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MS 18-Wheeler Wreck - Four Deaths
18 Wheeler Wreck
Free expert help.
New Orleans Saints Super Bowl Tailgate
New Orleans Saints Super Bowl Tailgate
New Orleans Saints Super Bowl Tailgate
New Orleans Saints Super Bowl Tailgate
New Orleans Saints Super Bowl Tailgate
New Orleans Saints Super Bowl Tailgate
New Orleans Saints - Super Bowl?
Jay Foster going to the Super Bowl With the Saints
Picayune Car Wreck Deaths
Picayune Car Wreck Deaths
Supreme Court Rules On Katrina Case
MS Supreme Court Rules - Hurricane Katrina Case
How To Buy American Made Products
How To Buy American Made Products
Follow Attorney Jay Foster on Twitter
Attorney Jay Foster starts Twitter Account
MS Car Wreck Or Accident - Death
Mississippi Car Wreck Death
MS Car Wreck Or Accident - DUI Death
Carter's Wreck Kills Woman
MS Car Wreck Or Accident - Grandma Dies
Mississippi Car Wreck or Accident - Jackson County Grandmother Dies
Mississippi Car Wreck - Death in Pascagoula
Mississippi Car Wreck Or Accident, Pascagoula Man Dies
MS Car Wreck Or Accident - Wreck Due to Drugs
MS Car Wreck Or Accident - Wreck Due to Drugs and Speeding
MS 18-Wheeler Wreck - Another Wreck
MS 18 Wheeler Wreck on Highway 49 in Mississippi
MS Car Wreck Or Accident - DUI Death
MS Car Wreck Or Accident - DUI Death
MS Car Wreck Or Accident - Death
Mississippi Car Wreck Death In Long Beach, Mississippi
MS 18-Wheeler Wreck - Regulations
MS 18-Wheeler or Truck Wrecks or Accidents - Regulations
MS Car Wreck Or Accident - Death
MS Car Wreck or Accident - Death
MS Car Wreck Or Accident - Casey Aldridge
MS Car Wreck or Accident - Casey Aldridge
MS Car Wreck Or Accident - Casey Aldridge
MS Car Wreck - Casey Aldridge Fractured Skull
MS Car Wreck Or Accident - Death
MS Car Wreck Death in Ocean Springs, Mississippi
MS Car Wreck Or Accident - Officer Injured
MS Car Wreck Or Accident - Officer Injured
MS 18-Wheeler Wreck - Inspections
MS 18-Wheeler Wrecks - Inspections
MS Trucking Accident
MS Trucking Accident Ocean Springs
MS 18-Wheeler Wreck - Another Death
MS 18-Wheeler Wreck - Another Death
Judo Throw Of A Robber
Judo Throw Of A Robber
MS Car Wreck Or Accident - Drowning Heroes
Ms Car Wreck Or Accident - Drowning Heroes
MS Car Wreck Or Accident - Crossing Lane Death
MS Car Wreck Or Accident - Crossing Into The Wrong Lane Causes Death In DeLisle
MS Car Wreck Or Accident - Drowning Deaths
MS Car Wreck or Accidents - Drowning Death
MS Car Wreck or Accident - Another Death
Another Car Wreck Death
MS Car Wreck Or Accident - Bad Day For the Driver
MS Driver Wrecks Into Police Car
MS Car Wreck Or Trucking Accidents - Blog
MS Car Wreck Or Trucking Accidents - Blog
MS Car Wreck Or Accident - Ocean Springs
MS Car Wreck Or Accident - Ocean Springs
Mississippi Car Wreck or Accident - Speeding
Mississippi Car Wreck or Accident - Speeding
Mississippi Car Wreck or Accident - Wreck In Gulfport Injuries Twelve People
Mississippi Car Wreck or Accident - Wreck In Gulfport Injuries Twelve People
Mississippi Car Wreck or Accident - Uninsured Motorist Insurance
Mississippi Car Wreck or Accident - Uninsured Motorist Insurance
Our Veterans Deserve Better
This is an column about the sad way our Veterans have been treated.
Trucking Accidents and Truck Drivers Sleep Apnea Dangers
Trucking Accidents and Truck Drivers Dangers of Falling Asleep While Driving
Robert Bork Files Law Suit
Robert Bork, who has consistently railed against jury trials in America, files his own law suit.
Did State Farm Fire Engineers Who Attributed Hurricane Damage to Wind?
State Farm May Have Fired Engineers Who Attributed Hurricane Katrina Damage to Wind
What Should Mississippi Do About the Wind Pool Insurance Problem?
Allstate Made More in Profit in 9 Months Than Mississippi's Entire Budget
We Need Insurance Reform
Ask Your Legislator if They Support This Bill
Hurricane Katrina Insurance Rights Bill - Ask Your Mississippi Legislator If They Support This Bill, It Is Important to Mississippians
Here Is Why Insurance Companies Think They Can Get Away With Denying Your Hurricane Claim
Charlie Ross, who has never met an insurance company he did not like, is one of the primary reasons why Allstate, State Farm, and others believe they can wrongfully deny your Hurricane Claim. Ross says we Mississippians overwhemingly wanted to shoot ourselves in the foot. Is he right? You can decide when he runs for Lt. Governor.
Allstate Falsifies Engineering Reports
Allstate Insurance Company Falsifies Engineering Reports
FBI Investigates Allstate
Think Insurance Companies Lose Money? Think Again.
Allstate Makes Billions Despite Paying Out Billions in Claims
A National Disgrace
Mississippi and Louisiana Still Hurting After Hurricane Katrina
National Highway Traffic and Safety Administration Releases Annual Crash Predictions
For $850.00 Trucking Companies Can Save Lives
For $850.00 Trucking Companies Can Save Lives
Judge Tells State Farm to Produce Hurricane Documents
Circuit Court Judge Orders State Farm to Produce Hurricane Documents
It Is Not Always the Lawyer's Fault
Engineer Says His Report Was Altered by Insurance Company
Trent Lott's Lawyer Says Engineering Report Altered
Hurricane Katrina Engineering Report May Have Been Altered
Mississippi Attorney General Investigates Fraud By Insurance Companies
Jim Hood, Mississippi's Attorney General Investigates Fraud by Insurance Companies
Mississippi Lawyers Work For Free
In Mississippi, lawyers from across the State donate many hours each year to working for free for those who cannot afford an attorney.
Jay Foster's Community Involvement and Free Legal Help
Free Legal Help and Other Help for People in Mississippi
Mississippi Attorney General versus Insurance Companies
This case concerns the Mississippi Attorney General's law suit filed against the Insurance Companies regarding unlawful practices associated with Hurricane Katrina Insurance Claims.
Enormous Profits for Insurance Companies in Florida After All Hurricanes
Do not let the insurance companies gouge us again. Many Mississippi residents are discovering that Insurance Companies are going to try and raise their homeowner's insurance again. Yet, in Florida, despite the numerous hurricanes hitting this State in the past few years, the insurance companies are still having record profits.
NTSB concludes poor track maintenance caused Flora, Miss. train wreck
Feds lease oil drilling rights three miles from MS Gulf Coast
Mississippi to distribute free gunlocks to reduce firearms accidents
Doctors Gouged By Insurance Companies Again
Insurance Companies Gouge Doctors Again by Raising Their Medical Malpractice Rates
Feet and Leg Injuries on the Rise in Car Accidents
Guess Who Pays for Medical Malpractice Now?
We all now pay for a Hospital's Medical Malpractice
Criminal Insurance Companies
Once again, criminal insurance companies are to blame, not consumers or lawyers.
More Insurance Company Lies
Insurance Companies Love to Use These Lies So They Can Justify Gouging all Consumers and Personal Injury Lawyers
Insurance Companies Gouge Doctors Again
Insurance Companies Gouge Doctors on their Medical Malpractice Insurance Premiums
Why Are your Insurance Rates So High? Here's Why.
Insurance Companies Raise Our Insurance Premiums Because of Their Bad Investments
Tort Reform Forces Doctor to Close Practice
Tort Reform Forces Doctor to Close Practice
Medical Mistakes Kill 44,000 to 98,000 People a Year
Death by Doctors
Doctor Sues and Gets $400 Million
Doctors have no problem in filing law suits when their rights are violated, why can't you do the same?
Corrupt Insurance Companies
Insurance Companies Sue for Fraud
Do You Know Why Insurance Rates are So High? Here's Why.
AIG Insurance Company Pleds Guilty to Bid Rigging.
Insurance Company Commits Fraud
Businesses File 4 Times as Many Lawsuits
Businesses File 4 Times as Many Lawsuits as Consumers and They Even File a Lot of Frivolous Lawsuits
Hypocrites
We all have heard that lawyers cause all the problems in society, right? These people all made that claim, EXCEPT when they needed one.
Stop Frivolous Insurance Company Reform
Insurance Companies Get Record Profits Yet Consumers Insurance Premiums Continue to Rise
CEOs of Insurance Companies Get Paid Millions
Insurance Companies Claim They are Not Making Money Yet They Pay their CEOs Millions--We Need Insurance Reform
Insurance Companies Gouge Consumers and Doctors
Caps on Damages Do Not Lower Premiums for Consumers or Doctors, the Insurance Company Still Raises the Premium
Large Settlement for Truck Accident

MS 18-Wheeler Wreck - Four Deaths

Mississippi Trucking Wreck or Accident - Deaths Due To 18 Wheeler

by Jay Foster, Mississippi Trucking Wreck Attorney

A trucking accident caused the deaths of four people on Interstate 59. Read more about this crash on our blog.

If you have questions about this or any other trucking wreck, please call or email Mississippi Trucking Wreck Attorney Jay Foster right now by clicking here.

New Orleans Saints Super Bowl Tailgate

by Jay Foster, Attorney

If you want to go to the New Orleans Super Bowl Tailgate in Miami, you need to pay now as the space is running out. We already had to get a bigger room!

You must go to www.paypal.com and send $21.00 per person to sheilafoster@yahoo.com. Please do NOT send your money anywhere else. We cannot be responsible if you do.

The El Palacio Sports Hotel has a sports bar on the ninth floor so if you do not have tickets, I know that many Saints fans are watching the game there.

If you have questions about this or any other car wreck, please call or email sheilafoster@yahoo.com.

New Orleans Saints Super Bowl Tailgate

by Jay Foster

I have updated the information regarding the New Orleans Super Bowl Tailgate. You can click here to access Jay Foster's Blog for further information.

Also, the direct link to the www.facebook.com page is http://www.facebook.com/#/pages/New-Orleans-Saints-Super-Bowl-Tailgate/277564791471?ref=ts This will have the most updated information on it.

If you have questions about this, please call or email Jay Foster right now by clicking here.

New Orleans Saints Super Bowl Tailgate

New Orleans Saints Super Bowl Tailgate

by Jay Foster, Mississippi Car Wreck Attorney

We have written a new blog about the New Orleans Saints Super Bowl Tailgate. Please go click here to read the blog. This tailgate will be incredible and I want everyone to come to it.

Please read the blog for the time. Of course, the date for the tailgate is the day of the Super Bowl. Also, for the latest news about the New Orleans Saints Super Bowl Tailgate, please go to www.facebook.com and search "New Orleans Saints Super Bowl Tailgate."

If you prefer, you can call me at 228-872-6000 or email me directly.

If you have questions about this, please call or email Jay Foster right now by clicking here.

New Orleans Saints - Super Bowl?

New Orleans Saints - Are We Going To The Super Bowl?

Are the Saints going to the Super Bowl? I do not know. But, I want to know if you are going if they go. Email me and let me know. I may get something special planned for it.

Picayune Car Wreck Deaths

Picayune, Mississippi Car Accident

by Jay Foster, Mississippi Car Wreck Attorney

There were two more unfortunate deaths due to a car wreck in Picayune. Both David Landy and Cleo Shedd died in the accident. If you want more information about this wreck, please follow Jay Foster's Car Wreck Blog by clicking here.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

Supreme Court Rules On Katrina Case

Mississippi Hurricane Katrina Case

by Jay Foster, Mississippi Car Wreck Attorney

The Mississippi Supreme Court ruled in the first Hurricane Katrina case today. You can read more about it in Jay Foster's Blog. I will post the case in the library section of our website so everyone can read it.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

How To Buy American Made Products

How To Buy American-Made Products

One of my favorite websites discusses how we can buy American-made products. An interesting article was written by Roger Simmermaker regarding the influx of foreign-made products which puts American out of work. We are on his email list. We suggest you get on it also.

We have linked this article on our website with his permission. Please click here to read it.

Follow Attorney Jay Foster on Twitter

Mississippi Attorney Jay Foster

by Jay Foster, Attorney

We have started a twitter account and you can follow us on twitter. Please click on the link below to follow us.

If you have questions about this or a personal injury accident, please call or email Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Death

Mississippi Car Wreck or Accident - Death

by Jay Foster, Mississippi Car Wreck Attorney

The Mississippi Highway Patrol has reported the death of an Iuka, Mississippi resident due to a car wreck.

For more information about this accident, please see Jay Foster's Mississippi Car Wreck Blog by clicking on the link.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - DUI Death

Mississippi Car Wreck or Accident - DUI Death In Harrison County

by Jay Foster, Mississippi Car Wreck Attorney

We have another unfortunate death from a driver who was driving while intoxicated and caused a wreck. Autumn Daly died at the scene of this wreck as she was ejected from the car that Charles Carter was driving. Carter was taken to jail for DUI. If you want to read more about this tragic accident, please click here for Jay Foster's Car Wreck Blog about this accident.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Grandma Dies

Mississippi Car Wreck or Accident - Jackson County Grandma Dies

by Jay Foster, Mississippi Car Wreck Attorney

A Jackson County Grandmother, Carol Woods, dies due to a wreck on Allie Byrd Road. For more information about this wreck, please read Jay Foster's car wreck blog by clicking here.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

Mississippi Car Wreck - Death in Pascagoula

Mississippi Car Wreck or Accident - Pascagoula Man Dies

by Jay Foster, Mississippi Car Wreck Attorney

This past weekend, a Pascagoula, Mississippi man died in a head-on wreck. We have more information on our Jay Foster's blog about this wreck.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Wreck Due to Drugs

Mississippi Car Wreck or Accident - Crash Due to Drugs and Speeding - See Jay Foster's Blog

by Jay Foster, Mississippi Car Wreck Attorney

The car crash on Wade-Vancleave Road near the Pascagoula River Bridge in Jackson County, Mississippi that left a Mother dead and her children in intensive care, was due to drugs and speeding. The Jackson County Sheriff reported on this accident recently. If you want more information about this wreck, please click on Jay Foster's Mississippi Car Wreck Blog.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS 18-Wheeler Wreck - Another Wreck

Mississippi Trucking Wreck or Accident - Another Wreck

by Jay Foster, Mississippi Trucking Wreck Attorney

On the border of the Harrison County and Stone County line in Mississippi, another wreck occurred involving not one, but two 18 wheelers. One of the drivers had injuries requiring treatment at the hospital. For more information, please click on Jay Foster's Trucking Accident Blog.

If you have questions about this or any other trucking wreck, please call or email Mississippi Trucking Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - DUI Death

Mississippi Car Wreck or Accident - DUI Death

by Jay Foster, Mississippi Car Wreck Attorney

In Pascagoula, Mississippi, a Pascagoula resident was killed in a drunken driving accident. Angel Angulo Quintana was killed in a wreck. Orlando Pereira Martinez was arrested for driving drunk. Please click on Jay Foster's Mississippi Car Wreck Blog for more information about this wreck.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Death

Mississippi Car Wreck or Accident - Another Death - Long Beach

by Jay Foster, Mississippi Car Wreck Attorney

We have updated our Mississippi Car Wreck or Accident Blog about another car wreck death. This one happened in Long Beach, Mississippi. Please click on the link for more information in our Mississippi Car Wreck Blog.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS 18-Wheeler Wreck - Regulations

Mississippi Trucking Wreck or Accident - Regulations

by Jay Foster, Mississippi Trucking Wreck Attorney

We updated Jay Foster's blog about trucking wrecks involving the Federal Motor Carrier Safety Regulations. Please click on the link to access our blog.

If you have questions about this or any other trucking wreck, please call or email Mississippi Trucking Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Death

Mississippi Car Wreck or Accident - Death

by Jay Foster, Mississippi Car Wreck Attorney

Another car wreck caused the death of a Clinton, Mississippi husband and wife. You can read more about this unfortunate accident by clicking on the link to visit Jay Foster's Car Wreck Blog.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Casey Aldridge

Mississippi Car Wreck or Accident - Casey Aldridge

by Jay Foster, Mississippi Car Wreck Attorney

Jay Foster updated his Mississippi Car Wreck or Accident Blog about Casey Aldridge who was injured in a car accident. He is the boyfriend of Jamie Lynn Spears.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Casey Aldridge

Mississippi Car Wreck or Accident -

by Jay Foster, Mississippi Car Wreck Attorney

Jamie Lynn Spears' boyfriend, Casey Aldridge, was in a car wreck recently. He was hospitalized at the University of Mississippi Medical Center for a brain injury. Please read more about this accident on Jay Foster's car wreck blog.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Death

Mississippi Car Wreck or Accident - Death

by Jay Foster, Mississippi Car Wreck Attorney

Jamie Mallette of D'Iberville, Mississippi died in a car wreck on the Interstate. Read Jay Foster's blog for more information on this accident.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Officer Injured

Mississippi Car Wreck or Accident - Officer Injured

by Jay Foster, Mississippi Car Wreck Attorney

A Jackson, Mississippi policeman was injured in a car wreck on Interstate 20 in Jackson, Mississippi. She was driving a motorcycle at the time of the accident when a car hit her. Officer Ella Small's injuries are fortunately not life-threatening.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS 18-Wheeler Wreck - Inspections

Mississippi Trucking Wreck or Accident - Code of Federal Regulations Requires Pre-Trip Inspections

by Jay Foster, Mississippi Trucking Wreck Attorney

We updated our blog involved pre-trip inspection requirements for truck drivers. The Code of Federal Regulations provides that pre-trip inspections must be conducted by the drivers. Please read Jay Foster's trucking accident blog for further information on this crucial requirement to prevent wrecks involving 18-wheelers.

If you have questions about this or any other trucking wreck, please call or email Mississippi Trucking Wreck Attorney Jay Foster right now by clicking here.

MS Trucking Accident

Mississippi Trucking Wreck or Accident - Hazardous Material

by Jay Foster, Mississippi Trucking Wreck Attorney

A trucking accident on Interstate 10 in Ocean Springs, Mississippi has delayed traffic. The 18 wheeler was carrying flammable material. Please click on the link for Jay Foster's blog about the trucking accident for further information.

If you have questions about this or any other trucking wreck, please call or email Mississippi Trucking Wreck Attorney Jay Foster right now by clicking here.

MS 18-Wheeler Wreck - Another Death

Mississippi Trucking Wreck or Accident - Death Accident

by Jay Foster, Mississippi Trucking Wreck Attorney

Another death in Mississippi involving an 18-wheeler. This week a Picayune woman died after an accident involving an 18-wheeler. The truck driver was treated at Hancock Medical Center and was released.

You can read more about this accident by following Jay Foster's blog on this subject.

If you have questions about this or any other trucking wreck, please call or email Mississippi Trucking Wreck Attorney Jay Foster right now by clicking here.

Judo Throw Of A Robber

by Jay Foster, Mississippi Attorney and Judo Practitioner

This video shows you how powerful Judo is in the real world. It also may teach this thief a lesson the next time he thinks about robbing someone. You just never know if you might try to rob someone who knows Judo. Please click here to watch the video. I hope you enjoy it as I did.

MS Car Wreck Or Accident - Drowning Heroes

Mississippi Car Wreck or Accident - Drowning Heroes

by Jay Foster, Mississippi Car Wreck Attorney

The car wreck in Mississippi yesterday where a driver ran off the road near the Pascagoula River Bridge on Wade-Vancleave road resulted in one Mississippi woman's death. But, as usual, your average, everyday Mississippian responded as heroes and helped rescue her children from certain death. What a testament to our fellow Mississippians to respond this way - helping people who they did not even know.

You can read more about this car wreck by clicking here or visiting the Sun Herald's website.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Crossing Lane Death

Mississippi Car Wreck or Accident -

by Jay Foster, Mississippi Car Wreck Attorney

The car wreck in Mississippi that caused the death of Donna Harper of Pass Christian, Mississippi, was due to a vehicle crossing into the wrong lane. This resulted in a head-on accident that killed Ms. Harper and injured the other driver. Our sympathies are with the families of all involved.

If you want to read more about this story, please click here or visit the Sun Herald's website.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck Or Accident - Drowning Deaths

Mississippi Car Wreck or Accidents - Drowning Death

by Jay Foster, Mississippi Car Wreck Attorney

Tosha Caudillo, who apparently lived in either Jackson County or George County, Mississippi, unfortunately died in a car accident. One of her children also died in the car wreck. Ms. Caudillo's Grandmother was the only person in good condition after the wreck. Caudillo apparently ran off the road at the Pascagoula Bridge and went into the water.

You can read more about this accident by visiting Jay Foster's Blog by clicking here or by visiting the Sun Herald's website.

If you have questions about this or any other car wreck, please call or email Mississippi Car Wreck Attorney Jay Foster right now by clicking here.

MS Car Wreck or Accident - Another Death

Another Death On Kiln-Delisle Road

by Jay Foster, Mississippi Car Wreck Lawyer

Once again, on Kiln-Delisle Road, a driver died. This time it was a head-on accident that killed, Donna Harper of Pass Christian. The Harrison County Sheriff's Department is investigating the wreck. Harper was driving a Ford Escort and was not wearing her seat belt. The other car was a SUV.

You can read more about this crash by visiting Mississippi Car Wreck Attorney Jay Foster's blog by clicking here.

