HCS SCS SB 905 & 910 -- MEDICAL MALPRACTICE INSURANCE

SPONSOR:  Engler (Yates)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Insurance
Policy by a vote of 13 to 0.

This substitute changes the laws regarding malpractice insurance.
In its main provisions, the substitute:

(1)  Allows limited liability companies, corporations, limited
liability partnerships, partnerships, and other entities formed
for the practice of law or medicine to become members of an
association providing malpractice insurance to its members;

(2)  Requires the malpractice association's articles of
association and bylaws to specify and define the types of
assessments its members and former members might have to pay to
cover losses and expenses incurred by the association;

(3)  Makes associations writing malpractice insurance subject to
reporting, notification, and rating requirements;

(4)  Requires the Director of the Department of Insurance to
establish risk reporting categories and reporting standards for
insurers to annually report medical malpractice insurance
premiums, loss, exposure, and other information the director may
require.  The director will compile this information in a manner
appropriate for assisting medical malpractice insurers in
developing future base rates, schedule rating, or individual risk
rating factors and other aspects of their rating plans;

(5)  Requires the director to annually establish and publish a
market rate reflecting the mean of the actual rates charged for
each risk reporting category and publish comparisons of the base
rates charged by each insurer;

(6)  Allows the director to issue administrative orders and seek
other remedies specified in the substitute to assure compliance
for violations of the provisions relating to reporting medical
malpractice information;

(7)  Prohibits medical malpractice insurers from charging rates
that are excessive, inadequate, or unfairly discriminatory.
Rates will be based upon Missouri loss experience if available,
not experience from other states unless the failure to do so will
jeopardize the financial stability of the insurer; and

(8)  Prohibits an insurer from increasing malpractice insurance
rates by more than 15% or refusing to renew a policy without at
least 60 days' written notification unless requested by the
insured or due to changes in the insured's practice or risk
characteristics.  Insurers cannot cease issuing policies in this
state without 180 days' written notice to the insured and the
director.  If an insurer fails to give notice, the policyholder
has the right to continue coverage under the policy.

FISCAL NOTE:  No impact on General Revenue Fund in FY 2007,
FY 2008, and FY 2009.  Estimated Cost on Other State Funds of
$123,563 in FY 2007, $120,524 in FY 2008, and $123,555 in
FY 2009.

PROPONENTS:  Supporters say that the bill will help decrease the
cost of medical malpractice insurance.  Doctors are leaving the
state because of the high cost of insurance.  Reporting and
publishing of the rates companies charge will help consumers to
be informed and shop around for insurance.  It will also help to
increase competition.

Testifying for the bill were Senator Engler; Department of
Insurance; Missouri State Medical Association; Missouri
Association of Trial Attorneys; Missouri Academy of Family
Physicians; Missouri State Chiropractors Association; Eastern
Missouri Psychiatric Society; and Missouri Association of
Osteopathic Physicians and Surgeons.

OPPONENTS:  Those who oppose the bill say that there are too many
reporting requirements.  Tort reform is already helping to
stabilize the market and to increase competition.  The bill will
force rate increases, and no one will enter a market that is over
regulated.

Testifying against the bill were Missouri Insurance Coalition;
American Insurance Association; and Missouri Physicians Mutual.

Marc Webb,  Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:46 am