I don’t know, I suppose I got it from this line in the article:
“The state insurance department said the latest rate hike was lower than insurance companies wanted and “is necessary to avoid further financial deterioration of the companies and perhaps an irreversible crisis in an already severely distressed market.’
In case you aren’t aware, the NY DOI isn’t prone to granting rate increases unless substantial evidence can be shown for the need and even then the granted increase is usually far below that actually required.
Furthermore, there are only four companies writing Medical Malpractice Insurance in NY for physicians and surgeons (all non-profit), none of which are A.M. Best Rated which is a huge red flag.
The state’s largest Medical Malpractice Carrier, Medical Liability Mutual Insurance Company has reported cumulative net losses of almost $1 billion over the past three years. During that time policyholder surplus has dropped from almost $500 Million to $160 Million. $160 Million might sound like a lot of money, but when it must support the risk associated with almost $600 million of annual written premium it isn’t nearly enough. The company has almost $5 Billion in loss reserve liabilities. Just a 3.5% adverse development in those reserves (not uncommon in Med Mal) would render the company technically insolvent.
To those naysayers that don’t like a premium rate increase of 14%, remember that when insurance company investment returns were sky high and your insurance company had a Net Combined Loss Ration below .95 you didn’t complain when you got NO RATE HIKES !!!
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I don’t know, I suppose I got it from this line in the article:
“The state insurance department said the latest rate hike was lower than insurance companies wanted and “is necessary to avoid further financial deterioration of the companies and perhaps an irreversible crisis in an already severely distressed market.’
In case you aren’t aware, the NY DOI isn’t prone to granting rate increases unless substantial evidence can be shown for the need and even then the granted increase is usually far below that actually required.
Furthermore, there are only four companies writing Medical Malpractice Insurance in NY for physicians and surgeons (all non-profit), none of which are A.M. Best Rated which is a huge red flag.
http://www.ins.state.ny.us/mmialist.htm
The state’s largest Medical Malpractice Carrier, Medical Liability Mutual Insurance Company has reported cumulative net losses of almost $1 billion over the past three years. During that time policyholder surplus has dropped from almost $500 Million to $160 Million. $160 Million might sound like a lot of money, but when it must support the risk associated with almost $600 million of annual written premium it isn’t nearly enough. The company has almost $5 Billion in loss reserve liabilities. Just a 3.5% adverse development in those reserves (not uncommon in Med Mal) would render the company technically insolvent.
Info taken from NAIC:
http://www.naic.org/cis/financialProfile.do
Really, the more I look into this, the more I realize that company is screwed.
To those naysayers that don’t like a premium rate increase of 14%, remember that when insurance company investment returns were sky high and your insurance company had a Net Combined Loss Ration below .95 you didn’t complain when you got NO RATE HIKES !!!