MS Car Wreck Or Accident - Bad Day For the Driver

The Rankin Ledger reported that a car driven by Tonya Goode of Byram, Mississippi ran into a police car on I-20. You can read more about the Mississippi car wreck by visiting the Rankin Ledger website.

If you have questions about this or any other Mississippi Car Accident or Wreck, please click here to call or email attorney Jay Foster right now or visit our blog about the wreck by clicking here.

MS Car Wreck Or Trucking Accidents - Blog

by Jay Foster, Mississippi Car Wreck and Trucking Accident Lawyer

We wanted to announce that we have a new blog which we will try to update at least once a week regarding Mississippi car wrecks and trucking accidents. If you do not want to call or email us, you can feel free to comment on the blog and ask questions about your Mississippi car wreck or trucking accident. It is located at http://jayfosterlaw.blogspot.com/ Please feel free to come by and visit our blog as often as you like. We are also blogging on this website. Thanks.

MS Car Wreck Or Accident - Ocean Springs

A dump truck was rear-ended in Ocean Springs, Mississippi today and two people were injured. The wreck happened in Ocean Springs on Highway 90 at around noon. The injured people were taken to Ocean Springs Hospital for treatment.

If you have questions about this or any other car wreck or accident, please click here to call or email Jay Foster.

Mississippi Car Wreck or Accident - Speeding

Mississippi drivers must be aware of speed as a factor in causing accidents. This past Saturday, a retired employee of the Mississippi IHL died in a wreck in Crystal Springs, Mississippi.

Police investigators indicated that speed may have been the cause of the crash.

Mississippi Car Wreck or Accident - Wreck In Gulfport Injuries Twelve People

The Gulfport Police Department investigated a car wreck when a driver tried to turn on Courthouse Pier. The wreck happened January 17, 2009 at the intersection fo Courthouse Road and Highway 90 in Gulfport. A sports utility vehicle was headed East on Highway 90 when the wreck it hit a Ford Truck turning onto Courthouse Pier.

If you have questions about this or any other car wreck or accident, please click here to call or email Jay Foster.

Mississippi Car Wreck or Accident - Uninsured Motorist Insurance

by Jay Foster, Mississippi Car Accident Lawyer

Almost one third of Mississippi drivers do not have car insurance. It is crucial to make sure your insurance agent is selling you uninsured motorist insurance. Find out why by clicking here right now.

Our Veterans Deserve Better

World War II, Korean War vets plan Washington protest Feb. 12

I'm sure any career military serviceman who served during the Korean War knows all about the pending protest in Washington, D.C., next month. Even so, I thought it's worth repeating for those who may not have gotten the word.

According to a release I received from Col. Dan Cedusky of Champaign, Ill. (Ret.), this is what is being planned:

"On Feb. 12, former career military veterans from across the country will congregate on the steps of the U.S. Supreme Court Building in Washington, D.C., in support of the filing of a lawsuit concerning promised health care.

"In November 2002, the U.S. Court of Appeals reversed the decision of a lower U.S. Court that had authorized World War II and Korean former career military veterans free lifetime health care that was promised and earned as a result of their career military service. After the November court decision, the lawyer representing the retired veterans, retired Air Force Col. George "Bud" Day, a former Vietnam Prisoner of War and a Medal of Honor recipient, said that the case would be taken all the way to the U.S. Supreme Court.

"Feb. 12, 2002, will be the filing date.

"In January, 2001, President Elect George W. Bush told a gathering of military veterans which included numerous Congressional Medal of Honor recipients that his administration would fully honor the promise made to veterans. Yet, he instructed the U.S. Justice Department to challenge the court suit filed by World War II and Korean War veterans.

"The U.S. District Court ruled 7-4 that even though the government made specific promises to secure a career military service, they were not obligated by law to keep the promises made to these veterans.

"2002 has been a dark and bleak year for the military retirement community, especially for the thousands whose military service was during WW II and the Korean War. During the years of WW II and the Korean War, financial remuneration of military service career men and women was poor. But because they believed their government would keep the promises made to them about health care and other services would be available in their retirement years, they stayed the course and served honorably. They had no way of knowing that the government in future years would not keep its word. Now, when the need is so great, the government is adding insult to injury -- it admits that it have no moral obligation to keep its word.

"Today, our government is busy sending off a new generation of men and women to fight in our name. We have promised them much, and have again professed undying support for them and their families. Meanwhile the government's trying quickly to dispatch one generation of veterans before the first of the new generation of wounded come home. Veterans groups and veterans coalitions numbering over 6 1/2 million veterans have told our government that it is wrong on the issue of health care, disability payments and survivor benefits of veterans's widows. They, however, seem to forget that freedom is not free.

"I would urge all Americans to stand up and protest the actions that have been taken regarding benefits for those who have served our nation faithfully and honorably. We simply cannot forget the sacrifices made by those who have served in the past and those who currently serve. Our nation has the resources to keep promises to our fighting men and women."

Note: If you would like more info contact Col. Dan Cedusky at (217) 359-5139 or e-mail him at: ColonelDan@worldnet.att.net Also check: www.classact-lawsuit.com

Mucked up

There was absolutely no reason for me to write in one of last week's Christmas war stories, "ARM 2/c Phil Pituzzelo was a tail gunner aboard a Curtis Hell Cat fighter-bomber in the Pacific ...." In the original story I had written about the Port Charlotte man, I noted that he was in a Helldiver.

Somehow I got it in my head 10 days ago, I had screw up in the original story and identified his plane as a Helldiver and it should have been a Hellcat.

Needless to say, David Weaver helped me with my foot in mouth disease. His e-mail notes in part:

"Today's article about Christmas in the South Pacific jungle was great. I enjoyed it (as usual with your work). However I must point out the boo-boo. The Hellcat (F6F) was a fighter plane built by Grumman Aircraft. The SB2C Curtis Helldiver was not a fighter, it was a dive bomber which replaced the SBD Douglas Dauntless -- the dive bomber which won the battle of Midway."

Mea culpa.

Contact me

If you're a vet with a story or you have a friend who has a tale to tell about his part in any war or veterans' activity, give Don Moore a call at (941) 474-5521, ext. 217 or 1 (877) 827-6204, ext. 217. You can also e-mail: moore@sun-herald.com, or fax: (941) 426-3576. To send a letter, write: Englewood Sun, 167 W. Dearborn St., Englewood, FL 34223.

By Don Moore Columnist

Trucking Accidents and Truck Drivers Sleep Apnea Dangers

Truck Accidents and Truck Drivers Sleep Apnea Dangers: Testing Proposed

By Jay Foster, Trucking Accident Attorney

The Medical Review Board of the Federal Motor Carrier Safety Administration has recommended that CDL holders with a body mass index of 30 or higher be referred for sleep apnea testing.

Can you breath deep while sleeping? Some of us may not be able to do so as sleep apnea is a serious medical condition that interferes with our ability to breath during sleep. It can cause a number of medical conditions but the most important for the public and truck drivers is it can cause sleeplessness, fatigue, and other health problems. Some of us are overweight and may be more susceptible to sleep apnea as a result. However, you can have sleep apnea and not be overweight. There is evidence that if you have a body mass index of of 30 or greater, which means 220 pounds for a six foot tall person, this puts you in the high risk category for sleep apnea.

Based on the trucking accident and trucking wreck cases that I have handled I think sleep apnea is a serious danger in the trucking industry and a significant number of drivers may have the risk factors associated with sleep apnea which might cause them to be motivated to avoid the medical check-ups needed to diagnosis and treat this problem due to the potential lost wages.

At our offices, we hope that requiring sleep apnea testing for truck drivers will be done as we believe it is a step in the right direction for our safety, that is, safety of the drivers on the road and for the health and safety of the truck drivers.

Robert Bork Files Law Suit

http://www.jayfosterlaw.com/library/robert-bork-files-sui.cfm

Did State Farm Fire Engineers Who Attributed Hurricane Damage to Wind?

E-mails criticized State Farm Internal communications at engineering firm questioned ethics of insurer's actions By Chris Joyner chris.joyner@jackson.gannett.com An attorney for Mississippi Gulf Coast residents who lost homes to Hurricane Katrina said Tuesday that e-mail between executives in a North Carolina firm shows how insurance companies pressured disaster engineers to attribute the destruction to flooding. Homeowner policies did not cover flooding. In the e-mail, Randy Down, vice president of engineering for Forensic Analysis and Engineering Corp., expressed "serious concern about the ethics" of demands from State Farm Fire and Casualty that a property be reinspected after an engineer with the company found high winds were the primary cause of the home's destruction. "I really question the ethics of someone who wants to fire us simply because our conclusions don't match hers," Down said in the Oct. 18, 2005, e-mail to Forensic CEO Bob Kochan. Down wrote State Farm "would love to see every report come through as water damage so that they can make the minimum settlement." "I now see why the attorney general's office is already involved down there," he wrote. "She needs to be careful about what she is doing and saying," he said, referring to the State Farm official. When contacted Tuesday about the e-mail, Down and Kochan said State Farm never directly asked them to change a report to financially benefit the company. "The basic reason for that e-mail is Randy and I both felt it would have been improper for State Farm or any other company to specifically change a report to benefit them," Kochan said. State Farm spokesman Phil Supple denied the company rigged the outcome of reports to deny claims. "Our State Farm employees are committed to conducting themselves in an ethical and appropriate manner. Any suggestions to the contrary are simply wrong," he said. In recent months, attorneys for homeowners in Mississippi and Louisiana have seized on multiple drafts of engineering reports as proof insurance companies gamed the system to deny claims and push homeowners to file with the National Flood Insurance Program, a federal plan partially funded with tax money. Chip Merlin of Florida is an attorney for several homeowners in claims of altered engineering reports, none of which involve Forensic. Merlin said the e-mail shows the insurance industry's attempt to force "outcome-oriented opinions" from the independent engineering firms that perform initial inspections before a claim is paid. "It underscores and shows what our allegations have been, that there is a culture and mentality of ... stacking the deck for the insurance companies," he said. One report that got Forensic in trouble with State Farm appears to be an Oct. 12, 2005, inspection of a Gulfport home damaged in the storm. In that report, the engineer, Brian Ford, concluded damage was "due to wind." Shortly after that report was filed, State Farm fired Forensic. In an Oct. 17, 2005, e-mail, Kochan wrote he had "managed to get us back on the roles with SF but we need to have a very frank conversation with the boys down south to be sure that we don't fall in the same trap," he wrote. In the e-mail, Kochan said State Farm believed the engineer relied too much on eyewitnesses to the home's destruction. Kochan wrote State Farm catastrophe coordinator Lecky King had expressed her concerns about using local engineers to conduct the inspections. "In her words ... they are all too emotionally involved and are all working very hard to find justifications to call it wind damage when the facts only show water induced damage," he wrote. Three days later, Forensic filed a second report on the Gulfport home, using another engineer, and found the damage "appears to be predominantly caused by rising water from the storm surge and waves." Kochan said Tuesday he agreed to reinspect the homes as a condition to continue working with State Farm. The new conclusions were "based on additional evidence that was provided." "She didn't necessarily feel that the conclusions that we reached were accurate," he said. "I didn't accept her disagreement but I said, 'You're the boss, and we're going to re-look at it and, if we were in error, we will correct.' " Citing pending litigation, Supple would not comment specifically on the e-mail but provided a transcript of a deposition in which Kochan said King's only objection with the reports was "the information we supplied with our report didn't technically justify the conclusions." Down said in his e-mail response to Kochan he was "raising a flag" about possible problems. "All of the sudden we get told we're fired by State Farm," he said. "Had I become aware of deliberate efforts by the insurance company to alter conclusions, you would have seen a lot more e-mails than that one, and they would have been a lot more strongly worded than that." Kochan said Forensic pulled out of Mississippi not long after that because the company was not getting enough work. He said there was some suspicion work was going to engineering firms that had been more cooperative with the insurance companies. Immediately following the storm, Kochan said State Farm had told Forensic 10,000 engineering reports likely would be needed to determine claims made on the Coast and that work would be divided among 10 companies. But Forensic got only about 150, he said. "Quite frankly, with the investment we made, I brought my people home," he said. The insurance industry's response to Katrina continues to be closely examined. Mississippi Attorney General Jim Hood is scheduled to testify at a hearing today before the Senate Commerce Committee.

What Should Mississippi Do About the Wind Pool Insurance Problem?

Mississippi Needs to Amend a Bill in the Insurance Committe Concerning the Wind Pool

by Jay Foster, Attorney

Allstate Made More in Profit in 9 Months Than Mississippi's Entire Budget

Posted on Sat, Jan. 06, 2007

Insurance crisis answers are not yet on the table

By DEAN STARKMAN
A SUN HERALD FORUM

How does Mississippi solve its insurance crisis?

It doesn't - not until the conversation starts to broaden considerably.

Right now, the insurance discussion centers on ways to entice insurers to sell their products through various reinsurance subsidies and/or off-loading the worst risks into state-run wind pools and the like.

(Left out of the discussion, sadly, is how to get insurers to pay on current policies. But we'll get to that.)

I happen to like the insurance industry, but it needs a subsidy like my funder and favorite Hungarian billionaire, George Soros, needs a new FEMA trailer. In 2005 - the worst-ever disaster year in the history of insurance - the insurance industry posted its best-ever net income, $43 billion, since modern insurance was invented in Edward Llody's coffee house on London's docks in the 17th century. That is, it was its best year until this year's expected $60 billion.

I'm all for profit and for financially strong insurers - some of my best professional friends are insurance executives - but subsidies? From Mississippi?

My friends at Allstate Insurance Co., the most-exposed, least-reinsured insurer on the Gulf, posted net income of $1.8 billion in 2005. Sure, it was down from 2004 and what is expected for 2006 (don't ask; you'll wish you had bought the stock). But profits being merely down in the worst-ever year isn't a bad outcome. It's good. Why pretend otherwise? You're an i-n-s-u-r-a-n-c-e company. It's supposed to be risky - for insurers, I mean, once in a while, right? My old company, Dow Jones & Co., had a lot a bad years. It happens.

I don't mind talking about subsidies. After all, Mississippi's needs a decent insurance market in the here and now. But is that all there is?

My blog, http://insurancetransparen- cyproject.com, is committed to broadening the discussion about insu- rance to include many different types of people, insurers and insureds, policymakers, academics, regulators, media-types like me, lawyers who defend insurers and lawyers who sue them, and mostly, people who live in the Gulf states who are at the center of a very important - albeit difficult - moment not only in the history of their region, but in the history of the U.S. insurance industry.

So, let the broadening begin.

Am I the only one who thinks the insurance market in Mississippi seems "far-from-equilibrium" - economist-talk for "wildly out of whack"? It seems to me that insurance buyers need first to get on a reasonably equal footing with insur- ance sellers. That means two things:

• Buyers must be numerous enough to create meaningful leverage with carriers.

• They must have information about insurers that approaches what insurers have about them.

On the first point, it is painfully obvious by now that Mississippi needs the insurance industry a lot more than the insurance industry needs Mississippi.

Mississippi's insurance market, $3.6 billion and its tiny homeowners' market, $600 million or so, is basically a rounding error to an industry that wrote $417 billion in premiums in 2005. Allstate's earnings in the first nine months of this year, $3.7 billion, nearly eclipsed Mississippi's state budget ($4 billion).

In contrast, the departure of players such as Allstate, State Farm or Travelers can freeze a state's economy like a box of frozen corn.

Nonetheless, Mississippi is grappling alone with its crisis of insurance supply, while Louisiana, Florida and other states do the same with their own crises, and New Jersey, Maryland, even Brooklyn, where I live, are facing - separately - shrinking supply problems.

Why insurance markets are broken up by states' political boundaries is a column for another day, but, trust me, it was not decreed by the Great Insurer of Us All.

Insurers, meanwhile, see the U.S. for what it is: one big, rich insurance market that spreads risks widely, efficiently, and, in recent years, very profitably. Insurers very prudently offset risks in Mississippi with risks in Brooklyn, where (almost) nothing bad ever happens. It also offsets Mississippi homeowners' risk with the Mississippi auto market, and even with the very lucrative Oregon auto market.

If I'm Insurance Commissioner George Dale, a very experienced regulator (I kid that he may have been Jefferson Davis's insurance commissioner), I get in the Mississippi DOI-mobile, put a siren on top, and head west on I-10 to Baton Rouge, pick up Louisiana Insurance Commissioner Jim Donelon, execute a three-point turn, drive back east to Tallahassee, stopping in Montgomery for Alabama's commissioner, Walter Bell, then get Texas's commissioner, Mike Geeslin, on a conference call, and while I'm at it, conference in Steve Goldman in Trenton and Eliot Spitzer's new commissioner-appointee, Eric Dinallo, in Albany.

Now at least you are talking about a market. If any insurers want to leave (or not pay claims), you now have their attention.

Step two brings us to my favorite hobby horse: Transparency.

Right now, insurers have nearly unlimited information about their customers' financial and credit profiles.

Insurance buyers, by contrast, don't know the first thing about their insurance carriers, namely: who pays claims and who doesn't? Would you buy a mutual fund without knowing about past performance?

What do we know, really, about how well insurers have performed post-Katrina?

Many of your neighbors have unkind things to say about insurers, and several thousand of them have gone to court. Your attorney general, Jim Hood, has launched a criminal probe. Congressman Gene Taylor, who is leading insurance reform efforts, colorfully likened insurers to "child molesters." Commissioner Dale, hardly a radical, has also expressed strong misgivings about insurer conduct.

But wait. Allstate and State Farm say that upwards of 98 percent of all claims are settled. The Insurance Information Institute say its independent survey found an overwhelming majority of survey respondents were satisfied with the service they received. Insurers say they are paying $45 billion in losses from Katrina. That's a big number.

On the third hand, Swiss Re, an important source of industry data, says Katrina's total economic damage was $135 billion, leaving a $90 billion gap. That's an even bigger number.

Hmm.

How do you reform something if you don't know anything? If I'm Commissioner Dale, I get some information. I ask each insurer: How much did you pay on average per policy, by county? How many claims did you deny outright per total number of claims? How much did you earn in premiums not just last year, but over the last 10 years? And what about auto? Then I post it so people can read it. Those are just the basics.

And here's where I get controversial: I draw up a rule that requires policy- holders to sign an affidavit attesting to how much they think they were owed and compare it how much they got paid. Many of us have spoken to people who feel they were paid some small fraction of the real value of their claim.

Let's find out which insurer has the better - what shall we call it? - ITP* Pay-Out Ratio.

How reliable is that number? Not very, I suppose. But, how reliable are insurer estimates of what they owe? Both sides have opposing interests: policyholder want as much as possible; insurers want to pay as little. Both sides face legal sanctions for lying. At least we could see the size of the gap between expectations and performance.

At that point, the market can begin to work its magic: rewarding good actors and punishing the bad. And who knows? After adding up all the data, the industry's assertions about its performance might prove to be correct.

Don't like those ideas? That's OK. But out of this crisis at least should come a serious discussion about insurance. This is bigger than the Gulf, and it goes way beyond homeowners' insurance. And Mississippi and its neighbors are in a position to lead the way.

----------------------------------------------------------------
Dean Starkman is a former Wall Street Journal staff writer. He is founder of The Insurance Transparency Project* http://insurancetransparencyproject.com, an insurance blog and information clearinghouse. He is a Katrina Media Fellow with the Open Society Institute, founded and chaired by philanthropist financier George Soros. Neither OSI nor Soros are responsible for these opinions.

Ask Your Legislator if They Support This Bill

MOVING MOUNTAINS Homeowner tackles insurance bill of rights By ANITA LEE JACKSON - A homeowner denied insurance coverage for his Hurricane Katrina damage grew angry, but then he did something about it. Long Beach resident Kevin Buckel's work is expected to result in an Insurance Bill of Rights for Mississippi policyholders. The bill's strength is yet to be determined, but Buckel plans to see through the grassroots campaign he started a month after the hurricane in September 2005. "It's remarkable," said state Rep. Diane Peranich, D-Pass Christian. "Already, he's moved a mountain because George Dale himself has come forward with a bill of rights. I certainly credit Mr. Buckel with that move forward." Mississippi Insurance Commissioner Dale, a friend of the industry who has been dismayed by its response to Katrina, announced Thursday that he has finalized a Policyholders Bill of Rights that he plans to put into effect through state regulation. A public hearing on the bill is scheduled Jan. 26 in Jackson. "We continue to try to find ways to see that what happened after Katrina doesn't happen again," Dale said. A key feature of Dale's bill of rights mandates that insurance companies provide an outline of coverage to homeowners before or when the policy is issued. The insurance companies also have to indicate in a checklist where crucial items are located in the policy, such as exclusions for flood coverage. The bill also lists 14 policyholder rights. Most already apply under the law, but the bill spells them out in one place. Dale said his office studied insurance bills of rights in Texas and Florida to draft one for Mississippi. Buckel also has researched bills of rights. He drafted one that he presented to Peranich and other Coast legislators. He hopes to see the Legislature pass a bill of rights with key provisions Dale did not have. For example, Peranich and Buckel believe an insurance bill of rights should prevent insurance companies from contributing to the campaigns of state insurance commissioner candidates. Dale, the longest-serving insurance commissioner in the nation, said that would be fine as long as the same rule applies to other offices and the constituencies they oversee or regulate. Buckel also says insurance companies should be required to treat policyholders equally. In waterfront neighborhoods across the Coast, some homeowners were denied coverage for wind damage while others received compensation from the same company. Insurers maintain that they investigate damage to each property and pay what is owed under their policies. Most important, Buckel believes, consumers deserve to know an insurance company's record on claim payments. While Dale's office regularly releases figures on the number and amount of claims paid, information is not available on the number and amount denied. State Rep. Mark Formby, R-Picayune, chairman of the House Insurance Committee, said several insurance bills of rights are being drafted. Once they are filed, his committee will hold a hearing to discuss them. Buckel is one of the people expected to speak at the hearing. "My big push all along has been that George Dale should be required to disclose how these insurance companies perform," said Buckel, who started his grassroots campaign when Dale refused to provide complete claims numbers. "There's no law on the books requiring him to do it and he's not doing it after Katrina because he knows the insurance companies' numbers are horrible." ------------------------------------------------------------------ Insurance bills of rights A public hearing is scheduled on a Policyholders Bill of Rights proposed by Mississippi Insurance Commissioner George Dale. Dale said suggestions at the hearing could result in revisions before a final bill is added to state regulations. No legislation is required for Dale's bill. The hearing will be held at 9 a.m., Jan. 26 in the Public Service Commission Courtroom, Woolfolk State Office Building, 501 N. West St., Jackson. To review the bill, go to www.doi.state.ms.us, click on Industry Info, then select Regulations from the list. To learn more about Kevin Buckel's grassroots campaign for a legislative bill of rights and read his proposed bill, go to www.msbillofrights.com. Once an insurance bill of rights is introduced in the Legislature, Buckel said he will keep a legislative scorecard on the Web site to show who supports and opposes it.

