AIA: NC. Senate Med-Mal Bill Lacking

September 18, 2003

The American Insurance Association (AIA) announced that the North Carolina Senate approved a medical malpractice bill that the association believes falls short of the goal of comprehensive medical liability reform. S. 802 passed on a 27-19 vote along party lines at the end of a two-day special session called by the Senate, with the chamber’s Democrats casting all 27 votes in favor of the measure.

“Although the Senate bill includes some positive provisions, it excludes meaningful tort reforms that could bring stability back to North Carolina’s medical liability insurance market,” said Raymond Farmer, AIA assistant vice president, southeast region. “In addition, the bill imposes new regulatory obstacles for carriers writing in the state, increasing the burden of doing business.”

On the positive side, the bill includes a pre-trial “referee” provision that requires a panel of experts to determine before a trial starts but after the discovery phase whether malpractice occurred, providing guidance to the jury should either party decide to proceed to a trial. The bill also allows insurers to satisfy damage awards through the use of periodic payments.

Unfortunately, the positive provisions in the bill are outweighed by increased insurer reporting requirements, a move to a prior approval (from file and use) system for rate filings, and restrictions on data insurers can include in their rate filings.

As this issue moves to the House in the coming months (North Carolina’s regular 2004 session commences in May), AIA will continue to support legislation that includes major tort reforms that will restore fairness and predictability to the medical liability system. These reforms include a cap on non-economic damages, limits on attorney fees, and offsets for reimbursement from collateral sources, among others.

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