. Paul was the leading malpractice insurer nationwide and was the second biggest medical malpractice insurer in Connecticut behind CMIC, and wrote malpractice insurance for between 30% and 40% of Connecticut’s doctors. St. Paul withdrew from the medical malpractice market entirely, not only in Connecticut, because it no longer found it to be a profitable business.

Similarly, Continental Casualty and American Health Care stopped writing medial malpractice insurance in Connecticut and in every other state they had been active in.

PHICO was a Pennsylvania-based company that became insolvent. It wrote medical malpractice insurance primarily in Pennsylvania, New Jersey, and New York. Medical Inter Insurance also became insolvent. It wrote most of its medical malpractice business in New Jersey.

PHICO and MIIX had expanded their medical malpractice business into Connecticut and other states in the early to mid-90s because medical malpractice insurance was very profitable at the time. In order to generate business, those companies wrote business at or below market prices. This price competition caused other companies to cut or not increase their rates.

This price competition was a major reason St. Paul stopped writing malpractice insurance because it believed the premiums were insufficient to cover the anticipated losses.

GC: ro