Here Is Why Insurance Companies Think They Can Get Away With Denying Your Hurricane Claim

Senator brags on state legal reforms By Sam Knowlton [7/6/06] Limits on civil lawsuits are working in Mississippi, said Sen. Charlie Ross, R-Brandon, who championed legal reforms adopted in the Legislature - adding he plans to run for lieutenant governor in 2007. Ross recapped changes to lawsuit rules enacted by the Legislature in 2004 for members of the Vicksburg Lions Club on Wednesday. “We addressed where you could be sued; we addressed who could be sued; and we addressed what you could be sued for,” Ross said. Lt. Gov. Amy Tuck, in her second four-year term, is term-limited and cannot seek a third. Ross is chairman of the Senate's Judiciary, Division A, Committee and has recently been named chairman of the American Legislative Exchange Council's Civil Justice Task Force. He said he was honored to draft the tort-reform legislation and “lead the fight on the Senate side. “And because I was in that position I get invited all over the country now to tell other states what we did and how we did it,” Ross said, adding that he'd been to Texas; Georgia; Washington, D.C.; and Idaho and said he plans to go to California this summer. “Everybody wants to know what we did and how we did it,” he said. Ross, a Jackson attorney who served as a fighter pilot in the first Gulf War, said he's convinced the bill “did not overreach.” He'd seen first hand that courts in some Mississippi counties had gotten “out-of-kilter,” he added. “It was time to get it back to a level playing field, not only because of things like jobs and economic development but also for the sake of the system itself, to establish the rule of law and to put predictability back into the system,” Ross said. The wide-ranging limits, passed in special session, narrowed rules on out-of-state claimants using Mississippi courts and, among other things, set a ceiling of $500,000 in noneconomic damages plaintiffs can receive. Ross attributed the changes to voters' decisions in the 2003 elections, which also put Gov. Haley Barbour, a Republican and an advocate for the limits, in office. “It was a major issue in the statewide races,” he said of tort reform. “It was a major issue in the legislative races. The people of Mississippi overwhelmingly said we want it done, and they did it by electing people who were in favor of it.”

Allstate Falsifies Engineering Reports

FBI RAIDS ALLSTATE

Based on a report from The Wall Street Journal -- Internet Edition

The Federal Bureau of Investigation has executed search warrants as part of a investigation by the U.S. attorney from the central district of California at three offices of Allstate Insurance Co., seeking documents related to allegations the company falsified engineering reports in order to minimize claims after the 1994 Northridge earthquake. Offices searched include one in Santa Fe Springs; the company's Northbrook, Ill., headquarters; and a data warehouse in the Dallas suburbs. An Allstate spokesperson said the company has been cooperating fully with the investigation, but denies the allegations.

FBI RAIDS ALLSTATE IN QUAKE PROBE

By Greg Burns and Vincent Schodolski Chicago Tribune Staff Writers May 5, 1998

Federal investigators armed with search warrants have descended on Allstate Insurance Co. offices in three states, including its Northbrook headquarters, in a criminal probe related to the 1994 California earthquake, the company confirmed Monday.

Allstate is being investigated for allegedly altering engineering reports systematically to reduce the amount of claims it owed after the Northridge quake, which did more than $20 billion in damage to the Los Angeles area, sources familiar with the investigation said.

The company said it did nothing improper. "We strenuously deny the allegations," spokesman Peter Debreceny said. The allegations were aired in a civil lawsuit filed last year by a consumer-advocacy group and a former Allstate employee, described as "whistleblower," who had worked on the team that processed earthquake claims.

"It's fraud to attempt to rip off the policyholders," said Harvey Rosenfield, director of the Proposition 103 Enforcement Project, which brought the suit. "People got squeezed by the `good hands,' " he said, referring to an Allstate ad slogan.

The company apparently came under criminal investigation early this year, when officials from the U.S. attorney's office in Los Angeles began asking questions. Company officials have met with the U.S. attorney's office on four separate occasions, Debreceny said.

On April 24, federal prosecutors and FBI agents raided an Allstate claims office in Santa Fe Springs, Calif., that had been the nerve center of the company's earthquake response efforts, according to Debreceny. Some documents were seized, he said, though he didn't know how many.

On Wednesday, teams of about 15 investigators arrived unannounced at Allstate's Northbrook headquarters

On Wednesday, teams of about 15 investigators arrived unannounced at Allstate's Northbrook headquarters and at a Dallas records warehouse, where they examined and impounded documents. A couple of investigators also searched an Allstate office in Barrington, though no documents were taken away, Debreceny said. Though Debreceny said he could not quantify the number of documents seized, other sources said "thousands" were carried out in the raids.

Federal investigators served a subpoena indicating they may seek additional documents from the company, he said. "We are cooperating," Debreceny said. California insurance officials said they, too, are participating in the investigation. Though no charges have been filed, the probe represents a black eye for the company, one of the nation's largest property-casualty insurers.

"The accusations are highly unusual for such a large, well-capitalized insurer, said Frederick Townsend, an insurance consultant. "That's the type of thing you might see in a smaller company, or one in shaky financial condition," he said.

Meantime, the company said it is proud of its performance in the aftermath of the quake. "The efforts of Allstate personnel throughout this period reflected very well on the company and its ability to meet its customers' needs in an unprecedented catastrophe," Debreceny said.

The quake in the early morning hours of Jan. 17, 1994, already has cost Allstate plenty. The firm, one of California's largest insurers, has incurred more than $1.7 billion in claims. Of the 46,034 property claims related to the temblor, 120 remain open, Debreceny said.

The civil suit alleges that Allstate told its engineers to alter draft reports so that covered losses would be minimized.

At issue are Allstate's efforts to assess damage from the quake. It had more than 650 adjusters on the scene within a week, among them independent engineers who recommended steps needed to repair damaged buildings and to prop up the shaky soil beneath them. The civil suit alleges that Allstate told its engineers to alter draft reports so that covered losses would be minimized. That reduced Allstate's payments to the insured, the suit claims.

The former Allstate employee who joined in the lawsuit, Jo Ann Lowe, said altering reports was a standard practice, "not isolated occurrences," according to a statement published last year by the Los Angeles Times. Lowe, a 25-year Allstate employee, said she complained about the alleged practice to company officials, who later denied that it had occurred, according to the statement.

Similar allegations were raised in a separate lawsuit brought by a group calling itself Homeowners Policy Holders. Debreceny said the company never tried to influence the judgments of the engineers it hired. Damage from the quake "was repaired in accordance with (the) insurance policies as quickly as possible, so that families were able to resume their normal lives," he said.

Although other insurers working in California have had civil suits brought against them for alleged underpayment of claims related to the quake, sources said that Allstate was the only one to come under federal investigation thus far.

The sources said that the investigation was likely to continue for at least six months.

Think Insurance Companies Lose Money? Think Again.

A National Disgrace

Article by Peter King of Sports Illustrated

I know you come to this column to read about football, sports and other things. I'll get to the regular Tuesday fare, your e-mails, in a few paragraphs. First, there's something a little more significant to discuss.

I sense that we in this country have Katrina fatigue. The New York Times reported as much recently, saying that people in some of the areas that welcomed Katrina evacuees last September are sick of hearing about the hurricane, the flooding and the aftermath.

Well, my wife and I were in a car last Wednesday that toured the hardest-hit area of New Orleans, the Lower Ninth Ward. We worked a day at a nearby Habitat for Humanity site on Thursday, and we toured the Biloxi/Gulfport/Long Beach/Pass Christian gulf shore area last Friday. And let me just say this: I can absolutely guarantee you that if you'd been in the car with us, no matter how much you'd been hit over the head with the effects of this disaster, you would not have Katrina fatigue.

What I saw was a national disgrace. An inexcusable, irresponsible, borderline criminal national disgrace. I am ashamed of this country for the inaction I saw everywhere.

I mentioned my outrage to the mayor of New Orleans, Ray Nagin, on Thursday. He shook his head and said, "Tell me about it.' Disgust dripped from his voice.

What are we doing in this country?

"It's been eight months since Katrina,' said Jack Bowers, my New Jersey friend and Habitat for Humanity guide through the Lower Ninth Ward, as he took us through deserted streets where nothing, absolutely nothing, was being done about the wasteland that this place is.

"Eight months!" he said. "And look at it. When people talk to me about New Orleans, they say, 'Well, things are getting back to normal down there, aren't they?' I tell them things are a long, long way from normal, and it's going to be a long time before it's ever normal. And I tell them they've never seen anything like this.'

Our Mississippi guide, Josh Norman of the Biloxi Sun-Herald, put it this way: "People outside of here are tired of hearing about it. They've moved on to the next news cycle.'

How can we let an area like the Lower Ninth Ward sit there, on the eve of another hurricane season, with nothing being done to either bulldoze the place and start over, or rebuild? How can Congress sit on billions of looming aid and not release it for this area?

I can't help but think that if this were Los Angeles or New York, that 500 percent more money -- and concern -- would have flooded into this place. And I can't help but think that if the idiots who let the levees down here go to seed had simply been doing their jobs, we'd never have been in this mess in the first place -- in New Orleans, at least. Other than former FEMA director Michael Brown, are you telling me that no others are paying for this with their jobs? Whatever happened to responsibility?

Am I ticked off? Damn right I'm ticked off. If you're breathing, you should be morally outraged. Katrina fatigue? Hah! More Katrina news! Give me more! Give it to me every day on the front page! Every day until Washington realizes there's a disaster here every bit as urgent as anything happening in this world today -- fighting terrorism, combating the nuclear threat in Iran. I'm not in any way a political animal, but all you have to be is an occasionally thinking American to be sickened by the conditions I saw.

The Lower Ninth Ward is a 1.5-by-2-mile area a couple of miles from the center of New Orleans. It is a poor area. I should say it was a poor area. Before the storm, 20,000 people lived there. Fats Domino lived there. So, formerly, did Marshall Faulk. And now you drive through it and see nothing being done to fix it or tear it down, or to do anything.

In Mississippi, we drove through one formerly thriving beach town that has two structures left. We drove past concrete pads with litter and shards of wood around them. Former houses. The houses, quite literally, have been eviscerated. Hundreds of them. This is what nuclear winter must look like, I thought.

I'm a sportswriter. It's not my job to figure how to fix what ails the Gulf Coast. But the leaders of this society are responsible. And they're not doing their jobs. I could ignore everything I saw and go back to my nice New Jersey cocoon, forgetting I saw it. And I know you don't read me to hear my worldviews. But I couldn't sleep at night if I didn't say something.

On Saturday, at the Saints' headquarters for the draft, I watched the day unfold with a friend of the team, New Orleans businessman and president Michael Whelan. I told him what I'd seen, and asked him what he thought.

"We spend all this money on the war in Iraq and we can't take care of our own cities?" he said. "You get out of downtown, and it's like a war zone in a lot of neighborhoods still. The government has been a huge letdown. I've heard billions of dollars are going to be sent here. Where are they? Nothing is taking place. I certainly think that now it's back-page news; the government is sweeping it under the rug.

National Highway Traffic and Safety Administration Releases Annual Crash Predictions

The NHTSA has released its annual projections for crashes and fatalities on our nation's highways. Traffic fatalitites are expected to increase by 1%, while injuries caused by crashes are expected to decline by 4%. To view the entire report, please follow the link below.

For $850.00 Trucking Companies Can Save Lives

Tired truckers have a pal Fatigue warning devices raise privacy concern By MICHAEL COWDEN THE ASSOCIATED PRESS PITTSBURGH - A new fatigue-warning device could help truckers avoid accidents by tracking how often they blink and how long their eyes stay shut, even as it raises privacy questions concerning what may happen to that data. The device is about the size and shape of a Web cam. It is mounted on the dashboard, draws power from the truck's cigarette lighter and uses infrared technology to monitor blinking. The more a driver blinks and the longer the driver's eyes are closed, the more the device beeps - one beep per second the eye is closed. With enough beeping, the trucker knows it's time to pull over. "Once a person gets drowsy behind the wheel, there's nothing you can do about it but stop and get rest," said its designer, former Carnegie Mellon University professor Richard Grace. "A nap and a cup of coffee can do wonders." Fatigue plays a role in 13 percent of all truck-related crashes, according to a March report by the Federal Motor Carrier Safety Administration. The government estimates about 15,000 people are killed each year in fatigue-related accidents involving cars, trucks or other motor vehicles. Other driver-fatigue monitors are already on the market. SleepWatch, developed by the Walter Reed Army Institute of Research, is strapped to a driver's wrist like a watch, monitoring rest and activity patterns. Another, called SafeTRAC from AssistWare Technology Inc., detects whether the truck is staying within its lane. But Grace said truckers don't like to wear monitoring devices. He also believes his machine can detect fatigue more quickly than most lane-tracking devices because eyes tend to close before a driver starts swerving. Nonetheless, some truckers have found driver monitors like Grace's and SleepWatch too invasive because they track the drivers, not their trucks, said David Dinges, a University of Pennsylvania sleep researcher who studied Grace's unit and other warning devices for the federal government. The technology is good but lane trackers are more reliable and give fewer false alerts when, for example, drivers look away from the road to fix their mirrors, Dinges said. Dinges also said some drivers have concerns about who owns the data collected by fatigue-monitoring devices, an issue important in matters of litigation and discipline. "There are unresolved legal issues about who has access to such data," he said. "The police? The company? Just the driver? We need to have a wider cultural debate." The American Trucking Association, a trade group representing trucking firms, believes fatigue-monitoring devices might be a good idea, within limits. "If these devices help keep drivers alert, they're welcome," said Mike Russell, a spokesman for the group. "But if they're mandatory, that's another question." Russell said no amount of equipment can make a bad driver good. Grace's basic warning device costs $850, and one that also records data sells for $1,000. It is currently sold only directly from his company, Attention Technologies Inc. Current models are effective only at night and aimed primarily at customers in the trucking industry. Grace said he hopes to eventually develop a version that is effective during the day and available to the general public. Several North American trucking companies, including Pitt Ohio Express LLC, as well as some South African mining companies, including the De Beers Group, are evaluating the devices for purchase, Grace said. Sean Flynn, a hazardous materials trucker for Coraopolis-based MC Tank Transport Inc., said he once did a series of runs that left him without sleep for almost 32 hours. "I was awake, but I was not functioning particularly well," he said. Flynn said drivers might use a device like Grace's, but only if they could be sure the data it recorded wasn't turned over to their employers. "It boils down to, 'Do you want to have that in your vehicle?"' he said. "For some guys, it's an invasion of privacy."

Judge Tells State Farm to Produce Hurricane Documents

Judge rebuffs State Farm Insurer had wanted AG's role reduced By ANITA LEE calee@sunherald.com GULFPORT - Attorney General Jim Hood remains active in an investigation of insurance fraud in South Mississippi, despite State Farm Fire and Casualty Co.'s attempt to have his role restricted. State Farm attorneys tried to show in Circuit Court on Tuesday that Hood had leaked information about the secret investigation and should not be allowed to review company records a grand jury subpoenaed. Circuit Judge Stephen B. Simpson denied the request, finding no direct evidence to support the claim. State Farm attorney Robert Galloway said the company is concerned Hood will use information from the criminal probe in a civil lawsuit. Hood has sued State Farm and other major insurers over their refusal to pay Hurricane Katrina claims that involved tidal surge. Insurers say they are paying what is owed under their policies for wind damage, but the hurricane's tidal surge is excluded from coverage. In the criminal probe, investigators for Hood and local District Attorney Cono Caranna are pursuing allegations that insurers are using altered engineering reports to minimize wind damage. State Farm is concerned that Hood will share grand jury records with Richard "Dickie" Scruggs and other attorneys pursuing their own civil cases, Galloway said. Scruggs, reached at his Moss Point office Tuesday afternoon, said Hood is not giving him information. Instead, he said, he is passing along records to investigators. "There's not been a two-way street between the investigators and me," he said. "I wish there were. It's been a one-way street." Scruggs said he has a high-level source at State Farm's corporate headquarters in Bloomington, Ill. He said State Farm's own records, which the source provided, show "a long pattern and practice of unfair dealings with disaster-type claims." He also said the company is working to move records from the Coast to Texas and other places where they will be out of reach. But Galloway told Simpson the company is fully cooperating with the grand jury investigation. He said six boxes filled with 18,000 pages are ready to turn over. State Farm estimates the company will produce a total of 35 boxes containing 100,000 pages. The records were subpoenaed from State Farm's Biloxi catastrophe office and an unknown location in Gulfport. Hood indicated during the hearing that a handwriting analyst and other experts will be called before the grand jury. Simpson decided those witnesses will have to sign paperwork acknowledging the proceedings are to be kept secret. Hood told the judge Tuesday morning, "I'm going to be personally involved in this grand jury investigation because I want to make sure it's done right, that people are treated fairly."

It Is Not Always the Lawyer's Fault

Engineer: Reports altered, name forged 'They took out whole exhibits' By ANITA LEE, calee@sunherald.com Professional engineer James K. "Ken" Overstreet said his assessments of property damaged by Hurricane Katrina were altered without his permission and, in several cases, his signature was forged on documents insurance companies used to minimize or deny policyholder claims. Overstreet worked as a contractor for S&B Infrastructure. In turn, S&B contracted with Rimkus Consulting Group Inc. to supply damage assessments to insurance companies. S&B, he said, parroted orders from Rimkus. "If they could get by with changing the wind to surge, they would do it," said Overstreet, who has talked with the state Attorney General's Office in connection with a Hurricane Katrina insurance-fraud investigation. "If you had affidavits in there where people saw houses blowing down, sometimes they'd just take those out entirely. They took out whole exhibits." The Sun Herald obtained copies of altered reports from the Merlin Law Group, which has subpoenaed the records for several lawsuits filed in Harrison County against Houston-based Rimkus, Rimkus employees managing Hurricane Katrina work, State Farm Fire & Casualty Co., Clarendon National Insurance Co. and the company adjusting Clarendon claims, CIG Group Inc. Because of state Attorney General Jim Hood's ongoing investigation, representatives of S&B and State Farm said the companies will not comment on the allegations. Rimkus attorney David Ward said the company has not been presented with any lawsuits or documentation about the lawsuits. "We have no specific information from anybody that says there was anything improper done on a specific file. Once we have that, we'll be happy to respond in particular." Ward, who has represented Rimkus about 15 years, said the company follows detailed policies and procedures to produce its reports and other documents. Because of Hurricane Katrina's unprecedented storm surge, insurance companies have engaged engineering firms to separate wind damage, which they are obligated to pay, from destruction by water, which they are not. Chip Merlin, a Florida lawyer who has specialized in lawsuits again insurance companies since the 1980s, said he is not surprised by the altered reports his firm has seen. "Many times, engineers themselves are involved with doctoring the report," said Merlin, whose previous cases in other states did not involve Rimkus. "In this case, you have an innocent engineer writing his own opinion and then somebody, for some reason, changing that person's opinion on paper. That's why it's pretty unique." From state to state, disaster to disaster, Merlin sees an overriding theme: "Time after time, we find the insurance company, instead of looking for ways to pay the full amount, deviously engineering ways to pay less than what's owed under the policy after the loss happens." For their part, insurance companies maintain they investigate each claim and pay customers what is owed under their policies. Overstreet said the engineering firms changed his reports without consulting him, even removing his references to tornadoes when he found evidence of them. State regulations require that an engineer prepare, review in depth or directly supervise the work he signs and affixes with his professional seal. Overstreet said Rimkus engineers whose signatures and seals are affixed to several of his reports were not involved in the damage assessments and didn't review the work with him. Overstreet said his signature was forged on the altered reports. "I don't think there was any restriction on the extent to which they could change the report," Overstreet said. "I was told we didn't have any control over how the reports got changed. It was like it was almost none of my business how they got changed." Overstreet said he saw a pattern to the damage investigations: when winds and surge battered property, blame the surge. Such was the case with a Rimkus report on the Long Beach home of James "Bud" Ray, who thought that he was fully covered for hurricane losses when he secured a National Flood Insurance policy and a homeowners policy for wind damage. His flood claim was paid through the National Flood Insurance Program, but he's still fighting for full reimbursement from Clarendon for wind damage. Clarendon contracted with CGI to adjust its claims. In September, CGI wrote Ray, saying he might not be entitled to coverage because early reports indicated the storm surge flooded or washed away many homes, but the company would investigate the claim. Overstreet completed a report on the Ray property in December. He concluded: "The home had been destroyed by a combination of wind gusts, tornadoes and wind-driven storm surge." He added: "Due to the high incidence of snapped and uprooted trees, and according to eyewitness accounts, winds much higher than those considered to be "sustained" likely contributed to the structural damage to Mr. Ray's house." A second Rimkus report in February omitted Overstreet's conclusions and instead said, "The storm surge associated with Hurricane Katrina destroyed the portion of the residence above the concrete foundation slab." Ray had collected sworn eyewitness accounts of the devastation. Overstreet's report included the eyewitness accounts and a map showing where each lived, along with a photo of Ray and one of the eyewitnesses. Those items were not included in the February report. Overstreet said his name was forged on the report as a consultant, with another engineer's signature and seal affixed. Meanwhile, Ray spent $15,000 of his own savings on weather, engineering and other professional reports to buttress his claim that wind tore up his waterfront home before the water arrived. He kept CGI representatives abreast of his expert information, eventually securing $500,000 on a policy valued at more than $900,000. After learning about the altered reports, he decided a lawsuit was his only recourse. His attorneys argue that his policy limits should be paid, and punitive damages levied against Clarendon and CGI for acting in bad faith. Clarendon representatives did not return calls to comment, while a CGI spokesman said the company had not seen the lawsuit. Overstreet summed up the situation: "You're not supposed to get somebody else to figure it out and do all the work and then stamp it. "The person doing the stamping ought to be the person that saw the documents and did the work. "I hate to say that about a company I was employed by, but its devastating for people who rely on it as an honest opinion."

