Illinois’ Medical Malpractice Carrier Insurance Record Profit
Illinois’ largest medical malpractice insurance carrier made a record $57 million profit in 2012— two years after the Illinois Supreme Court struck down a law capping damages in jury verdicts. This is a far cry from the insurance industry’s doomsday predictions after the 2010 ruling. ISMIE Mutual Insurance Co., the largest medical malpractice insurance company in Illinois, saw its net income for 2012 at a 20 year high; and this is after sending a $17 million dividend to its 12,000 policy holders.
ISMIE’s chairman, Dr. Harold Jensen, attributed the success to fewer frivolous lawsuits and flattening malpractice rates, calling this “practical proof” that the $500,000 cap on non-economic damages has been working in the five years it’s been in effect. The company’s mammoth profit is largely thanks to investment gains. In other states, where there are award caps on settlements, the medical liability industry is also experiencing a long soft market—the rising costs of filing malpractice suits, and more stringent risk-management practices by doctors and hospitals (to limit errors) have encouraged this trend.
The Chicago area has one of the most expensive malpractice insurance markets for physicians; ISMIE’s 2012 base premium for internists in Cook county was $37,688 for policies with limits of $1 million per occurrence and $3 million annually. The yearly base premium for general surgeons was $98,888, and $138,484 for obstetrician-gynecologists. In a soft market, like the current market state, physicians have more choices in insurers, and their premiums drop slightly. ISMIE remains one of the most expensive carriers—but in a good year (like 2012), it commits dividends, in the form of premium credits, back to its policyholders. Some experts say the real cost of 2012’s insurance business won’t be revealed for several years, as lawsuits filed in 2012 remain unsettled, and could potentially drag on for years.
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