West Zone: California Orders MedMal Cuts

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Insurance Chronicle

The California insurance commissioner has ordered the state’s second largest medical malpractice insurer, SCPIE Indemnity, to slash its proposed rate increase for doctors by 36% percent after an eight-month regulatory investigation of the firm’s rate request.

The ruling was in response to the first- ever consumer group challenge to a medical malpractice insurance rate hike request, brought by the Foundation for Taxpayer and Consumer Rights (FTCR), a California nonprofit organization.

Instead of the company’s proposal for a 15.6% increase that would have gone into effect on January 1, 2003, the commissioner John Garamendi will only allow SCPIE and its affiliate, American Healthcare Indemnity, to increase premiums by 9.9% beginning Oct. 1.

The net impact is a $16 million savings for the insurers 9,000 physicians in 2003 and an additional $7.2 million of savings in next year’s premiums.

Consumer Watchdog
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