Trent Lott's Lawyer Says Engineering Report Altered

Lott's lawyer: State Farm is destroying fraud evidence By MICHAEL KUNZELMAN THE ASSOCIATED PRESS BILOXI - A lawyer for U.S. Sen. Trent Lott said Monday that State Farm Insurance Co. is destroying documents that could show the insurer has fraudulently denied thousands of claims by Lott and other policyholders whose homes were destroyed by Hurricane Katrina. Zach Scruggs, one of Lott's attorneys, says Lott has a "good faith belief" that several State Farm employees in Biloxi are destroying engineering reports that gave conflicting conclusions about whether wind or water was responsible for storm damage. Like thousands of Gulf Coast homeowners, Lott's claim was denied because State Farm concluded that Katrina's floodwater demolished his beachfront Pascagoula home. State Farm says its policies do not cover damage from rising water, including wind-driven water. But lawyers for the Mississippi Republican claim Bloomington, Ill.-based State Farm has routinely pressured its engineers to alter "favorable" reports that initially blamed damage on the hurricane's wind, which the company's policies cover. A State Farm spokesman said Monday he couldn't immediately comment on Scruggs' allegations. Lott's allegations come on the heels of a lawsuit filed by a Kiln couple who claimed they had obtained copies of conflicting reports prepared by State Farm's engineers on what damaged their home. They said one report traced the destruction to Katrina's winds while a later report said flooding was the culprit. In response, State Farm spokesman Phil Supple had said the second report was the only one the engineering firm sent to State Farm's claims office. In an interview Monday, Scruggs said corporate "whistle-blowers" who are cooperating with Lott's attorneys have provided evidence that State Farm employees are destroying or moving those "initial favorable" engineering reports. "We believe that this is a systematic practice," said Scruggs, who is Lott's nephew by marriage. Mississippi Attorney General Jim Hood also says he is investigating allegations that State Farm manipulated engineering reports to deny claims after the Aug. 29 hurricane. A judge ordered State Farm to turn over copies of its Katrina engineering reports to Hood's office. The judge also ordered Hood's office to set up a "Chinese wall" that would keep the documents out of the hands of lawyers with civil cases against State Farm. Because Hood also has filed a civil case on behalf of the state against State Farm and other insurance companies, State Farm is asking the judge to bar Hood himself from seeing the records. State Farm denied Lott's claim in December based on a report prepared by Jade Engineering & Construction Inc. that concluded that the house was "probably damaged by storm surge/flooding and not by wind." Scruggs is asking a federal judge to order State Farm to turn over Lott's entire case file as well as records for other policyholders' claims.

Mississippi Attorney General Investigates Fraud By Insurance Companies

Some residents skeptical of insurance numbers By ANITA LEE, calee@sunherald.com Insurance companies reported they have closed the vast majority of their Hurricane Katrina claims, but some Sun Herald readers say they haven't received a dime. "Claims may be closed, but they are closed because insurance companies like ours, State Farm, are closing them without payment on our policy of any kind," wrote Diamondhead resident Debbie Hussey, who lived in one of 250 houses destroyed south of Interstate 10. Residents have banded together to push for payment in South Diamondhead and in the Jourdan River Estates/Bay Cove area of Hancock County. Many were insured by State Farm, which writes more than 30 percent of the state's homeowner insurance policies. But others had coverage through Farm Bureau Insurance Co., USAA or Allstate.Private homeowner policies cover wind; federal flood insurance covers tidal surge. In Sun Herald coverage published last week, State Farm maintained it had closed 94 percent of its claims by Feb. 13. The company reported paying a total of $519,842,120 on about 35,000 claims in the six South Mississippi counties. Our readers did the math, showing the average payment from State Farm to be about $15,000. However, State Farm maintains it is paying for wind damage. Spokesman Richard Luedke said, "If the loss was caused by wind or wind-driven rain, that is covered under the homeowner's policy." Although State Farm homeowner policies do not cover tidal surge, Luedke said the company covers wind damage to property in areas also hit by water. State Insurance Commissioner George Dale said insurers must prove water caused damage before denying coverage, but in many cases homeowners are shouldering the burden of proof. Despite evidence of tornados, sworn eyewitness accounts, engineering reports that document wind damage and other evidence, they say, insurers are still refusing to pay or offering less than is owed. ----------------------------------------------------------------- Attorney general's investigation A source familiar with state Attorney General Jim Hood's investigation of property-insurance companies says State Farm has filed a motion in an attempt to avoid producing engineering reports and other documents related to policyholders' Hurricane Katrina claims. However, State Farm spokesman Phil Supple said the company intends to cooperate with Hood's investigation. Supple said the company has filed a motion to address procedural issues, with sworn statements attached. He said the motion does not attempt to avoid producing records. Hood has declined to discuss the grand jury investigation, other than to say it involves possible fraud by insurance companies. Court records indicate a grand jury has subpoenaed records from State Farm employee Rick Moore, who works in the company's Biloxi catastrophe center. The grand jury file in the investigation has been sealed at State Farm's request, according to court records, but grand jury proceedings are generally kept secret. The court order indicates the file will be available to the attorney general and his investigators, along with personnel in the office of District Attorney Cono Caranna.

Mississippi Lawyers Work For Free

A Proud History of Generosity By JOY LAMBERT PHILLIPS Mississippi's poor and Katrina victims benefit from thousands of hours of free legal services A SUN HERALD FORUM I am writing in response to the April 5 editorial titled "For $10 an hour, lawyers can escape helping the poor." As noted in the editorial, providing free legal assistance to those unable to afford a lawyer is a hallmark of the legal profession. Contrary to the implication in the editorial and its title, Mississippi lawyers, individually and through the organized efforts of The Mississippi Bar, generously donate time and resources to assist the poor in Mississippi. Below are just some of the examples of the commitment of Mississippi lawyers to pro bono publico legal services. • In 1982 the Bar established the Mississippi Pro Bono Project (now the Mississippi Volunteer Lawyers Project). It was the first statewide pro bono project in America and the Bar was recognized for its commitment by being awarded the ABA Harrison Tweed Award. Since its inception Mississippi lawyers have donated over $40 million in free legal services on behalf of indigent Mississippians. • After Hurricane Katrina, when FEMA opened its first disaster recovery center on Sept. 6, 2005, in Ocean Springs, volunteer lawyers were there. Through the efforts of the Mississippi Bar's Young Lawyers Division, 566 Mississippi lawyers donated over 4,000 hours in free legal assistance, either in person at over 30 recovery centers or by telephone. By the end of January 2006, over 6,600 Katrina victims had received free legal assistance. • Legal Line, a public service of the Mississippi Volunteer Lawyers Project, provides callers with free legal information. The project arranges for attorneys to man the lines Monday through Friday from noon until 2 p.m. Basic legal information is provided to callers and, if actual representation is needed, callers are urged to contact a private attorney for representation. If the caller is unable to afford an attorney, they are referred to the appropriate Legal Services office for assistance. • A Homeless Legal Clinic has been organized by the Mississippi Volunteer Lawyers Project. Volunteer attorneys in Jackson spend their lunch hour each Tuesday providing free legal counsel to the poor, elderly, and disabled seeking counsel on issues surrounding many topics, including veterans and Social Security benefits, heirship and real estate foreclosure, among others. • Not only do lawyers individually and through organizations like the Bar's Mississippi Volunteer Lawyers Project donate countless hours of pro-bono services, but the Mississippi Bar has also been very active in lobbying our congressional delegation and state Legislature for funding for civil legal services for the poor. These programs provide much-needed civil legal assistance to indigent Mississippians. In 2003, The Mississippi Bar led the legislative efforts to enact the Mississippi Civil Legal Assistance Fund. This fund was established to accept private and public monies and distribute the funds to assist providers of legal services throughout the state. To date there has been no state funding of these services, however, this past legislative session, the Bar was instrumental in getting House Bill 961 passed to provide some state funding for Mississippi civil legal service providers. The bill has been forwarded to the governor for consideration. To commit time and/or funds, regardless of the amount, is a generous contribution on the part of practicing attorneys. The 20 hours or $200 are suggested minimums, not standards for service. Most attorneys provide more than 20 hours of pro bono work each year. For those lawyers who simply cannot or do not contribute the time, the minimum suggested financial contribution will help hire additional legal services staff to provide direct legal assistance to indigent Mississippians. The legal profession is one of the few, if not only, professions expected to provide pro bono services, which they do over and over again. It is unfortunate that you don't have the stories of all of the attorneys who slept in cars or tents to provide free legal assistance to the victims of Hurricane Katrina, some in spite of the fact that they also had damaged homes and offices. We should applaud lawyers for their generosity and remember that they do not bear the sole responsibility for seeing that our less fortunate citizens have equal access to justice. The attorneys are glad to help, but each and every citizen of this state shares that responsibility. We encourage all Mississippians to join the Bar in urging their congressmen and state legislators to adequately fund legal services for the poor. In the meantime, there will always be many committed lawyers who quietly volunteer their legal services to assist those unable to pay for those services. ---------------------------- Joy Lambert Phillips of Gulfport is president of The Mississippi Bar. by Joy Lambert Phillips

Jay Foster's Community Involvement and Free Legal Help

I am committed to assisting our community by volunteering my time to assist people not only with legal matters but other issues which affect them. I also have what I think may be the most comprehesive website regarding free legal help and other free help for Mississippians on the internet. Please visit our frequently asked questions page and resources page for further information about this.

Mississippi Attorney General versus Insurance Companies

AG Hood Says Insurance Case Headed Back to State Court SHELIA BYRD, Associated Press JACKSON, Miss. - Mississippi's lawsuit over insurance companies' refusal to pay certain Hurricane Katrina claims is back in state court. Attorney General Jim Hood on Monday said a decision could come within weeks now that the case has been remanded from federal court to Hinds County Chancery Court, where it was originally filed. "We never anticipated they would be successful in dragging this out for six months," Hood said during a news conference at his office. Hood's lawsuit contends a standard homeowner's policy should cover hurricane damage, whether the loss is from wind or wind-driven water, a storm surge. Insurance companies said homeowners should have bought additional flood protection. If Hood's suit is successful, it could mean billions of dollars to the industry and result in a reduction in the availability of homeowners' policies and higher premiums, said Robert Hartwig, chief economist and senior vice president of the Insurance Information Institute, an industry trade association. Hartwig said language pertaining to exclusions in the homeowners' policies is ironclad as evidenced by the fact that more than 40,000 Mississippians had separate flood coverage under the National Flood Insurance Program in 2005. "It's a very telling fact that not a single regulator of insurance in the entire United States nor the NFIP supports Mr. Hood's position," Hartwig said Monday. Hood has estimated the storm surge damage could be from $2 billion to $4 billion. He said the insurance industry was sued over the same issue after Hurricane Camille struck the Gulf Coast in 1969. "Yet they did not change their policies at all," Hood said. "They kept them the same knowing that they have problems and have begun to make those changes after the fact." Hood said immediately after Katrina, companies began giving customers a form that included the storm surge provision. Mike Siemienas, a spokesman for Allstate, said homeowners' policies do not cover flood damage. "We still stand firm that those are claims that are covered under the National Flood Insurance Program, and it's been well-known and the policy language has been approved by the Mississippi Department of Insurance that we use," he said. Hood also said his office was investigating whether insurance companies were denying claims from homeowners who were not in the storm surge area. Nearly 220,000 Katrina-related insurance claims have been filed in the state's six coastal counties, according to the state Department of Insurance.

Enormous Profits for Insurance Companies in Florida After All Hurricanes

State Sen. Ron Klein, D-Delray Beach, represents District 30. He wrote this article for The Palm Beach Post.

Elect commissioner to ensure fairness, By by Sen. Ron Klein

Sunday, March 05, 2006

When the state Legislature convenes Tuesday for the 2006 legislative session, the question of what to do about homeowners insurance will be on everyone's mind. As responsible elected officials, we need to think about insurance reform from the perspective of the homeowner.

In the 14 years since Hurricane Andrew, the insurance industry has been allowed to dictate insurance law in Tallahassee. The insurance industry threat of "give us what we want or we're leaving" has led to routine, annual double-digit premium increases and unwarranted or random policy cancellations. Insurance companies have been allowed to set up separate subsidiaries to insulate the parent company from liability and losses. The effectiveness of our insurance regulation system has been watered down through unclear accountability and an arbitration panel that seems to be little more than a rubber-stamp for premium increases. Finally, Citizens Insurance, once a short-term fix, has become a long-term failure. It has been allowed to continue its freefall with Florida homeowners picking up the tab for too long. After 14 years of having their way, many insurance companies still are posting record profits, and yet the average homeowner's premiums are skyrocketing.

For the average Florida homeowner, the sting of premium increases is matched only by the fear of having their policy canceled. I have heard from too many of my constituents who regularly paid their premiums on time, year after year, without a claim. Yet, in the wake of Hurricane Wilma, they opted against filing a claim because they feared that their policy would be canceled. Their fears are warranted. I have even heard from homeowners who were told that their policy cancellations simply were "the luck of the draw."

There is little disagreement that the homeowners insurance market in Florida is in a state of crisis. Given this, I strongly believe that it is time that Florida, for once, approached the situation from the standpoint of homeowners.

I have filed the Homeowners Defense Act (SB 780). It takes the consumer's interest into account while providing common-sense insurance reform. For starters, this bill would establish a loyalty clause which provides that no homeowner who has faithfully maintained his or her policy for three years can be canceled for any reason other than fraud. No homeowner ever should be afraid to make a claim.

Second, my legislation eliminates the system known as "Use and File" whereby insurance companies are able to raise premiums before gaining approval from the Office of Insurance Regulation. Fairness and common sense dictate that a company must be willing to make a reasoned and legitimate case for an increase before it can start charging homeowners higher premiums.

My legislation would reform the arbitration panel that gives insurance companies another chance to win rate-hike approval after being denied by the Office of Insurance Regulation. Again, an insurance company should present a reasonable case for a rate increase the first time it requests an increase. If it fails to do so, it should not get a rate increase through the back door. While consistently approving increases, the arbitration panel further waters down accountability at a time when what we need is more accountability. These are just three of the key provisions that seek to level the playing field between the insurance industry and the consumer and restore some openness and accountability to the regulation process.

In order to bring further openness and accountability to the process, I have proposed a resolution (SJR 2132) that would change the appointed insurance commissioner to an elected position.

A directly elected insurance commissioner would be accountable to homeowners. My resolution would also prohibit candidates for the insurance commissioner position from taking campaign contributions from the insurance industry. This is to ensure that this official keeps homeowners first and foremost when making decisions. A directly elected insurance commissioner should be vested with the authority to hold the insurance industry accountable.

We need to approach our insurance crisis with common sense. With the passage of these proposals, I am confident that we can restore some fairness and trust to our system of insurance regulation. I ask your help in this by contacting your legislators and other legislators throughout the state in support of these reforms.

NTSB concludes poor track maintenance caused Flora, Miss. train wreck

The track, owned by CN — formerly Canadian National —had been repaired in January 2004. But, because cold weather had shrunk the track, a replacement piece that was 13 feet, 2 inches was about 2 inches longer than the track it replaced. When the replacement "plug" expanded in the heat on the day of the derailment, April 6, 2004, the track buckled, the NTSB concluded. The April 6th, 2004 Amtrak train accident killed 1 and injured 46. - 7/27, Jackson Clarion-Ledger

Feds lease oil drilling rights three miles from MS Gulf Coast

Members of the 12 Miles South Coalition and the Mississippi Chapter of the Sierra Club say they fear more gas or oil platforms any closer would clutter the horizon, compromise the national parks and jeopardize the Coast's chance to be a tier I tourist destination. - The Sun Herald - 7/17

Mississippi to distribute free gunlocks to reduce firearms accidents

Thousands of free gun locks should be handed out to Mississippi residents by the end of the year as part of a national program sponsored by the National Shooting Sports Foundation. The 2004 program, funded by a $50 million grant from the Department of Justice, gave out 20 million gun locks nationwide. Funding for 2005 was cut by $15 million, and 13 million locks will be distributed nationwide. Sun Herald, 7/17

