Illinois Dept. of Financial Regulation Orders Malpractice Insurer to Reduce Rates
In the wake of the medical malpractice bill passed by the General Assembly last summer, Illinois largest medical malpractice insurer, ISMIE, was recently ordered to reduce rates charged to Illinois doctors. The medical malpractice reform law capped awards on non-economic damages, but also implemented new insurance regulation. As a result of these new regulations, ISMIE was subject to hearings regarding their corporate governance and rate increases last fall.
As a result of those hearings, the Illinois Department of Financial and Professional Regulation required ISMIE to implement and disclose the following:
-establish a dividend return program to return excess dividends or premiums to doctors
-cap the average premium rate increase for 2006-2007 and set a target rate of reduction of 3.5%
-give deep discounts to doctors who participate in education programs designed to improve quality of health care; and
-provide extensive date on how ISMIE establishes its rates and determines risks.
These new regulations constitute substantial reform in the malpractice insurance industry in Illinois. This type of regulation, and not limiting victims' rights by capping damages, will reduce the malpractice premiums charged to doctors.