Insurance climate still precarious,' says George Dale
By By Steve Swogetinsky / special to The Star
Oct. 9, 2002
LAUREL The Legislature's compromise bill passed earlier this week to deal with skyrocketing medical malpractice insurance rates is just a piece of the puzzle, says state Insurance Commissioner George Dale.
Whether it will bring companies back to the state and possibly lower rates is still in question, he said.
Dale told Rotarians the weak economy has played a role in the problem. Insurance companies expect to lose money on insurance claims, he said. But they take the premiums and make money back by investing it. Losses in the stock market have caused companies to raise insurance premiums or stop writing all together, he said.
For that reason, many companies do not write insurance policies here, and those that do can set the rates.
As far as the $500,000 cap that has been placed on pain and suffering in medical malpractice awards, Dale said his feelings are mixed.
Dale's office can approve or disapprove rate increases sought by insurance companies.
However, "they can appeal those decisions, or they can decide not to write them anymore," Dale said. "The solution is to create a market where there is competition."
And while medical insurance is on everyone's mind right now, expect home insurance to be the next problem, Dale said.
That will soon be compounded, he said, because a company with about $28 million in policies will soon pull out of the state.