Doctors Gouged By Insurance Companies Again

FALLING CLAIMS AND RISING PREMIUMS IN THE
MEDICAL MALPRACTICE INSURANCE INDUSTRY
by
Jay Angoff
Of Counsel
Roger Brown & Associates
216 East McCarty Street
Jefferson City, MO 65101
Commissioned by: Center for Justice & Democracy
Released by:
Alliance for Justice
Center for Justice & Democracy
Consumer Federation of America
Public Citizen
USAction
U.S. PIRG
July 2005
i
Executive Summary
This Report analyzes the 2000-2004 performance of each of the 15 largest medical malpractice
insurers in the United States rated by A.M. Best, the principal rating service for the insurance industry.
The Report is based primarily on data from the carriers’ 2004 Annual Statements filed with state
insurance departments.
The Report finds the following:
* Over the last five years the amount the major medical malpractice insurers have collected in
premiums has more than doubled, while their claims payouts have remained essentially flat.
* Some malpractice insurers substantially increased their premiums while both their claims
payments and their projected future claims payments were decreasing.
* Malpractice insurers accumulated record amounts of surplus over the last three years.
Taken together, the malpractice carriers analyzed increased their net premiums by 120.2% during
the period 2000-2004, although their net claims payments rose by only 5.7%. Thus, they increased their
premiums by 21 times (120.2/5.7 = 21.09) the increase in their claims payments.
As a result of these two dramatically different trends, the ratio between these insurers’ claims
payments and premiums fell by more than half between 2000 and 2004: it declined from 69.9% to
33.6% on a net basis, and from 68.8% to 32.1% on a gross basis. Put another way, in 2004 the leading
medical malpractice insurers took in approximately three times as much in premiums as they paid out in
claims.
Moreover, several insurers substantially increased their premiums even though their claims
payments actually fell--and fell substantially. For example:
ii
* Healthcare Indemnity, Inc. (HCI), an affiliate of HCA corporation, increased its premiums by
million, or 88%, while its claims payments fell by $74 million, or 32%. As a result, in 2004 it paid
out only 43 cents in claims for each premium dollar it collected.
* ProNational, an affiliate of ProAssurance Corporation, increased its premiums by $87 million,
or 79%, while its claims payments fell by $43 million, or 63%. As a result, in 2004 it paid out only 13
cents in claims for each premium dollar it collected.
* Medical Assurance, another ProAssurance affiliate, increased its premiums by $151 million,
or 89%, while its claims payments fell by a third. As a result, in 2004 it paid out only 10 cents in claims
for each premium dollar it collected.
In addition, Lexington Insurance Company, an affiliate of AIG, reported that its net written
premiums increased from $21.1 million in 2000 to 483.0 million in 2004—an increase of $461.9
million, or 2200%--while its net paid losses increased by only $52.9 million. As a result, in 2004 it paid
out only 14 cents in claims for each premium dollar it collected.
Finally, even the ratio between the amount the leading malpractice insurers estimated they would
pay out in the future and the premiums they earn--what insurers somewhat counter-intuitively call their
“incurred loss” ratio--declined by almost 25% between 2000 and 2004. Due to this decline--which is in
addition to the decline in the amounts these insurers have actually been paying out--they estimated in
2004 that they would ultimately pay out in claims only 51.4 cents of each premium dollar they earned.
Perhaps most striking, in 2004 these 15 insurers taken together increased their earned premium by 9.3%,
even though their incurred losses--the amount they estimated they would pay out in the future--declined
by 21.1%.
Because of the overall surge in malpractice premiums with no corresponding surge in claims
payments during the last five years, the leading malpractice insurers have increased their surplus by
more than a third in only three years, and they are now charging more for malpractice insurance than
iii
either their actual payments in malpractice cases or their estimated future payments in malpractice cases
would justify.
TABLE OF CONTENTS
Executive Summary……………………………………………………………………………………….i
I. Introduction…………………..………………………………………………………………………..1
II. Methodology…………………………………………………………………………………………...2
A. Written premiums vs. paid losses………………………………………………………….2
B. Earned premiums vs. projected losses……………………………………………………..3
C. Surplus analysis……………………………………………………………………………4
III. Findings……………………………………………………………………………………………4
A. Written premiums vs. paid losses……………………………………………………….…4
B. Earned premiums vs. projected losses……………………………………………………13
C. Surplus analysis…………………………………………………………………………..17
D. A note about medical malpractice insurance stock performance……………………...…19
IV. Conclusion………………………………………………………………………………………..20
Appendix………………………………………………………………………………………………….21
1
I. Introduction
This Report analyzes the 2000-2004 performance of the 15 largest A.M. Best-rated1
medical malpractice insurance companies in the United States based primarily on data from their
2004 Annual Statements filed with state insurance departments. The insurers analyzed include
both investor-owned stock companies, such as AIG-affiliate Lexington Insurance Company, and
doctor-owned mutual companies, such as ISMIE Mutual Insurance Company in Illinois.
The Report analyzes the performance of these insurers, who account for the majority of
the medical malpractice business written in the United States, in three different ways:
• it compares the amount they have collected in premiums in each of the last five years to
the amount they have paid out in claims in each of those years;
• it compares the premiums they have earned in each of those years to the amount they
projected they would ultimately pay out on policies in effect in each of those years; and
• it analyzes the growth during the past three years in each insurer’s surplus--the extra
cushion the insurer holds in addition to the amount it has set aside to pay projected future
claims.
The Report finds the following:
• Over the last five years the amount the major medical malpractice insurers have collected
in premiums has more than doubled, while their claims payouts have remained essentially
flat.
• Some malpractice insurers substantially increased their premiums even while both their
actual claims payments and their estimated future claims payments decreased.
1 A.M. Best, headquartered in Oldwick, New Jersey, is the principal rating agency for the insurance industry. All 15 insurers are rated at
least B+ (Very Good) by Best’s. Eleven are rated A- (Excellent) or better. The only major malpractice insurance company not rated by
Best’s is Medical Liability Mutual Insurance Company (MLMIC), which writes almost exclusively in New York and does not disclose its
surplus in its Annual Statement.
2
• Malpractice insurers have accumulated record amounts of surplus over the last three
years. As a result, the surplus the leading medical malpractice insurers now hold is
almost double the amount the National Association of Insurance Commissioners deems
adequate for those insurers.
II. Methodology
A. Written premiums vs. paid losses
The performance of insurance companies can be measured in several ways. The first is to
compare the premiums an insurance company collects in a given year--known as “written
premium”--with the amount the insurer pays out in claims in a given year--known as “paid
losses.” This comparison can be done on a “gross” or “net” basis. A gross analysis analyzes the
amounts the insurer takes in and pays out before accounting for reinsurance--reinsurance is the
insurance insurers themselves buy to cover claims above a certain amount, or to pay portions of
certain claims. A net analysis, in contrast, analyzes the amounts the insurer takes in and pays out
after accounting for reinsurance. This Report compares written premiums to paid losses on both
a gross and a net basis.
Comparing the premiums an insurer takes in in a given year with the claims it pays out in
that same year does not provide a complete picture of its performance, since claims paid out in a
given year are typically covered by policies written in prior years. Nevertheless, the trend in an
insurer’s written premiums and paid losses over several years is one relevant indicator of an
insurer’s performance. This Report shows that trend for each insurer during the past five years,
and also sets forth the ratio between the insurer’s losses and premiums for each of those years.
That ratio is referred to as the paid loss ratio.
3
B. Earned premiums vs. projected losses
Another way to measure the performance of an insurance company is to compare the
premiums it earns in a given year with the claims it projects it will pay in future years on policies
in effect in that year.
Earned premium refers to the portion of the premium that is attributable to a particular
period of coverage. For example, if a policy covering the period July 1, 2004 through June 30,
2005 costs $100, the insurance company writes $100 in premium for calendar year 2004, but
earns only $50 in premium for calendar year 2004, since only half of the coverage provided by
that policy occurs in 2004. Because insurance companies continually write policies, earned
premium and written premium typically do not differ greatly.
The claims an insurer projects it will ultimately pay that are covered by premiums earned
in a given year are referred to as the insurer’s “incurred losses” for that year. To the lay person
the term “incurred losses” is misleading, since an insurer’s “incurred losses” are not payments
the insurer has made but rather are estimates of the claims the insurer projects it will pay in the
future which ultimately may or may not be paid. In fact, many malpractice insurers have in the
past posted incurred loss estimates that ultimately proved to be substantially overstated --
sometimes by as much as 40%. Accordingly, insurers acknowledge in their Annual Statements
that their reserves – the amount they have set aside to pay their projected incurred losses – are
likely to be materially inaccurate and in the past have been materially inaccurate. Nevertheless,
insurers and regulators typically use the incurred loss ratio as a measure of profitability. The
Report therefore sets out the insurers’ earned premium and projected losses, along with the ratio
between those two numbers, for each of the last five years. That ratio is referred to as the
incurred loss ratio.
4
C. Surplus analysis
Surplus is the extra cushion an insurance company accumulates over and above the
amount it has set aside to pay its estimated future claims. A company increases its surplus to the
extent that, after setting aside a sufficient amount to pay all projected future claims, it both earns
a profit and declines to distribute that profit to its shareholders (in a stock company) or
policyholders (in a mutual company). The National Association of Insurance Commissioners
(NAIC) has developed a formula, based on the risk assumed by the insurer and the quality of the
assets it holds, that calculates the level of surplus the NAIC views as adequate for each company.
This Report analyzes the change in each insurer’s surplus during the most recent threeyear
period--the period during which insurers have publicly maintained that their surplus is being
threatened by increasing claims payments. It also compares each insurer’s actual surplus as of
December 31, 2004 to the surplus the NAIC deems adequate for that company.
III. Findings
A. Written premiums vs. paid losses
Whether one looks at gross or net paid losses, the amount the 15 leading medical
malpractice insurers have taken in in premiums during the 2000-2004 period has more than
doubled, whereas the amount they have paid out in claims has remained essentially constant.
Specifically, as Table 12 and Chart 1 indicate, the net written premiums of those insurers grew by
120.2%, while their net paid losses grew by only 5.7%.
2 For all companies except Lexington, Continental Casualty and Evanston, the source of the data in the tables is the Five Year Historical
Data pages from the 2004 Annual Statements. For Lexington, Continental Casualty, and Evanston, the source of the data in the tables is
pages 6-9 of each Annual Statement between 2000 and 2004. The Annual Statement for each of those years for each of those three carriers
had to be reviewed because the Five-Year Historical Data pages in the 2004 Annual Statement do not break out data by line of insurance
within a company, and unlike the other 12 carriers Lexington, Continental and Evanston write substantial amounts of other types of
insurance in addition to medical malpractice.
5
Table 1
Net Written Premium vs. Net Losses Paid,
2000-2004 (in millions of dollars)
Company3 2000 2001 2002 2003 2004 Change
MedPro NPW 267.1 345.0 538.4 713.5 526.3 +97.0%
NPL 152.4 151.9 190.4 216.9 257.8 +69.2%
Ratio 57.0% 44.0% 35.4% 30.4% 49.0%
Lexington NPW 21.1 94.2 274.5 442.7 483.0 +2200.0%
NPL 12.2 33.4 25.9 14.6 65.1 +433.6%
Ratio 58.1% 35.5% 9.4% 3.3% 13.5%
TDC NPW 209.7 274.1 389.2 332.0 457.2 +118.0%
NPL 115.1 123.8 171.5 167.6 143.2 +24.4%
Ratio 54.8% 45.2% 44.1% 50.5% 31.1%
HCI NPW 197.1 260.3 318.6 377.0 370.1 +87.8%
NPL 231.8 168.0 182.5 190.7 157.6 -32.0%
Ratio 117.6% 64.5% 57.3% 50.6% 42.6%
Continental NPW 114.3 89.5 196.5 245.1 347.1 +232.8%
NPL 208.7 188.7 71.5 -79.4 157.0 +24.8%
Ratio 182.6% 210.8% 36.4% -32.4% 45.2%
MedAssurance NPW 170.5 156.9 227.0 294.2 321.7 +88.7%
NPL 48.2 68.1 62.5 48.1 32.0 -33.6%
Ratio 28.3% 43.4% 27.5% 16.3% 9.9%
ProMutual NPW 98.1 127.0 171.2 190.9 263.4 +168.4%
NPL 115.7 107.8 78.8 90.6 93.6 -19.1%
Ratio 117.9% 84.8% 46.0% 47.5% 35.6%
MAG Mutual NPW 82.7 114.1 142.2 157.2 256.6 +210.2%
NPL 38.1 40.4 60.5 77.2 83.3 +118.4%
Ratio 46.1% 35.4% 42.6% 49.1% 32.5%
ISMIE NPW 139.4 175.5 217.5 276.8 223.8 +60.1%
NPL 129.8 115.1 119.4 126.2 126.6 -2.5%
Ratio 93.1% 65.6% 54.9% 45.6% 56.6%
Norcal NPW 129.3 170.3 169.2 201.2 200.8 +55.3%
NPL 52.8 70.1 82.0 81.5 69.7 +32.0%
Ratio 40.8% 41.2% 48.5% 40.5% 34.7%
ProNational NPW 110.1 132.1 148.7 193.0 197.2 +79.1%
NPL 67.6 77.3 56.9 53.1 25.0 -63.0%
Ratio 61.4% 58.5% 38.3% 27.5% 12.7%
AP Capital NPW 157.1 179.6 208.7 109.8 170.9 +8.8%
NPL 61.8 90.1 117.3 118.3 64.6 +4.5%
Ratio 39.4% 50.2% 56.2% 107.7% 37.8%
State Vol. NPW 77.4 94.5 130.8 135.2 150.0 +93.9%
NPL 41.8 54.5 56.6 50.7 70.7 +69.1%
Ratio 54.0% 57.6% 43.2% 37.5% 47.1%
FPIC NPW 110.3 93.6 94.0 103.4 136.5 +23.7%
NPL 45.0 53.2 48.3 27.9 49.1 +9.1%
Ratio 40.7% 56.9% 51.4% 27.0% 35.9%
Evanston NPW 38.1 60.4 123.3 137.3 128.5 +237.3%
NPL 23.4 21.1 30.0 32.1 26.0 +11.1%
Ratio 61.4% 34.9% 24.3% 23.4% 20.2%
Totals NPW 1,922.2 2,367.1 3,349.8 3,909.3 4,233.1 +120.2%
NPL 1344.4 1363.5 1354.1 1216.1 1421.3 +5.7%
Ratio 69.9% 57.6% 44.4% 31.1% 33.6%
3 Appendix A sets forth the full name of the company, along with its insurance holding company parent, if any, and its Best’s rating. It
also lists the states in which the company writes medical malpractice coverage.
6
120.2%
5.7%
0%
25%
50%
75%
100%
125%
150%
Premiums Increase
(Net Premiums Written)
Payout Increase
(Net Losses Paid)
Chart 1
Net Premiums Written vs. Net Losses Paid,
2000-2004
The difference between the leading malpractice insurers’ written premiums and paid
losses on a gross basis is similarly stark: as Table 2 and Chart 2 indicate, their gross written
premiums increased by 134.5% between 2000 and 2004, while their gross paid losses rose by
only 9.6%.
7
Table 2
Gross Written Premium vs. Gross Losses Paid,
2000-2004 (in millions of dollars)
Company 2000 2001 2002 2003 2004 Change
Lexington GPW 71.8 170.4 567.4 788.9 778.6 +984.4%
GPL 23.9 75.7 65.9 100.1 124.2 +419.7%
Ratio 33.3% 44.4% 11.6% 12.7% 16.0%
MedPro GPW 296.8 380.2 586.5 849.3 736.5 +148.1%
GPL 200.2 189.3 230.0 250.9 296.8 +48.2%
Ratio 67.5% 49.8% 39.2% 29.5% 40.3%
TDC GPW 236.6 311.3 428.1 431.3 489.6 +106.9%
GPL 130.4 140.7 196.0 197.5 155.0 +18.9%
Ratio 55.1% 45.2% 45.8% 45.8% 31.7%
ISMIE GPW 164.8 209.0 265.6 364.3 425.3 +158.1%
GPL 163.8 141.3 158.1 165.2 153.4 -6.3%
Ratio 99.4% 67.6% 59.5% 45.3% 36.1%
HCI GPW 243.6 288.4 344.7 386.5 382.2 +56.9%
GPL 276.8 193.5 237.3 206.9 187.1 -32.4%
Ratio 113.6% 67.1% 68.8% 53.5% 49.0%
MAG Mutual GPW 87.8 131.4 216.3 286.9 358.7 +308.5%
GPL 48.8 50.8 79.1 95.6 102.7 +110.5%
Ratio 55.5% 38.7% 36.6% 33.3% 28.6%
Med Assurance GPW 196.3 224.5 292.3 335.8 357.0 +81.9%
GPL 76.4 96.4 83.5 60.5 59.9 -21.6%
Ratio 38.9% 42.9% 28.6% 18.0% 16.8%
ProMutual GPW 107.0 148.4 182.8 216.2 273.3 +155.4%
GPL 117.9 117.7 84.0 92.3 100.6 -14.7%
Ratio 110.2% 79.3% 46.0% 42.7% 36.8%
FPIC GPW 179.3 212.2 295.8 287.0 285.2 +59.1%
GPL 59.7 79.1 70.3 78.9 101.0 +70.4%
Ratio 33.3% 37.3% 23.8% 27.5% 35.7%
State Vol. GPW 98.0 120.4 164.0 212.6 241.5 +146.4%
GPL 51.7 61.8 64.1 59.3 76.9 +48.8%
Ratio 52.7% 51.3% 39.1% 27.9% 31.8%
Norcal GPW 150.7 179.0 181.9 212.2 209.5 +39.0%
GPL 57.4 85.0 89.8 86.1 73.7 +28.4%
Ratio 38.0% 47.5% 49.4% 40.6% 35.2%
ProNational GPW 139.6 151.9 167.8 203.6 207.5 +48.6%
GPL 81.4 89.4 68.2 67.5 39.4 -51.6%
Ratio 58.3% 58.9% 40.6% 33.2% 19.0%
Continental GPW 72.2 140.2 177.5 173.0 196.6 +172.3%
GPL 165.7 150.7 151.8 111.9 108.4 -34.6%
Ratio 229.5% 107.5% 85.5% 64.7% 55.2%
AP Capital GPW 170.0 209.7 236.8 135.7 192.3 +13.1%
GPL 69.7 109.2 142.1 142.9 88.1 +26.5%
Ratio 41.0% 52.1% 60.0% 105.3% 45.8%
Evanston GPW 45.1 78.1 171.2 182.4 164.5 +264.7%
GPL 26.2 23.7 36.1 38.4 30.9 +17.9%
Ratio 58.1% 30.3% 21.1% 21.6% 18.8%
Totals GPW 2,259.6 2,955.1 4,278.7 5,065.7 5,298.3 +134.5%
GPL 1,550.0 1,604.2 1,756.3 1,754.0 1,698.8 +9.6%
Ratio 68.6% 54.3% 41.0% 34.6% 32.1%
8
134.5%
9.6%
0%
25%
50%
75%
100%
125%
150%
Premiums Increase
(Gross Premiums Written)
Payout Increase
(Gross Losses Paid)
Chart 2
Gross Premiums Written vs. Gross Losses Paid,
2000-2004
Put another way, between 2000 and 2004 the increase in the premiums collected by the
15 leading malpractice insurers was 14 times as great as the increase in their claims payments on
a gross basis (134.5/9.3 = 14.01), and 21 times as great as the increase in those payments on a net
basis (120.2/5.7 = 21.09).
As a result of this surge in premiums while claims payments remained virtually
unchanged, the paid loss ratio for the leading medical malpractice insurers fell by more than half
between 2000 and 2004: it declined from 69.9% to 33.6% on a net basis, and from 68.8% to
32.1% on a gross basis. Looked at another way, in 2004 the leading medical malpractice
insurers took in approximately three times as much in premiums as they paid out in claims.
9
Moreover, several insurers substantially increased their premiums even though their claims
payments fell substantially, as Chart 3 indicates.
Chart 3
Change in Premium vs. Change in Claims Payments,
Net Basis, 2000-2004
+88.0% +79.1% +88.7%
+2200.0%
-32.0%
-63.0% -33.6%
+433.6%
-500%
0%
500%
1000%
1500%
2000%
2500%
HCI ProNational MedAssurance Lexington
Company
Percentage Change
Premiums Payouts
For example, HCI increased its net premiums by $173 million, or 88%, during the same period in
which its claims payments fell by $74.2 million, or 32%. Even more striking is the divergence between
the premiums and claims payments of Medical Assurance and ProNational, both of which are
subsidiaries of the same parent company, ProAssurance Corporation. Unlike HCI, both those companies
had net written premium which already exceeded their claims payments in 2000, yet they continued to
increase their premiums substantially while their claims payments declined substantially. ProNational,
for example, had net premiums of $110.1 million and net claims payments of $67.6 million in 2000, for
a paid loss ratio of 61.4%. Yet over the next four years it increased its premiums by $87.1 million, or
79%, while its claims payments fell by $42.6 million, or 63%, as Chart 4 indicates.
10
Chart 4
ProNational Net Written Premium vs. Net Paid Losses,
2000-2004 (in $millions)
0
50
100
150
200
250
2000 2001 2002 2003 2004
Year
Amount
Written Premiums
Paid Losses
As a result of these countervailing trends, in 2004 ProNational had a paid loss ratio of only 12.7%, i.e., it
was paying out less than 13 cents in claims for each dollar it was collecting in premium.
More striking still, in 2000 Medical Assurance reported a paid loss ratio of only 28.3%--it took
in $170.5 million in premium while paying out only $48.2 million in claims. Nevertheless, over the next
four years, Medical Assurance increased its premiums by $151 million, or 89%, while its claims
payments declined by a third as, Chart 5 indicates.
11
Chart 5
Medical Assurance Net Written Premium vs. Net Paid Losses,
2000-2004 (in $millions)
0
50
100
150
200
250
300
350
2000 2001 2002 2003 2004
Year
Amount
Written Premium
Paid Losses
As a result, in 2004 Medical Assurance took in $322 million in premiums but paid out only $32 million
in claims, for a paid loss ratio of 9.9%. In other words, it was paying out only 10 cents in claims for
each dollar it was collecting in premium.
The most striking results of all, however, were reported by AIG subsidiary Lexington Insurance
Company. As Chart 6 indicates, Lexington reported that its net written premiums increased from $21.1
million in 2000 to 483.0 million in 2004—an increase of $461.9 million, or 2200%--while its net paid
losses increased by only $52.9 million.
12
Chart 6
Lexington Net Written Premium vs. Net Paid Losses,
2000-2004 (in $millions)
0.0
100.0
200.0
300.0
400.0
500.0
600.0
2000 2001 2002 2003 2004
Year
Amount
Net Premium Written
Net Losses Paid
As a result, Lexington had a paid loss ratio of only 13.5% in 2004. Moreover, during the three
year period 2001-2003, in which Lexington increased its net premiums from $94 million to $442
million, or by 370%, its paid losses fell by 56.3%, from $33.4 million to $14.6 million. As a result, in
2003 Lexington had a paid loss ratio of only 3.3%--i.e., it paid out 3.3 cents in claims for each premium
dollar it collected. Notwithstanding the malpractice insurance industry’s insistence that it is insuring
fewer doctors today than in the past, it is possible that Lexington is insuring more doctors today than in
the past; if so, its premium volume could increase substantially even if its rates did not.4 It strains
4 To be sure, because claims paid out in a given year are typically covered by policies written in prior years, one would not expect paid losses to increase at
the same rate as premiums if an insurer were loosening its underwriting standards—i.e., insuring more doctors. According to the Physicians Insurers
Association of America, however, insurers have been tightening their underwriting standards, and thus insuring fewer doctors. For example, on February 17,
2005, PIAA president Larry Smarr told Congress that “the recent exodus from and transformation of the market is of such magnitude that the carriers
remaining do not have the underwriting capacity to take all comers,” that “many of the carriers remaining in the market are forced to tighten their
underwriting standards,” and that “this includes the withdrawal from recently expanded markets.” Testimony of Larry Smarr before the House Small
Business Committee, Feb. 17, 2005, at 3 (available at www.thepiaa.org). If what the PIAA told Congress is accurate, then the leading medical malpractice
insurers are not only paying out less while taking in more—they are paying out less while both taking in more and insuring fewer doctors.
13
credulity, however, to believe that since 2000 the number of doctors insured by Lexington could have
increased by anywhere near the 2200% by which its premiums have increased.
The amount paid out in claims in 2004 for each dollar of premium collected in 2004 by
ProNational, Medical Assurance and Lexington is shown in Chart 7:
Chart 7
Claims Payments Per Dollar of Premium Collected,
2004
%t.00
%t.25
%t.50
%t.75
.00
ProNational Medical Assurance Lexington
Company
Payment
12.7¢
9.9¢
13.5¢
B. Earned premiums vs. projected losses
Like their paid loss ratios, the incurred loss ratios of the 15 leading malpractice insurers
have plummeted: as Table 3 indicates, the average incurred loss ratio for those carriers fell by
almost 25% during the period 2000-2004, to 51.4%. Looked at another way, those carriers taken
together earned in premiums in 2004 almost twice as much as they estimated they would
ultimately pay out in claims on those premiums.
14
Moreover, all but one carrier reduced its incurred loss ratio between 2003 and 2004, all
15 had 2004 incurred loss ratios of 62.6% or less, 12 had incurred loss ratios of less than 60%,
and six had incurred loss ratios of less than 50%. By way of comparison, the average incurred
loss ratio for the property-casualty insurance industry as a whole during the most recent reported
10-year period was 67.5, according to the NAIC5. Each of the 15 leading medical malpractice
insurers thus had a 2004 incurred loss ratio that was far more favorable than the long-run
industry average.
Table 3
Ratio Of Projected Losses To Earned Premiums:
Largest Medical Malpractice Insurers, 2000-2004
5 NAIC Report on Profitability by Line by State in 2003 (NAIC 2004).
Company 2000 2001 2002 2003 2004 Change
2000-2004
Change
2003-2004
ISMIE 83.6 72.4 100.7 73.2 60.8 -27.30% -16.90%
MAG Mutual 66.8 58.4 81.3 61.9 60.4 -9.60% -2.40%
TDC 42.5 73.5 69.1 69.4 54.1 27.30% -22.00%
MedPro 41.1 50.4 78.9 63 50.7 23.40% -19.50%
ProMutual 128.9 117.6 101.4 96.5 59.7 -53.70% -38.10%
AP Capital 58.8 90.5 75.7 82.3 55.2 -6.10% -32.90%
State Volunteer 75.9 69.6 72.3 51.7 54.2 -28.60% +4.80%
HCI 74.4 97.2 88.1 89.1 47.6 -36.00% -46.60%
Norcal 56.9 60.5 41.7 46.5 46.1 -19.00% -0.70%
FPIC 70.6 72.9 64.1 55.8 42.2 -40.20% -24.40%
MedAssurance 21.7 45.9 45.9 45.3 34.4 58.50% -24.10%
ProNational 82.4 93.8 61.4 50.8 33.1 -59.80% -34.80%
CCC 62.1 215.4 54.1 81.5 62.6 0.1% -18.9%
Evanston 75.7 63.8 58.8 50.8 43.1 -43.1% -7.7%
Lexington 71.8 153.8 56.9 85.3 57.0 -14.8% -33.2%
Average (nonweighted),
all 15
insurers
68.0 100.0 67.3 68.0 51.4 -24.4% -24.4%
15
Notably, two insurers--ProNational and Medical Assurance--had extraordinarily low
2004 incurred loss ratios of 33.1% and 34.4%, respectively. Thus, those insurers earned in
premium in 2004 approximately three times as much as they projected they would ultimately pay
out in claims covered by those premiums.
Perhaps most significant, as Table 4 indicates, in 2004 the 15 leading malpractice carriers
taken together increased their premiums while at the same time reducing the amount they
projected they would ultimately pay out on those premiums: their earned premiums rose by
9.3%, while their incurred losses fell by 21.1%.
16
Table 4
Earned Premium vs. Incurred (Projected) Losses,
2003-2004
(in millions of dollars)
Most impressive, as Chart 8 indicates, were the performance of Lexington, which
increased its premiums by 22.4% while projecting an 18.2% decline in its future payments; AP
Capital, which increased its premiums by 23.9% while projecting a 17% decline in future
ChangCompany 2003 2004 2003-20e0 4
MedPro EP 701.8 555.0 -20.9%
IL 441.9 281.2 -36.4%
Lexington EP 364.5 446.3 +22.4%
IL 311.0 254.5 -18.2%
TDC EP 331.3 444.4 +34.1%
IL 230.0 240.5 +4.6%
HCI EP 374.7 369.4 -1.4%
IL 334.0 175.7 -47.4%
MedAssurance EP 274.0 317.9 +16.0%
IL 124.1 109.2 -12.0%
Continental EP 227.3 293.3 +29.0%
IL 185.3 183.5 -1.0%
ISMIE EP 257.7 247.8 -3.8%
IL 188.6 150.7 -20.1%
ProMutual EP 182.6 232.2 +27.3%
IL 176.2 138.7 -21.3%
MAGMutual EP 131.4 201.3 +53.3%
IL 121.6 81.3 -33.1%
Norcal EP 202.1 198.7 -1.7%
IL 94.0 91.6 -2.6%
ProNational EP 178.9 190.8 +6.7%
IL 91.0 63.2 -30.5%
APCapital EP 146.4 181.4 +23.9%
IL 120.5 100.0 -17.0%
StateVolunteer EP 116.3 140.4 +20.8%
IL 60.1 76.1 +26.6%
Evanston EP 131.3 134.4 +2.4%
IL 66.7 57.9 -13.2%
FPIC EP 95.1 106.1 +11.5%
IL 53.1 44.8 -15.7%
Totals EP 3715.4 4059.4 +9.3%
IL 2598.1 2048.9 -21.1%
17
payments; ProMutual, which increased its premiums by 27.3% while projecting a 21.3% decline
in future payments; and MAG Mutual, which increased its premiums by 53.3% while projecting
a 33.1% decline in future payments.
Chart 8
C. Surplus analysis
As a result of having increased their premiums while reducing both their actual and
projected claims payments over the last several years, the leading medical malpractice insurers
have substantially increased their surplus. Specifically, the twelve “monoline” medical
malpractice insurers--those which write primarily medical malpractice insurance--increased their
surplus by an average of more than 34% between 2002 and 2004. Two of those insurers--
Healthcare Indemnity and Norcal--increased their surplus by more than 50%. See Table 5.
Premium Increases vs. Projected Claims Payment Decreases,
2003-2004
22.4%
23.9%
27.3%
53.3%
-18.2%
-21.3%
-33.1%
-17.0%
-50.0%
-25.0%
0.0%
25.0%
50.0%
75.0%
Lexington AP Capital ProMutual MAG Mutual
Premiums Projected payouts
18
Table 5
Increase In Surplus,
12 Monoline Medical Malpractice Insurers,
2002-2004
(in millions of dollars)
Company 2002
Surplus
2003
Surplus
2004
Surplus
Dollar Change
2002-2004
Percent Change
2002-2004
HCI 482.5 626.5 767.8 285.3 59.1%
MedPro 401.7 442.9 510.8 109.1 27.2%
TDC 341.4 350.2 405.6 64.2 18.8%
ProMutual 300.3 342.7 378.5 78.2 26.0%
Norcal 204.2 246.0 309.1 104.9 51.4%
MedAssurance 193.3 238.7 276.9 83.6 43.2%
ProNational 197.0 187.9 241.8 44.8 22.7%
ISMIE 170.5 201.7 212.5 42.0 24.6%
AP Capital 163.5 113.3 200.1 36.6 22.4%
MAG Mutual 142.9 177.2 194.9 52.0 36.4%
State Volunteer 129.3 155.9 167.9 38.6 29.8%
FPIC 110.8 118.9 145.4 34.6 31.2%
Totals 2837.4 3201.9 3811.3 973.9 34.3%
As a result of these substantial additions to surplus, the surplus of each of the twelve
monoline medical malpractice insurers now substantially exceeds the surplus the NAIC deems
adequate for the company. In particular, seven of those 12 insurers--Medical Protective, The
Doctors Company, Norcal, AP Capital, MAG Mutual, FPIC, and State Volunteer Mutual--have
surplus of more than twice the amount the NAIC deems adequate, and one--FPIC--has almost
three times the surplus the NAIC views as adequate. See Table 6.
19
Table 6
Excess Surplus
12 Largest Monoline Medical Malpractice Insurers, 2004
(in millions of dollars)
Company Actual
Surplus
Adequate
Surplus
(per
NAIC)6
Excess
Surplus
Actual As %
Of Adequate
HCI 767.8 418.5 349.3 183.5%
MedPro 510.8 213.2 297.6 239.6%
TDC 405.6 162.0 243.6 250.4%
Norcal 309.1 120.0 189.1 257.6%
MedAssurance 276.9 149.1 127.8 185.7%
ProNational 241.8 126.6 115.2 191.0%
AP Capital 200.1 85.7 114.4 233.6%
MAG Mutual 194.9 90.2 104.8 216.2%
ISMIE 212.5 110.6 101.9 192.1%
FPIC 145.4 49.1 96.3 295.9%
State Volunteer 167.9 80.9 86.9 207.4%
ProMutual 378.5 302.4 76.0 125.1%
Totals 3811.3 1908.3 1902.9 199.7%
The three leading medical malpractice insurers who also write substantial amounts of
other types of insurance also greatly increased their surplus between 2002 and 2004. However,
they do not allocate their surplus by line in their Annual Statements, and therefore their surplus is
not included in Tables 5 and 6.
D. A note about medical malpractice insurance stock performanc

