Oklahoma Insurance Commissioner Carroll Fisher cut in half the increase doctors would initially face under a rate change requested by Physicians Liability Insurance Co. for its medical malpractice policies, giving physicians time to reportedly better absorb the hike.
PLICO requested an 82.8 percent increase in medical malpractice insurance rates following several years of multi-million dollar losses in the line. Fisher conducted a hearing on the matter Tuesday, Nov. 18.
Fisher said reviews of the filing made by him personally, his staff and outside consultants showed that the increase is necessary for the long-term stability of the company. However, testimony at the hearing and a series of letters sent by doctors around the state reportedly indicated the large change would be difficult to absorb.
“The requested change is actuarially sound and will be needed in the years to come,” Fisher said. “Phasing in the rate change is both feasible and reasonable, and it demonstrates to all concerned that we have looked at every option possible.”
He complimented the company and its management for working long and hard to make malpractice insurance available at the lowest possible price. Claims have reportedly just out- stripped the company’s premiums.
“I believe it is absolutely necessary that steps be taken to improve PLICO’s reserves,” Fisher said. “At the same time, making its insurance rates so high doctors can not afford coverage does not help the company or the state.”
Under the Fisher plan, PLICO’s rates would reportedly increase 39.5 percent the first year, 15 percent the second year and 14 percent the third. He noted that the second and third year increases could be adjusted when new information becomes available.
The second- and third-year increases could be altered if expenses have changed, Fisher said. For example, jury awards and settlements could continue to escalate, which may necessitate greater increases in the second and third years. However, tort reforms passed by the legislature could lower costs allowing the future increases to be reduced, he said.
“We will continue to work with the company to evaluate its premium needs, reserving requirements and financial stability to ensure its rates are the fairest possible,” he said.
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