UMIA Obtains Approval for Rate Increase

Utah Medical Insurance Association (UMIA), which provides medical malpractice insurance to Wyoming physicians, has requested and received approval for a 9.6 percent base rate increase for medical malpractice insurance premiums.

UMIA made its request in an Oct. 29 filing with the Wyoming Department of Insurance. The base rate level represents the average of the changes to rates for each physician specialty. That means that a particular doctor, depending on his or her specialty, can receive an increase above or below the overall base rate increase of 9.6 percent. Some specialties will actually receive a premium decrease under the new UMIA rates.

When the Insurance Department received the UMIA filing, officials there sent it to the department’s consulting actuary for review. After considering the actuary’s report and reviewing the filing in detail, Wyoming Insurance Commissioner Ken Vines approved the filing. The actuary reportedly found both the methods and procedures used to develop the rate change and the overall change itself to be reasonable.

UMIA’s new rates also include a 3.4 percent increase for separate liability coverage for doctors’ corporations or partnerships, which makes the overall rate increase 13.3 percent.

In general, the Wyoming Department of Insurance does not have rate authority over insurance premiums. Under the Wyoming Insurance Code, rates for insurance policies are determined by the market. Insurers set the premium rates, and prior approval of those rates by the Insurance Department is not required.

The exception to this general rule is when a certain line of insurance is considered noncompetitive in Wyoming. Medical malpractice insurance for doctors and hospitals has been determined to be noncompetitive in Wyoming because only a limited number of companies sell the insurance in Wyoming. The Insurance Department’s prior approval of medical malpractice rates is required.

If rates are not deemed to be “excessive, inadequate or unfairly discriminatory,” they must be approved under the Wyoming Insurance Code. Insurers must charge rates that are adequate so that reserves will exist in coming years to pay claims.