Feet and Leg Injuries on the Rise in Car Accidents

While car and truck manufacturers have reduced the fatality rate in traffic accidents through improved seatbelts and airbags, feet and leg injuries remain a preventable injury that they continue to neglect in their designs. Read more about this problem.

Guess Who Pays for Medical Malpractice Now?

Virginia Carlos Diaz Centreville, VA Belarmino and Marta Diaz brought their 3-month-old son, Carlos, to the hospital for needed surgery to repair a hernia. But Carlos never made it to surgery because his anesthesia was not correctly administered. Afterward, his heart stopped beating for a half hour while doctors tried to revive him. By the time they got him back, Carlos had lost so much oxygen that he suffered severe brain damage. He is now in a vegetative state. Carlos' future medical care at the time of injury was estimated to cost $3.1 million. However, their settlement was limited by Virginia's insurance industry-backed medical malpractice cap. Carlos' father works 60 or more hours a week at two jobs to pay the bills and his mother, Marta, quit her job to stay home and care for Carlos full-time. The family must also rely on public assistance for Carlos to help afford his medical care. Jennifer Scollick brought her 21-day-old baby, Bethany, into the emergency room because she had been vomiting and had not eaten for almost two days. Despite a high possibility of dehydration, Jennifer was told to sit in the waiting room until they could be seen. Bethany began to look sicker while they were waiting, and Jennifer went to the desk to tell the nurse several times. She was told to have a seat, and that everyone was an emergency. Five hours later a doctor finally saw Bethany, but it was too late. During the long wait in the ER, Bethany suffered a disabling stroke that has deprived her of any meaningful mobility and most of her senses. Pictured left in her mother's arms, Bethany is now three years old, but has the mental capability of a 3 month old.

Criminal Insurance Companies

More AIG Execs Could Face Scrutiny

NEW YORK (CNN/Money) - The probe of questionable accounting at embattled insurer American International Group could extend beyond the former top executives who have already been forced to leave the firm, according to a published report Tuesday.

The Wall Street Journal reported that those familiar with the multiple probes say they believe knowledge of and participation in what was known as "top level" accounting adjustments extended beyond former Chairman and CEO Maurice "Hank" Greenberg and former Chief Financial Officer Howard Smith, both of whom were forced out in March due to the accounting questions. Neither have been charged with any wrongdoing.

But the paper said that, in recent weeks, AIG (Research) has sought to distance current management from the questionable accounting practices-- including charges that the company shaved reserve levels, moved expenses and revenue between quarters, and mislabeled some capital gains as investment income in order to hit earnings targets.

However, the paper reports that authorities in the interlapping probes now believe the extensive nature of the problems may make it less likely that the departed executives were solely responsible for the practices.

The paper said that the more AIG executives who knew about any such practices, the more problems the insurer faces as it struggles to resolve the probes.

Shares of AIG, a component of the Dow Jones industrial average, gained 44 cents to $54.88 in trading Monday.

More Insurance Company Lies

Legal myths: Hardly the whole truth

By Jonathan Turley

Have you heard about the guy who injured himself while using his lawn mower as a hedge clipper, and then won $500,000 in a lawsuit against the lawn mower company? How about the woman who threw a soft drink at her boyfriend, slipped on the wet floor, and then won $100,000 in a lawsuit against the restaurant? These are only two of the common examples of lawsuit abuses that are fueling the call for "litigation reform." They are also completely untrue — part of a growing collection of legal mythologies that are appearing widely in the national media.
Image is everything in tort reform, such as President Bush's visit earlier this month to a "judicial hellhole" in Illinois where tort cases supposedly flourish. He has made tort reform a priority of his second term and is expected to repeat these calls in his State of the Union address Wednesday. It is all part of a well-funded campaign to limit damages against companies and physicians across the country.

Horror stories offered by industry groups play to a weakness in the media for "you-are-not-going-to-believe-this" stories. Of course, it is not surprising that the stories are unbelievable — because many never occurred.

Take the ubiquitous hedge-clipper man story. It has appeared in print, on TV programs, in law school classrooms and in political speeches for decades. Former vice president Dan Quayle used it in his call for reform (though he reportedly referred to the man cutting his hair with a lawn mower). In reality, the story originated in an ad campaign by the insurance firm Crum & Forester, which later admitted that it knew of no such case. Yet, proving that facts should never stand in the way of a good story, it remains perhaps the most cited example of abuse — the best $500,000 that the insurance industry never paid.

Bad lawyering

Even true stories often prove not to be examples of bad law, but bad lawyering. Take the list of the "wackiest consumer warnings," released this month by the Michigan Lawsuit Abuse Watch to show the need for reform. Included are such things as a warning on a toilet brush that reads, "Do Not Use for Personal Hygiene" or a sign on a scooter that reads, "This product moves when used." These are not fabrications, but none of these warnings make any more legal sense than they do practical sense. No company has to warn consumers not to use a toilet brush on their teeth or hair.

Legal legends can be irresistible, even for the most respected newspapers, magazines and networks.

U.S. News & World Reportowner Mort Zuckerman used the story of the soft drink lady in Pennsylvania in an article denouncing lawsuit abuse. He is not alone. The tale of Amber Carlson and her soda has appeared in countless television and print sources. Zuckerman also cited the case of a woman who knocked her teeth out while sneaking through a nightclub's restroom window to avoid paying a $3.50 cover charge — and then won $12,000 from a jury. It is also false.

Both stories have been attributed to the Stella Awards, an annual listing of loony lawsuits. But the Stella Web site points out that they both are complete fabrications. Yet they continue to appear in print and on the Internet.

Other examples of fabricated "true cases of lawsuit abuse":

• Kathleen Robertson of Austin received $780,000 from a jury after she tripped over her own son in a furniture store.

• Carl Truman, a 19-year-old in Los Angeles, was awarded more than $74,000 when his hand was run over by a neighbor. The neighbor did not see Truman, who was in the process of stealing his hubcaps.

• Terrence Dickson of Bristol, Pa., was given a $500,000 award after he was inadvertently trapped in the garage of a house that he was burglarizing.

• A Mr. Grazinski won more than $1,750,000 and a new Winnebago after he put his new motor home on cruise control at 70 mph and then went into the back to fix himself some coffee — only to crash on the highway.

Merely legal legends

These are the legal versions of the urban legends about alligators living in the New York City sewers. Everyone knows that alligators brought back by kids as pets from Florida have been flushed down the toilets, only to thrive below the streets of New York City.

Legal legends fit the stereotype of litigation so well that their falsity becomes secondary. Of course, law is not alone in such fabrications. Consider my favorite story about Pia Zadora's dismal performance as the lead in The Diary of Anne Frank. Zadora was so bad that, during the scene where Nazis break into the house screaming, "Where is Anne Frank?" audience members screamed, "She's in the attic!" It is a brilliant story, but I was crushed to learn recently that it is also completely untrue: Zadora has never played Anne Frank, and there is no such scene in the play.

I loved the Zadora story for the same reason people such as Zuckerman loved the fabricated lawsuit stories: They capture a critical idea with an element of humor or absurdity. There is, however, a great difference between using urban legends to dish on some actress and using them to make massive changes in the law. So, as we begin this latest debate over tort reform, one small piece of advice: If you hear about a case that is almost too good to be true, it probably isn't.

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University and has testified before Congress on tort reform. He is also a member of USA TODAY's board of contributors.

Insurance Companies Gouge Doctors Again

New Report Finds No Link Between Spike in Doctors' Insurance Rates and Medical Malpractice Lawsuits by Injured Patients

Most Recent Government Data Reveal Declining Malpractice Payouts; Real Crisis Continues to Be Inadequate Measures for Guaranteeing
Patient Safety

WASHINGTON, D.C. - The latest national data on physician malpractice payments show no evidence that the spike in doctors' insurance rates is due to lawsuits by patients, a new study by Public Citizen confirms.

At the same time that insurance rates in some areas have been climbing, the number and total value of malpractice payouts to patients have been flat since 1991 and, in fact, show a significant decline since 2001, when the spike in insurance rates began, the study found.

"The hard, factual evidence cannot be any clearer: We have no medical malpractice lawsuit crisis in America," said Joan Claybrook, president of Public Citizen. "Insurance companies may be padding their bottom lines by jacking up rates on doctors, but it is not because of patients seeking relief for bad medical care through our courts. The true crisis continues to be in inadequate measures for patient safety and incompetent medical care by a small number of physicians."

The data show that from 1990 to 2004, only 5.5 percent of doctors account for 57.3 percent of all malpractice payments. In addition, only 11.4 percent of doctors who have made three or more malpractice payouts have ever been disciplined.

For the full press release, please go to http://www.citizen.org/pressroom/release.cfm?ID=1925

The report, Medical Malpractice Payment Trends 1991-2004; Evidence Shows Lawsuits Haven't Caused Doctors' Insurance Woes, is available online at http://www.citizen.org/congress/civjus/medmal/articles.cfm?ID=13309.

Meanwhile, Public Citizen today also released its annual rankings of state medical boards. The rankings, found online at http://www.citizen.org/MedBoard, are based on data from the Federation of State Medical Boards and specify the number of disciplinary actions taken against doctors from 2002 to 2004.

Why Are your Insurance Rates So High? Here's Why.

Insurance Industry's Enron, WorldCom Losses Lead to Rate Hikes; 10 Insurers Lost $274 Million on Big 5 Corporate Frauds Property and Casualty Insurers Invested Too Heavily in Markets During Late 1990s Santa Monica-- Large liability insurance companies are demanding rate increases to offset massive investment losses, according to a new analysis of major insurance companies by the nonprofit Foundation for Taxpayer and Consumer Rights (FTCR). The insurance industry contends that consumer rate hikes are due to an explosion in the cost of paying claims, but, according to FTCR, the real reason for the rate hikes is to pay off losses associated with the companies' failed investments. Read the report: Risky Business: Insurers' Increasingly Risky Investments in Corporate America Cause Insurance Premiums to Skyrocket . "Insurance rates are increasing because insurance companies bet on Enron and WorldCom and they lost. Rather than taking responsibility for investment mistakes, insurers are forcing policyholders to make up the difference," said Harvey Rosenfield, president of FTCR According to the data: 10 companies reviewed lost $274 million on investments in the Big 5 Frauds: Enron, WorldCom, Adelphia, Global Crossing and Tyco State Farm Mutual Auto increased its level of corporate investment by 32% since 1994. The company lost $60.7 million on WorldCom investments this year, and $13.5 million on Enron last year. Allstate lost $23.3 million in the first half of 2002 as the company shed its Tyco shares. Last year, Fireman's Fund lost $40 million on WorldCom this year and $85.4 million in Winstar stocks and bonds after that company filed for bankruptcy last year. USAA had 57% of its portfolio in the stock market alone; it lost over $63 million in international energy and telecom investments through its own emerging markets fund. By 2001, the reviewed insurance companies had, on average, 57% of their investments tied up in corporate stocks and bonds. According to Dr. John W. Wilson, a Washington, D.C.-based economic consultant and insurance industry expert, "Insurers throughout the nation not only had less investment income in 2001, they also took a shellacking on the market value of their stock portfolios, which dropped by nearly $20 billion." Wilson argues that regulators must hold insurers accountable for these losses: "Insurance commissioners should look very closely before authorizing rate increases that aren't really justified and have little to do with actual loss payment requirements." Insurance Companies Increasingly Play the Markets During the stock market bubble, the analysis shows, large insurance companies dramatically increased their level of investment in corporations. FTCR compared insurers' investments in corporate stocks and bonds with overall investment portfolios, the remainder of which is largely invested in municipal bonds or similar public financing instruments. Policyholders Should Be Protected From Insurers' Risky Behavior Insurance commissioners should immediately review the impact of the change in investing habits by insurers and stop all rate hikes that are attributable to insurers' portfolio mismanagement, FTCR said. "Insurance companies are blaming consumers for the companies' financial problems, by saying that the rate hikes are due to claim costs when, in reality, it is a combination of greed and foolishness that got the insurers into trouble," said Douglas Heller, senior consumer advocate for FTCR. "This is like double jeopardy for a lot of policyholders. They lost money in their retirement accounts and now the insurance industry is imposing its losses on policyholders. Insurers ought to have invested more wisely, and the companies, not policyholders, should be punished for this recklessness."

Tort Reform Forces Doctor to Close Practice

President Bush Asked To Meet African American Doctor Forced To Close Clinics By Malpractice Insurer That Canceled Coverage Under Tort Reform Tchula, Mississippi -- A legendary Mississippi physician who was forced to close his four clinics serving the poorest Delta residents on January 1st called upon President Bush to meet with him about how his medical malpractice insurer canceled coverage using the powers of a new tort reform law in the state. Reverend Dr. Ronald Myers, who has had no malpractice claims against him in his 16 years of practice and travels 50,000 miles per year through the Delta to care for his flock, was featured on Good Morning America Wednesday morning. "It is a case of insurance company greed over human need," Dr. Myers told Good Morning America. President Bush, under the guise of saving clinics from closure, has been advocating for the tort reform measures that helped put Dr. Myers out of business. "Tort reform gave my insurer the power to cancel my coverage and close my clinics, " stated Dr. Myers. "President Bush must recognize that regulating insurance companies is the only way to force companies to make coverage available and affordable, not giving the companies greater power to discriminate." Myers states that the Medical Assurance Company of Mississippi dropped coverage for his clinics because the low income communities Myers practices in have been deemed 'judicial hellholes,' even though there has not been a single malpractice verdict in those counties. He contends racism and redlining are what is driving the insurer's decision to drop coverage. Recently enacted Mississippi tort reform legislation has given new power to the Medical Assurance Company of Mississippi, as the state's only medical malpractice insurer, to decide who and who does not practice medicine in Mississippi and where they practice. "Under the guise of 'risk management' the Medical Assurance Company of Mississippi attempted to coerce me to allow them to review all my private patient medical records without their consent," states Dr. Myers. "I was told that my medical malpractice insurance policy would not be renewed because I would not cooperate with their intrusion into my patients privacy rights. Such reckless actions by any malpractice insurance carrier should not be tolerated." Myers has sued the company, but has been forced to close his practice because his malpractice insurance policy was not renewed on January 1st. A key member of the Board of Directors of the Medical Assurance Company is Dr. J. Edward Hill, Jr., the President-elect of the American Medical Association (AMA) -- who is advocating Mississippi's tort reform measures nationally. The Santa Monica-based Foundation for Taxpayer and Consumer Rights (FTCR) is working with Dr. Myers to educate the public about the need to reform insurance companies. FTCR pioneered insurance regulation in California with insurance reform Proposition 103, which has saved doctors hundred of millions of dollars in their malpractice premiums. For more information visit: www.myersfoundation.net and www.consumerwatchdog.org/healthcare/medmal.php Or email: myersfound@aol.com or jamie@consumerwatchdog.org

Medical Mistakes Kill 44,000 to 98,000 People a Year

Medical mistakes linked to 20 deaths in Minnesota hospitals
ST. PAUL (AP) — Twenty patients died in Minnesota hospitals during a 15-month period because of medical errors or oversights including falls, faulty medical equipment and administering the wrong medication, the state Health Department said in a new report.
The report, released Wednesday, documented 99 serious errors between July 1, 2003 and Oct. 6, 2004. Minnesota is the first state to report its mistakes under standards developed by the National Quality Forum, a Washington-based nonprofit. New Jersey and Connecticut also adopted the standards, which are being considered elsewhere.

