More Price Gouging By Insurance Companies
While the insurance industry spends millions of dollars lobbying Congress for limits on compensation for malpractice victims, a new study shows the industry has consistently overstated its payouts by billions of dollars.
The Foundation for Taxpayer and Consumer Rights (FTCR) examined the official filings that malpractice insurers submit to state insurance commissioners and found that over a 9-year period, the amount insurers reported they would pay out on policies was 46% more -- approximately $12 billion - than what they actually did pay to victims.
The malpractice insurance industry grossly overstated its payouts every year in the 9-year period FTCR examined, and in one year, overstated payouts by 66%.
"By manipulating their books to misrepresent their 'losses', the insurers have profited in two ways. First, they have used the inflated numbers to justify rate increases that were unnecessary and excessive. Second, they have invoked their exaggerated loss estimates to promote legislation allowing these insurers to limit how much compensation they have to pay out to victims of medical negligence," said FTCR's Harvey Rosenfield.
Read more here.