Insurance Industry Admits Caps Won’t Work

Plans to Keep Price-Gouging Consumers and Doctors Alike

"We have not promised price reductions with tort reform."

~Dennis Kelly, American Insurance Association spokesman, Chicago Tribune, January 3, 2005.

"There is no question that it is very rare that frivolous suits are brought against doctors. They are too expensive to bring."

~Victor Schwartz, General Counsel of the American Tort Reform Association, Los Angeles Times, October 22, 2004.

“Non-economic damages are a small percentage of total losses paid. Capping non-economic damages will show loss savings of 1.0%.”

~GE Medical Protective regulatory filing with Department of Insurance (TDI), October 30, 2003. The revelation was contained in a document submitted by GE Medical Protective to explain why the insurer planned to raise physicians’ premiums 19% a mere six months after Texas enacted caps on medical malpractice awards.

"I don't like to hear insurance-company executives say it's the tort system - it's self inflicted."

~Donald J. Zuk, chief executive of Scpie Holdings Inc., a leading malpractice insurer in California, Wall Street Journal, June 24, 2002.

"No responsible insurer can cut its rates after a [medical malpractice tort 'reform'] bill passes."

~Bob White, President of First Professional Insurance Company, the largest medical malpractice insurer in Florida, talking about a proposed $250,000 cap in the January 29, 2003 Palm Beach Post.

"I don't think we would argue that the premiums are likely to go down. We believe it will have the effect of reducing the increases in the future. And one of the reasons the premiums won't go down is that even if noneconomic damages are capped, the losses for economic loss, medical expenses, for example, are still in this current environment escalating at, medical inflation is running in the double digits. I forget exactly what it was last year. So even if you were to cap noneconomic damages, the economic damages will still cause acceleration in the premiums. So it would not go down, I want to clarify if I misspoke and said I thought the premiums would go down."

~Cliff Webster, representing the Washington State Medical Association & Chairman of the Washington Liability Reform Coalition, testifying before the Washington State Legislature, House Judiciary Committee, Feb. 21, 2003.

"Insurers never promised that tort reform would achieve specific premium savings..."

~From a press release published March 13, 2002, by the American Insurance Association (AIA).

"[M]any tort reform advocates do not contend that restricting litigation will lower insurance rates, and 'I've never said that in 30 years.'"

~Victor Schwartz, General Counsel of the American Tort Reform Association, as paraphrased and quoted in "Tort Reforms Don't Cut Liability Rates, Study Says," published in Business Insurance July 19, 1999.

"We wouldn't tell you or anyone that the reason to pass tort reform would be to reduce insurance rates."

~Sherman Joyce, President of the American Tort Reform Association, as quoted in "Study Finds No Link Between Tort Reforms and Insurance Rates," Liability Week, July 19, 1999.

"Insurance was cheaper in the 1990s because insurance companies knew that they could take a doctor's premium and invest it, and $50,000 would be worth $200,000 five years later when the claim came in. An insurance company today can't do that."

~Victor Schwartz, general counsel to the American Tort Reform Association, "Dose of Legality," Honolulu Star-Bulletin, April 20, 2003.

"While MICRA was the legislature's attempt at remedying the medical malpractice crisis in California in 1975, it did not substantially reduce the relative risk of medical malpractice insurance in California."

~James Robertson, Assistant Vice President and Associate Actuary, SCIPIE Indemnity Company (California's second largest medical malpractice insurer), in written testimony responding to a question from an administrative law jugdge who is overseeing a case in which SCIPIE has requested a 15.6 % rate hike. April 30, 2003.