Minnesota's most common problem — not resulting in death or disability — was doctors forgetting foreign objects such as surgical sponges inside patients at the end of operations. That happened 31 times.

St. Luke's Hospital in Duluth reported the most deaths due to medical errors, with four. The causes were a fall, a medication error, a malfunctioning medical device and a burn.

Three patients died after medical errors in Mayo Clinic facilities in Rochester and Mankato, including two who received incorrect medications and one apparently healthy patient who died after an operation.

In a 1999 report, the Institute of Medicine estimated that 44,000 to 98,000 Americans die annually because of medical mistakes. Since then, 22 states have adopted laws requiring hospitals to report serious mistakes, according to the National Academy for State Health Policy.

The National Quality Forum, which sets voluntary hospital standards, developed a list of 27 mistakes such as amputating the wrong limb or sending a baby home with the wrong family. They've been dubbed "never" mistakes because they're so serious they're never supposed to happen.

It is those 27 mistakes that Minnesota hospitals reported Wednesday.

Health Commissioner Dianne Mandernach said collecting and publishing data on medical errors will improve safety for hospital patients in the long run.

"The true value of our new reporting system lies not in the numbers but in the underlying evaluation of the causes of the errors and the actions that are taken to prevent them from ever occurring in the future," Mandernach said at a news conference.

Doctor Sues and Gets $400 Million

Jury tells Medtronic to pay $400 million By WOODY BAIRD Associated Press MEMPHIS, Tenn. - A federal jury awarded $400 million in punitive damages Wednesday to a doctor who accused a medical technology company of infringing on his patents for a surgical device to treat spinal injuries. The punitive damages against Medtronic Inc. are in addition to $110 million the Fridley, Minn., company was ordered last month to pay surgeon Gary Michelson. Medtronic called the award "unjustified and excessive" and said it will appeal. The jury said a Medtronic subsidiary, Medtronic Sofamor Danek Inc. of Memphis, breached agreements with Michelson to produce and sell implants he invented to treat patients suffering from damaged or diseased spinal discs. The devices are small metal cages that are inserted between vertebrae. The total damages could be increased by $60 million since the verdict includes a percentage of the income Medtronic continues to receive from selling the devices. Michelson had sought a total of $1.7 billion in damages.

Corrupt Insurance Companies

INVESTIGATION REVEALS WIDESPREAD CORRUPTION IN INSURANCE INDUSTRY Leading Brokerage Firm Sued for Fraud and Antitrust Violations; Insurance Company Executives Plead Guilty; Major Insurance Firms Implicated Attorney General Eliot Spitzer today sued the nation's leading insurance brokerage firm, alleging that it steered unsuspecting clients to insurers with whom it had lucrative payoff agreements, and that the firm solicited rigged bids for insurance contracts. Simultaneously, Spitzer announced that two insurance company executives have pleaded guilty to criminal charges in connection with the scheme. The actions against the brokerage firm, Marsh & McLennan Companies, and the two executives stem from a widening investigation of fraud and anti-competitive practices in the insurance industry. Evidence revealed in today's lawsuit also implicates other major insurance carriers. "The insurance industry needs to take a long, hard look at itself," Spitzer said. "If the practices identified in our suit are as widespread as they appear to be, then the industry's fundamental business model needs major corrective action and reform." "There is simply no responsible argument for a system that rigs bids, stifles competition and cheats customers," he added. Spitzer was joined at news conference announcing the actions by New York State Insurance Superintendent Gregory V. Serio, who said: "This has gone from an inquiry into failure to disclose compensation to an active investigation of bid rigging and improper steering. This certainly proves the adage that where there is smoke, there is fire." The civil complaint filed today in State Supreme Court in Manhattan alleges that for years Marsh received special payments from insurance companies that were above and beyond normal sales commissions. These payments -- known as "contingent commissions" -- were characterized as compensation for "market services" but were, in fact, rewards for the business that Marsh and its independent brokers steered and allocated to the insurance companies. Industry representatives defend this long-standing practice as acceptable and even beneficial to clients, but the Attorney General's office has uncovered extensive evidence showing that it distorts and corrupts the insurance marketplace and cheats insurance customers. In addition to steering business to its insurance company partners, Marsh, at times, solicited fake bids, which deceived its customers into thinking that true competition had taken place. Marsh did this even as it claimed in public statements that its "guiding principle" was to always consider its client's best interests. Spitzer's complaint against the company cites internal communications in which executives openly discuss actions that were aimed at maximizing Marsh's revenue and insurance companies' revenues -- without regard to clients' interests. For example, one senior Marsh executive sent a message to colleagues saying: "We need to place our business in 2004 with those [insurance companies] that have superior financials, broad coverage and pay us the most." Another executive noted that the size of contingent commissions will determine "who [we] are steering business to and who we are steering business from." Major insurance companies -- ACE, AIG, The Hartford and Munich American Risk Partners -- are named in the complaint as participants in steering and bid rigging. Other insurance companies are still under investigation. The two executives pleaded guilty to participating in the illegal conduct and are expected to testify in future cases. According to the complaint, Marsh collected approximately $800 million in contingent commissions in 2003. Spitzer's civil complaint seeks an end to the steering and bid rigging, disgorgement of improper payments, restitution and punitive damages. The immediate victims of the illegal practices were Marsh's customers -- mainly large corporations seeking property and casualty coverage, but also small and mid-size businesses, municipal governments, school districts and some individuals. Spitzer thanked the State Insurance Department for its cooperation in the joint investigation, which is continuing. The investigation underlying today's civil action case was led by Assistant Attorneys General Matthew Gaul, Mel Goldberg, Michael Berlin, Maria Filipakis and Peter Bernstein, under the direction of David D. Brown IV, Chief of the Investment Protection Bureau, Jay Himes, Chief of the Antitrust Bureau and Terryl Brown Clemons, Acting Deputy Attorney General in Charge of the Public Advocacy Division. Audrey Samers, Deputy Superintendent and General Counsel of the New York State Insurance Department, has coordinated that agency's activities with the Attorney General's office. The criminal cases are being prosecuted by Assistant Attorneys General Whitman Knapp, Michael Roe and Nina Sass under the direction of Deputy Chief of the Criminal Prosecutions Bureau Kevin Suttlehan and Chief of the Criminal Prosecutions Bureau Janet Cohn, and the Deputy Attorney General in Charge of the Criminal Division, Peter B. Pope.

Do You Know Why Insurance Rates are So High? Here's Why.

October 15, 2004
Broker Accused of Rigging Bids for Insurance
By JOSEPH B. TREASTER

liot Spitzer, the New York state attorney general, yesterday accused the world's largest insurance broker of cheating customers by rigging prices and steering business to insurers in exchange for millions of dollars in kickbacks.

The lawsuit brought by Mr. Spitzer against the broker, Marsh Inc., a unit of the Marsh & McLennan Companies, contends that Marsh conducted sham bidding to mislead customers into thinking that they were getting the best price for the coverage they needed. The lawsuit cites several examples of customers - including Fortune Brands, which sells Titleist golf balls and Jim Beam spirits, and the school district of Greenville, S.C. - that were misled that way.

In addition to the lawsuit, two executives of the American International Group, one of the world's largest insurance companies, pleaded guilty to criminal charges of rigging bids with Marsh.

While Mr. Spitzer's target yesterday was Marsh, he made clear that he was taking aim at a widespread practice in the insurance industry. "This investigation is broad and deep and it is disappointing,' he said.

Mr. Spitzer suggested that he had also come across indications of wrongdoing in the sale of many kinds of personal insurance, including coverage on cars, homes and health insurance. "Virtually every line of insurance is implicated,' he said.

The lawsuit names American International, or A.I.G., and three other insurers, as participants in the bid rigging and steering: the Hartford, a unit of Hartford Financial Services; Ace Ltd., which is based in Bermuda but is a major player in the American insurance market; and Munich American Risk Partners, a unit of Munich Re with offices in Princeton, N.J.

"There will be numerous criminal and civil cases,' Mr. Spitzer promised.

Insurance is now the new financial battleground for Mr. Spitzer after recent crackdowns against conflicts of interest involving Wall Street analysts and abuses in trading mutual funds. The latest investigation has opened a rare window into a huge business of corporate middlemen. The role of insurance brokers is to get the proper insurance coverage at the best possible price for clients ranging from the giants of corporate America to regional businesses and mom-and-pop operations across the country. They receive commissions from the clients for arranging the coverage.

But decades ago, the brokers also began collecting fees from the other side of the deal, the insurers. Those fees were for steering a certain volume of business to an insurer or for arranging a particularly profitable form of coverage. Marsh reaped $800 million from these fees in 2003, the lawsuit says.

The investigation also threatens to embroil the insurance industry's remarkable family dynasty. Jeffrey Greenberg, 53, is chief executive of Marsh, while his brother Evan, 49, is chief executive of Ace.

Over several decades, the patriarch of the family, Maurice R. Greenberg, has converted A.I.G. from a small internationally oriented insurance company to one of the wealthiest and most powerful in the world. He had dreamed that he would eventually be succeeded by one of his sons.

But both Jeffrey and Evan left A.I.G. to strike out on their own after Mr. Greenberg, who is now 79 years old, showed no sign of intending to retire.

In a news conference yesterday, Mr. Spitzer was sharply critical of Jeffrey Greenberg, saying that he and other top executives of Marsh had initially misled his investigators. Mr. Spitzer said he did not try to negotiate a settlement with Marsh before filing the lawsuit.

"The leadership of that company is not a leadership I will talk with,' an obviously angry Mr. Spitzer said. "It is not a leadership I will negotiate with.'

Through a spokeswoman, Jeffrey Greenberg declined a request for an interview. In a statement, the parent company, Marsh & McLennan Companies, said: "We take very seriously the allegations made by Attorney General Spitzer.'

Shares of Marsh and A.I.G. and other insurers tumbled yesterday, dragging down the stock market. Marsh's stock price plunged 24 percent, or $11.28, to $34.85. Shares of A.I.G. fell 10 percent, or $6.99, to $60. The sell-off in A.I.G. accounted for nearly half the decline yesterday in the Dow Jones industrial average and was the steepest drop in the stock since the 1987 market crash. Hartford shares fell 6 percent, to $58.40, and Ace shares fell 9.5 percent, to $36.47.

Marsh's other, smaller businesses have also come under regulatory scrutiny in the last two years. In April, its Putnam Investments mutual fund unit paid $110 million to settle allegations that lax oversight allowed some fund mangers to benefit from insider information. And the Securities and Exchange Commission has been looking into possible conflicts among pension consultants, including the Mercer Inc. unit of Marsh.

Late yesterday, Marsh's board said in a statement that an independent review of the company's brokerage business was under way. The internal investigation is being carried out by Michael G. Cherkasky, the chief executive of Marsh Kroll, an investigative subsidiary, a company executive said.

Mr. Cherkasky, a former prosecutor in the Manhattan district attorney's office, will report to Mr. Greenberg and the 10 independent directors on Marsh & McLennan's 16-member board.

The investigation into insurance brokers began in April after Mr. Spitzer received a phone call and a letter from two different people - neither of whom he identified yesterday - suggesting that the brokers were caught up in a conflict of interest. The Washington Legal Foundation, a nonprofit research organization, was also active in bringing the situation to the attention of investigators earlier this year.

Mr. Spitzer then sought information from Marsh, Aon, which is the second largest broker, and Willis Group Holdings, the third largest, and many smaller brokers. Yesterday, Mr. Spitzer said he had also demanded information from many insurance companies at the same time.

After the first reports of an investigation, Marsh and the other big brokers said they had made a practice of informing clients that they received fees from the insurance companies. Those payments, as Aon put it then in a press release, were "a longstanding and common practice within the insurance industry.' Many industry executives said they felt that as long as the payments from the insurance companies were disclosed to clients there could be no conflict of interest.

But yesterday, Mr. Spitzer contended that the brokers failed to disclose how the dealings between themselves and the insurance companies really worked. Often, he said, a result was higher profits for the brokers and the insurance companies and higher insurance costs for the customers.

In support of his lawsuit, Mr. Spitzer filed with the court a half-inch-thick bound volume of e-mail, insurance forms, internal memos and the transcript of a recent conference call led by Mr. Greenberg.

The suit says that at times the brokers and insurers carried out elaborate farces to fool clients into believing that several bids were being competitively submitted for their business when in fact Marsh determined in advance which company would get the sale, with other companies agreeing to provide false bids.

In one example, the lawsuit cites efforts to get insurance coverage for a project to replace more than 50 school buildings in Greenville, S.C. Two insurance companies expressed interest in the business. But, according to the lawsuit, Marsh executives steered the deal toward Zurich North America in hopes of developing a special fee arrangement. When the other company, Ace, dropped out of the bidding, the lawsuit said, a Marsh executive encouraged a third company, CNA, in Chicago, to submit what would be a losing bid to make the transaction appear to involve competition. CNA refused, but, the lawsuit said, Marsh submitted a CNA bid anyway. Zurich, the only real bidder, won the business.

The lawsuit does not make clear whether the schools project suffered financially, but it said that the project manager was never told that one of the bids was false. In the end, the lawsuit said, Marsh failed to get special fees in the deal from Zurich. A call to the school district was not returned.

Mr. Spitzer said that Marsh reaped some $800 million in fees from insurers, sometimes referred to as contingency fees or placement service agreements, in 2003.

Mr. Spitzer said the two A.I.G. executives who pleaded guilty, Karen Radke and Jean-Baptist Tateossian, were cooperating with investigators.

A.I.G. said in a statement that it was "saddened by the news' that two of its executives had pleaded guilty "because we hold ourselves to the highest ethical standards."

Lawyers for the two executives did not return phone calls seeking comment.

A.I.G. said in its statement that it had requested guidance from the New York State Department of Insurance on its dealings with brokers, suggesting that the department had raised no objection. The company said it took Mr. Spitzer's charges seriously.

A.I.G., as well as Hartford and Ace, all said they were cooperating with the investigation. There was no response to a phone message seeking comment from a spokeswoman for Munich American Risk Partners.

Insurance Company Commits Fraud

SPITZER AND SERIO ANNOUNCE SETTLEMENT WITH NATION'S LARGEST DISABILITY INSURER Multi-state settlement with UnumProvident imposes sweeping reforms that will protect disabled workers nationwide. New York State Attorney General Eliot Spitzer and New York State Insurance Superintendent Gregory V. Serio today announced that their offices, together with other state insurance regulators, reached a landmark settlement with UnumProvident Corporation ("UnumProvident") and five of its subsidiaries – Unum Life Insurance Company of America, The Paul Revere Life Insurance Company, Provident Life and Casualty Insurance Company, Provident Life and Accident Insurance Company and First Unum Life Insurance Company. The settlement resolves issues relating to investigations into UnumProvident's claims handling practices conducted by the New York State Attorney General's Office, the New York State Insurance Department, state insurance regulators conducting a multi-state examination led by Massachusetts, Maine and Tennessee on behalf of all the other states, and the United States Department of Labor. The investigations focused on assertions that UnumProvident had inappropriately denied claims for benefits under individual and group long-term disability insurance policies. These investigations and the resulting settlement are unrelated to the separate investigations into the payment of contingent commissions, steering and bid-rigging in the insurance industry. The settlement announced today requires UnumProvident and its subsidiaries: (1) to reassess approximately 200,000 claims that previously had been denied; (2) to completely restructure their claim handling procedures to ensure objectivity and fairness; and (3) to pay a $15 million fine. An outline of the specific terms of the settlement is attached. "This settlement sends a strong message to disability insurance companies that improper denials of disability claims will not be tolerated," said Attorney General Spitzer. "These claim denials involved vulnerable workers – those whose illnesses and injuries prevented them from continuing their employment. I am very pleased that these individuals will have their claims reviewed, and that UnumProvident will now implement the structural reforms necessary to ensure that future claims are handled appropriately." "This settlement agreement gives thousands of current and former policyholders an opportunity to have their denied claims reassessed as part of a process over which regulatory authorities will have strict oversight," Superintendent Serio said. "Today's agreement also requires the parent company and its subsidiaries to implement the management and corporate reforms necessary to ensure that future disability claims are handled properly." The reassessment process covers the vast majority of persons whose claims for group or individual long-term disability benefits were terminated or denied after January 1, 2000. UnumProvident and its subsidiaries are required to provide notice to those individuals of their rights under the agreement. In addition, individuals whose disability claims were denied between 1997 and 2000 can also apply to participate in the claim reassessment process. Spitzer and Serio urged these individuals to contact UnumProvident at 1-866-278-4641 and ask that their claims be reassessed. UnumProvident officials estimate that the settlement will result in expenditures of over $100 million in restitution to policyholders and in structural reforms to improve compliance and monitoring. Some of the structural reforms must remain in place for at least two years, while others are permanent. The review process and restitution payments will provide claimants with a more expedient method of obtaining recoveries, and simultaneously will reduce the companies' exposure to litigation judgments and other costs. If UnumProvident fails to implement the required changes in a timely manner as stipulated by the agreement, it will be subject to penalties of $100,000 per day until compliance is achieved. In addition, failure to meet acceptable levels of accuracy in making disability claim determinations will result in a penalty of $145 million. The Attorney General's investigation was handled by Deputy Attorney General Dan Feldman, Assistant Attorney General Joy Feigenbaum and Assistant Attorney General Mel Goldberg, under the direction of Consumer Bureau Chief Thomas Conway. The New York State Insurance Department's investigation was handled by Deputy Superintendent and General Counsel Audrey Samers, Deputy General Counsel Susan Donnellan, Assistant Deputy Superintendent and Chief Examiner Life Bureau Jeffrey Angelo and Deputy Chief Life Bureau Gail Keren. Outline of UnumProvident Settlement Agreement Under the terms of the settlement, UnumProvident and its subsidiaries have agreed to: reassess the claims of approximately 200,000 individuals whose claims for group or individual long-term disability benefits were denied; restructure their claim handling procedures to ensure that all future claims are reviewed in a fair and objective manner, including an agreement to: select medical examiners based solely on merit, and ensure that those examiners review all relevant records before reaching a determination; require personnel making impairment determinations to certify that their determinations were based upon a review of all the relevant evidence; prohibit company personnel from trying to influence the outcome of disability claim appeals; and grant significant weight to findings of disability by the United States Social Security Administration; improve employee training; create a new Regulatory Compliance Unit to monitor the companies' compliance with applicable laws and regulations; conduct periodic audits of the new claim reassessment process, to ensure compliance with the terms of the settlement; create a toll-free confidential hotline through which company employees can report concerns about claims handling processes; appoint three new independent members to the Board of Directors of UnumProvident, add one new independent member to the Audit Committee, and create a new Regulatory Compliance Committee of the board; permit enhanced monitoring and examinations by state insurance regulators, paid for by the companies; and pay a $15 million fine to be divided among participating states.

Businesses File 4 Times as Many Lawsuits

Corporate Hypocrisy in Accessing the Courts

Business lobbyists and their political allies have created a perception that America’s legal system has run amok. They point the finger at consumer and patient lawsuits, which they imply are concocted by “greedy trial lawyers.” They argue that lawsuits have detrimental effects on society and the economy, and effectively suggest that people should turn the other cheek when their rights are violated. President Bush and Vice President Cheney mimic these erroneous claims and make attacks on the legal system a central part of their campaign stump speeches. “See, everybody is getting sued,” says the President, and the lawsuits are “junk and frivolous.”

But Public Citizen’s examination of public records finds that for the most part it is businesses rather than consumers and their lawyers doing the suing, and that businesses are far more often guilty of filing frivolous pleadings than the trial lawyers they demonize.

Hypocrites

The Hypocrites Of Tort Reform

Advocates Who Changed Their Tunes

We all have heard that lawyers are the reason that we have high insurance costs, doctors are going out of business, and even some claims that the economy is bad because of lawyers.

Some of the following people made these claims EXCEPT WHEN THEY NEEDED A LAWYER. Hypocrites? You decide. . .

Emily Gottlieb is the deputy director of the Center for Justice & Democracy.

No one likes a hypocrite. Yet one would be hard pressed to find more hypocrites than in the "tort reform" movement. Take a look at the record of a host of lawmakers, lobbyists and even journalists who complain about lawsuits and argue that the rights of injured consumers to go to court should be scaled back because we are too "litigious."

