PROFESSIONLoss estimates in liability study disputedClaims of inflated estimated losses are based on flawed data, the AMA says, and the best way to control premiums is through tort reform.By Amy Lynn Sorrel, amednews staff. Feb. 13, 2006. Recent studies by consumer groups have stirred debate over the liability insurance crisis, claiming insurers are to blame for inflating estimated losses to justify rate hikes. But physician groups and insurance industry experts call the reports misleading at best and continue to advocate tort reform to combat skyrocketing premiums. Physicians also have issued reports refuting the consumer groups' findings. Using data compiled from insurers' annual statements, the Foundation for Taxpayer and Consumer Rights issued a report in December 2005 that found that from 1986 to 1994, insurers reported to state regulators initial estimated losses of $39.5 billion, but actually paid out 30.4% less than that, $27.5 billion. Physicians Insurers Assn. of America President Lawrence Smarr said the report authors "cherry-picked" the years studied. He said data from the same source the study used show that in later years, insurer payouts actually exceed estimates. Smarr called the study an attempt to "take the tort reform train off the track" by shifting blame onto the insurance industry. Carmen Balber, consumer advocate at the Foundation for Taxpayer and Consumer Rights, said the group doesn't expect insurers to be on the money with estimates. But she said when estimates "are consistently higher, there is clearly something wrong with the formula." [...]Full text of American Medical News content is available to AMA members and paid subscribers.
Copyright 2006 American Medical Association. All rights reserved.
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