When they or family members are hurt and need compensation for their own injuries, often minor ones, these same individuals do not hesitate to use the courts to obtain compensation, to right a wrong, to hold a wrongdoer accountable or to obtain justice. The same is true for corporations that have funded the "tort reform" movement. These companies support efforts to immunize themselves from liability for harming consumers. But when these same companies believe they have been wronged by a business competitor, they are the first to sue.

In this report we take a look at the cases of several proponents of tort restrictions who do not "practice what they preach." We examine individuals who have sued sometimes for millions of dollars while at the same time championing damage caps and other severe liability restrictions for others. We also look at corporate litigants who have lent financial or other support to groups like the American Tort Reform Association, the Manhattan Institute and state business coalitions like New Yorkers for Civil Justice Reform.

Notably, tort restrictions advocated by these organizations virtually never limit the rights of corporations to sue business competitors for commercial losses. This list is by no means exhaustive but merely representative of businesses and other "tort reformers" who say one thing but do another when it comes to the civil justice system.

Individual Hypocrites

George W. Bush

As Texas Governor, George W. Bush was one of the "tort reform" movement?s biggest proponents. One of Bush?s first acts as governor in 1995 was to meet with representatives of nine Texas Citizens Against Lawsuit Abuse (CALA) chapters in a salsa factory outside of Austin, after which he declared a legislative "emergency" on "frivolous lawsuits." Over his two terms, Bush signed a series of brutal bills that severely reduced injured consumers' rights to go to court.

However, when it comes to solving problems involving his own family, Bush heads straight to court. In 1999, Bush sued Enterprise Rent-A-Car over a minor fender-bender involving one of his daughters in which no one was hurt. Although his insurance would have covered the repair costs, making a lawsuit unnecessary, Bush sought additional money from Enterprise, which had rented a car to someone with a suspended license. In this case, Bush seemed to understand one of the most important functions of civil lawsuits -- to deter further wrongdoing. The case settled for $2,000 to $2,500.

U.S. Senator Rick Santorum, R-Pa.

As a United States Senator, Rick Santorum has repeatedly supported limits on consumers' rights to seek compensation in the courts. In 1994, Santorum sponsored the Comprehensive Family Health Access and Savings Act that would have capped non-economic damages at $250,000. In a 1995 floor speech supporting damages caps, Santorum said, "We have a much too costly legal system. It is one that makes us uncompetitive and inefficient, and one that is not fair to society as a whole. While we may have people, individuals, who hit the jackpot and win the lottery in some cases, that is not exactly what our legal system should be designed to do."

But the same rhetoric does not seem to apply to Senator Santorum. In December 1999 Santorum supported his wife?s medical malpractice lawsuit against her chiropractor for $500,000. At trial, the Senator testified that his wife should be compensated for the pain and suffering caused by a botched spine adjustment, claiming that she had to "treat her back gingerly" and could no longer accompany him on the campaign trail. After the verdict, Santorum refused to answer phone calls asking what impact the case had on his views of "tort reform." According to his spokesman Robert Traynham, "Senator Santorum is of the belief that the verdict decided upon by the jury during last week?s court case of his wife is strictly a private matter. The legislative positions that Senator Santorum has taken on tort reform and health care have been consistent with the case involving Mrs. Santorum." In January 2000, a judge set aside the $350,000 verdict, deeming it excessive, and offered a reduced award of $175,000 or a new trial on damages only.

"Lawsuit Abuse" Group Founder and Trustee, Sterling Cornelius

Sterling Cornelius, owner of Cornelius Nurseries and Turkey Creek Farms in Houston and a trustee of the corporate front-group, Citizens Against Lawsuit Abuse (CALA), is one of the most vocal businessmen complaining about lawsuits and advocating tort restrictions in Texas. With the help and support of the Texas CALA group, Texas enacted a series of "tort reforms" in 1995, including caps on punitive damages and severe restrictions on lawsuits filed under Texas' Deceptive Trade Practices Act.

But in 1993, Sterling filed a $100 million lawsuit against DuPont, claiming that its fungicide, Benlate, damaged his companies' crop and nursery. Among the damages Cornelius sought were $75.3 million in punitive damages under the Deceptive Trade Practices Act as well as additional punitive damages. Because his lawsuit was filed before enactment of the 1995 legislation, his lawsuit was not affected by the "tort reforms" that passed.

Florida State Representative Mark Flanagan

As a member of the House Civil Justice and Claims Committee, Mark Flanagan was a major force behind severe tort restrictions that were enacted in Florida in 1999, sponsoring and co-sponsoring bills that protect manufacturers of defective products, while calling Florida "the most litigious society in the world."

But it was a different story when his own daughter fell from a daycare center's jungle gym and broke her leg in 1995. Flanagan sued both the day care center and the manufacturer of the jungle gym, alleging that the manufacturer "negligently and carelessly designed" the apparatus and that the preschool failed to properly supervise his daughter. Like many injured victims whose rights Flanagan's legislation decimates, the lawsuit alleged that his daughter suffered from "severe pain" and "lost the capacity to enjoy life." After 18 months of litigation -- and two months before his bid for re-election -- Flanagan settled for an undisclosed amount.

Texans for Lawsuit Reform Board Members

In April 1995, Texans for Lawsuit Reform (TLR) helped lobby for legislation that capped punitive damages, limited governmental and professional liability, undermined joint and several liability and decimated Texas' Deceptive Claims Practices Act.

Yet at the time this legislation passed, TLR Board members Leo Linbeck, Richard Trabulsi and Richard Weekley had themselves filed over 60 lawsuits either personally or as business owners. Between 1978 and 1995, Leo Linbeck's construction company was the plaintiff in at least 37 lawsuits. In one suit, which was settled confidentially, his company sued its own insurance company for triple damages stemming from the deaths of three workers in a construction accident. In another case, settled in November 1988, Linbeck sued for punitive damages.

By 1995, Board member Richard Trabulsi had also filed suit numerous times. In 1986, as the owner of Richard's Liquor and Fine Wines, Trabulsi sued Walgreen's to force it to stop selling alcohol in Texas. He also filed a personal-injury suit against his company in which the company prevailed. He told the Houston Post, "I have had access to the courts a number of times I had forgotten." As of 1995, TLR President and co-founder Richard Weekley, head of Weekley Properties and Weekley Development and a partner of David Weekley Homes, had sued six times; his companies had sued 14 times.

West Virginia Supreme Court Justice Richard Neely

In January 1994, West Virginia Supreme Court Justice Richard Neely testified before the New Jersey Senate Commerce Committee as it considered bills designed to abolish the state's tort system. Appearing as a paid spokesman for the corporate front-group, New Jersey Citizens Against Lawsuit Abuse, Neely attacked every player in the civil justice system, from lawyers to judges to injured victims who sue.

Those pronouncements were surprising given Neely's personal history with the civil justice system. In 1986, he reportedly sued TWA because his bags arrived 70 minutes late. He demanded $38,000, $3,000 of which was a "speaker's fee" for telling other passengers about the delay. Three years later, the case settled for $12,500. In 1993, Neely sued Goodyear Tire after a wheel fell off his father's Cadillac. He sought $49,000 that included $2,000 for himself for five-hours worth of telephone calls to his parents. As Neely testified before the New Jersey Senate, the case was dismissed.

Citizens for a Strong Ohio Advisory Board Member R. Emmett Boyle

In 1996, the Ohio Chamber of Commerce lobbied for a package of laws that made it more difficult or impossible for injured Ohio citizens to sue wrongdoers and be fairly compensated for their injuries. On August 16, 1999, the Ohio Supreme Court struck down this package of laws in its entirety, calling it "openly subversive of the separation of powers and, in particular, of the judicial system" established by the Ohio Constitution. During the 2000 elections, Citizens for a Strong Ohio, a group created by the Ohio Chamber of Commerce, spent an estimated $5 million to oust Supreme Court Justice Alice Robie Resnick, who wrote the decision striking down the laws.

Yet when it comes to his own company, Citizens for a Strong Ohio Advisory Board Member R. Emmett Boyle does not hesitate to sue. In 1995, Boyle's company, Ormet Primary Aluminum Corporation, sued Certain Underwriters at Lloyd's of London, Employers Insurance of Wausau, Globe Indemnity Company and Home Indemnity Company, seeking coverage for environmental contamination at its Hannibal, Ohio reduction facility and remediation costs. After five years of litigation, the Ohio Supreme Court upheld the lower court's decision to throw the case out, finding that the company had known it was liable for the contamination yet waited 16 years before notifying its insurers.

Corporate Hypocrites

The following corporations have funded or are members of either national or state organizations that advocate "tort reform." Tort reforms are always aimed at curbing litigation by sick and injured consumers against corporations, hospitals and other wrongdoers. Such "reforms" rarely affect "business-to-business" litigation, leaving corporations with unfettered use of the courts to obtain compensation for their commercial losses from trademark infringements, breach of contract, patent infringements, unfair completion or a host of other commercial claims. Sometimes the targets of their lawsuits are much smaller businesses or even consumers. The following are a few examples:

Enterprise Rent-A-Car

In 1998, Enterprise Rent-A-Car began litigation against Rent-A-Wreck -- a company 25 times smaller than Enterprise -- over Enterprise's trademarked phrase, "We'll Pick You Up." Rent-A-Wreck had used radio ads that contained the phrase "And of course, they'll pick you up." Later, after a purported settlement between the companies, Enterprise tried to stop Rent-A-Wreck from obtaining a trademark for the phrase, "We'll Give You A Lift." In 2000, Enterprise sued Rent-A-Wreck for civil contempt for using "We'll Give You a Lift." The contempt motion was dismissed.

Exxon Corporation

Major corporations like Exxon support laws to limit the ability of average consumers to sue their insurance companies when those companies unfairly deny claims. But when Lloyds of London refused to pay Exxon $250 million for losses it suffered as a cargo owner resulting from the Valdez oil spill in Alaska, Exxon did what all consumers should have the right to do. Exxon sued its insurance company. In this case, Exxon won.

Exxon has used the courts for other purposes well. For example, in August 1998, Exxon sued Mobil Oil Corp. for patent infringement involving a catalyst that makes better plastics. A jury awarded Exxon $171 million and a judge issued an order prohibiting Mobil from infringing on Exxon's patent.

Johnson & Johnson

Johnson & Johnson, makers of Mylanta in partnership with Merck, sued Smithkline Beecham Corporation for false advertising regarding the nutritional benefit of Tums over Mylanta. The court dismissed Johnson & Johnson's complaint. The lower court's decision was upheld on appeal.

In 1995, Johnson & Johnson/Merck filed another false advertising suit against SmithKline over claims that Tums and Tagamet HB were superior to Pepcid AC. The court issued a preliminary injunction, ordering SmithKline to suspend the ads. In 1999, Johnson & Johnson sued Bausch & Lomb for making claims about the superiority of its extended wear contact lenses.

Schutt Sports, Inc.

On March 4, 1997, Julie Nimens, president and chief executive officer of Schutt Sports, testified before the Senate Commerce Committee about the need for a federal product liability law that would have placed severe restrictions on the rights of consumers to sue manufacturers of defective products. She alleged that litigation and the threat of "frivolous lawsuits" stifled innovation, hurting businesses and consumers.

Nimens failed to mention -- until Senator Ernest Hollings, D-S.C., brought it up -- that in 1978, Schutt Sports sued Riddell, Inc., claiming that the protective face masks on Riddell helmets too closely resembled Schutt's and that Riddell copied its sizing specifications. The case was thrown out, with the court noting "seldom have we seen a lawsuit as unwarranted and frivolous as this one." Moreover, in 1989, Schutt sued Riddell over an agreement with the National Football League in which Riddell provided free helmets to players in exchange for their displaying Riddell's logo during games. The trial court found that Schutt failed to produce sufficient evidence to support any of its state and federal claims.

Conclusion

In 1975, Indiana lobbyist Frank Cornelius, whose clients included the Insurance Institute of Indiana, helped secure passage of a $500,000 cap on medical malpractice awards and elimination of all damages for pain and suffering in Indiana. As he wrote in the New York Times on October 7, 1994, he now "rue[s] that accomplishment." Beginning in 1989, Frank Cornelius experienced a series of medical catastrophes that resulted in his wheelchair confinement, respirator-assisted breathing and constant physical pain.

When he turned to the Indiana courts to provide a remedy, to compensate him for his massive injuries and hold the negligent health care providers accountable, the law was no longer there for him. The Indiana legislature had taken his rights away. Though his medical expenses and lost wages amounted to over $5 million, his claims against both the hospital and physical therapist at fault settled for a mere $500,000 -- the limit on damages for a single incident of malpractice.

In some ways, the hypocrites of "tort reform" are an amusing list. But tragedy for them lurks just around the corner, just like it did for Frank Cornelius.

Editor's Note: This piece was excerpted from the report "Not in My Backyard -- The Hypocrites of "Tort Reform" by the Center for Justice & Democracy.

Stop Frivolous Insurance Company Reform

Insurance Companies Get Record Profits But They NEVER Give Us a Reduction in Our Insurance Premiums. Ask Why?

WEISS RATINGS www.weissratings.com

Property and Casualty Insurers Earn $32.3 Billion in 2003

Industry Reports $48 Billion Investment Gain

JUPITER, Fla., July 14, 2004 - Property and casualty insurers more than doubled their profits during 2003, earning $32.3 billion compared to the $13.5 billion reported in 2002, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

... Continued improvement in underwriting was responsible for property and casualty insurers' extraordinary performance as the industry dramatically reduced its underwriting loss to $2.9 billion in 2003, compared to the $28.2 billion loss reported a year ago.

"Escalating premiums have caused profits to soar, but improved underwriting performance is paramount to the industry's long-term financial strength," said Melissa Gannon, vice president of Weiss Ratings, Inc.

Industry Records $48 Billion Investment Gain; Capital and Surplus Surges

A strong performance by the stock market helped boost property and casualty insurers' investment portfolios, which reported a net investment gain of $47.8 billion compared to $46.4 in 2002. One component of the net investment gain, net realized capital gains, jumped 103 percent, as the industry reported earning $6.3 billion on the sale of investments in 2003 compared to only $3.1 billion in 2002.

Likewise, the rise in the equity market produced a $34.5 billion net change in unrealized gains for the industry, which contributed to a $71.6 billion, or 19.2 percent, increase in capital and surplus, from $373.2 billion at December 31, 2002, to $444.8 billion at December 31, 2003.

CEOs of Insurance Companies Get Paid Millions

INSURANCE INDUSTRY CEO SALARIES

The most recent study of insurance industry executive compensation, published in the July 2002 edition of The Insurance Forum, reveals that at least 79 insurance industry executives received compensation of over $5 million in 2001, including 18 who received $10 million or more.* Meanwhile, insurance companies are claiming that your son or daughter’s life is worth what they tell you it is. If your son or daughter were burned in a fire from a drunk driver would you say their life is worth only what an insurance company says? Yet, for the last 20 years, they have been lobbying for measures to deprive sick and injured Americans of their right to be fairly compensated for injuries caused by wrongdoing.

The top 15 individuals for 2001:

Rank Executive Title/Company Compensation
1. Eli Broad, SunAmerica (of American International Group) $48,174,739
2. Sanford I. Weill Citigroup $26,694,959
3. Jacques E. Dubois, Jr. Swiss Re $19,739,137
4. Lawrence J. Lasser President, Putnam Investments (of Marsh & McLennan) $19,253,003
5. Richard W. Scott Vice President and Chief Investment officer, Yosemite Insurance Company (of American general Corporation) $18,799,291
6. Jay S. Wintrob SunAmerica (of American International Group) $18,181,204
7. Robert E. Rubin Citigroup $16,412,614
8. Larry C. Glasscock CEO, Anthem, Inc. $15,703,827
9. Daniel P. Amos AFLAC $15,141,465
10. Phillip B. Lassiter Chairman and CEO, AMBAC Assurance $14,274,665
11. Thomas J. McInerney President and CEO, Aetna Insurance Company of America (of Netherlands Insurance) $14,100,577
12. Michael A. Carpenter Citigroup $13,297,917
13. James N. Stanard Chairman and CEO, RenaissanceRe $11,697,416
14. Yoshiki Otake AFLAC $11,639,209
15. Raymond Barrette Chairman and CEO, OneBeacon Insurance Company $11,447,343
Average: $18,303,824

"Broad and Wintrob are associated with SunAmerica, a unit of American International Group. For the two combined ... 1 percent was salary, 11 percent was bonus, and 88 percent was 'all other compensation.'" The Insurance Forum, Vol, 29, No. 7 (July 2002), p. 75.
"Amos and Otake are associated with AFLAC. For the two combined … 7 percent was salary, 6 percent was bonus, and 87 percent was 'all other compensation.'"

The Insurance Forum, Vol. 29, No. 7 (July 2002), p. 76.
Scott’s salary was $474,000, bonus was $500,000, and "other compensation" was $17.8 million. The Insurance Forum, Vol. 29, No. 7 (July 2002), p. 75.

This information is from the Center for Justice and Democracy.

Insurance Companies Gouge Consumers and Doctors

Medical Malpractice Caps Fail to Prevent Premium Increases,
According to Weiss Ratings Study
Physicians in States with Caps Suffer 48% Increase in Median Annual Premiums
Even While Insurers Enjoy Slowdown in Payouts

PALM BEACH GARDENS, Fla., June 2, 2003 - Caps on non-economic damages have failed to prevent sharp increases in medical malpractice insurance premiums, even though insurers enjoyed a slowdown in their payouts, according to a white paper released today by Weiss Ratings, Inc., the nation’s leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

In reviewing the impact that tort reform has had on both medical malpractice (med mal) premiums paid by doctors in three high-risk specialties1 and insurers’ claim payout levels2 between 1991 and 2002, Weiss noted the following trends:

Physicians continued to suffer a rapid increase in med mal premiums despite caps: In 19 states that implemented caps during the 12-year period, physicians suffered a 48.2 percent jump in median premiums, from $20,414 in 1991 to $30,246 in 2002. However, surprisingly, in 32 states without caps3, the pace of increase was actually somewhat slower, as premiums rose by only 35.9 percent, from $22,118 to $30,056.

At the same time, among the 19 states with caps, only two of the states, or 10.5 percent, experienced flat or declining med mal premiums. In contrast, states without caps were actually better able to contain premium rate increases, with six, or 18.7 percent, experiencing stable or declining trends.

Meanwhile, the insurers enjoyed slowed increases in claims payout levels: The median payout in states without caps surged 127.9 percent, from $65,831 in 1991 to $150,000 in 2002. In contrast, the median payout grew by 83.3 percent in states with caps, from $60,000 to $110,000. Likewise, in states without caps, the median payout for the entire 12-year period was $116,297, ranging from $75,000 to $220,000, while the median payout for states with caps was 15.7 percent lower, or $98,079, ranging from $50,000 to $190,0004.

"Tort reform has failed to address the problem of surging medical malpractice premiums, despite the fact that insurers have benefited from a slowdown in the growth of claims," said Martin D. Weiss, chairman of Weiss Ratings, Inc. "The escalating medical malpractice crisis will not be resolved until the industry and regulators address the other, apparently more powerful, factors driving premiums higher."

Other Factors Contributing to the Med Mal Crisis

Weiss identified six factors driving the increase in medical malpractice rates, each of which may be exerting a greater impact on premiums than the presence or absence of caps:

The medical inflation rate: Medical costs have risen 75% since 1991.

The insurance business cycle: The property and casualty industry suffered a 12-year "soft" period through 1999, during which marketing goals often superceded prudent underwriting practices and decision-makers typically relied too heavily on high investment income to make up for losing operations. In an attempt to catch up, insurers have tightened underwriting standards and raised premiums.

The need to shore up reserves for policies in force: Med mal insurers have been consistently under-reserving since 1997—to the tune of $4.6 billion through December 31, 2001. The only way to shore up reserves is to increase premiums.

A decline in investment income: Investment income declined by 23 percent in 2001 and then another 2.5 percent in 2002, which is particularly critical for lines of business like med mal since the duration of claims payouts typically spans several years.

Financial safety: Based on the Weiss Safety Ratings, 34.4 percent of the nation’s med mal insurers are vulnerable to financial difficulties, compared to 23.9 percent of the property and casualty insurance industry as a whole. To restore their financial health, many med mal insurers will remain under pressure to increase rates despite new laws to cap payouts.

Supply and demand for coverage: The number of med mal carriers increased through 1997 to 274, but has since fallen to 247 in 2002.

Weiss Recommendations

Although the implementation of non-economic caps has resulted in a slowdown in payout increases for insurers, most insurers have not passed those savings on to physicians, continuing to jack up premiums due to other powerful pressures. Thus, caps have been ineffective in reducing medical malpractice premiums for medical professionals. To adequately address this national crisis, Weiss suggests several comprehensive steps, including:

Legislators should put all proposals for non-economic damage caps on hold until convincing evidence can be produced to demonstrate a true benefit to doctors in the form of reduced med mal costs; insurance companies must never again allow marketing to divert or pervert prudent actuarial analysis and planning; and the medical profession must assume more responsibility for policing itself.

Weiss Ratings issues safety ratings on more than 15,000 financial institutions, including HMOs, life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, banks, and brokers. Weiss also rates the risk-adjusted performance of more than 12,000 mutual funds and more than 7,000 stocks. Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

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1 Medical malpractice premiums paid by doctors in three high-risk specialties: internal medicine, general surgery, and obstetrics/gynecology. Data source: Medical Liability Monitor.
2 Data source: National Practitioner Data Bank
3 For the purposes of this analysis, the District of Columbia is being referred to as a "state" since it effectively operates as such with regard to insurance regulation.
4 Adjusted for inflation in order to evaluate figures spanning multiple years.