Blog, Defective Products

Tort Reform Only Helping Insurance Companies Boost Their Profits

On This Page
On This Page

State tort reforms have led to record profits for insurance companies while physician and patient premiums continue to go through the roof, according to a new report released by the American Association of Justice (AAJ).

AAJ researchers analyzed data from the National Association of Insurance Commissioners (NAIC), as well as insurance company annual statements, and determined that malpractice insurer profits are 24 percent higher in states with caps on medical malpractice awards.  The data also shows that states with caps took in 3.5 times more in premiums that they paid out in 2008 as compared to just over two times in states without caps.  West Virginia is a “capped” state, limiting noneconomic damages (such as pain and suffering) in medical malpractice cases to $250,000 in most instances and $500,000 in instances of death or seriously debilitating injuries.

The report shows that profitability for the medical malpractice insurance industry has increased 47 percent to the last 10 years.  This came on the heels of an aggressive push by the insurance industry to enact tort reform because of “reported” losses.

With malpractice caps in over 30 states, insurance companies are realizing exceptionally high profits.  For instance, the average profit of the 10 largest medical malpractice insurers was higher than 99 percent of Fortune 500 companies and 35 times higher than the Fortune 500 average.

The report’s authors also believe the insurance industry leaders are already preparing to claim another “tort crisis” and lobby for even greater restrictions on patients’ rights by 2012.

To view a copy of the report, please visit www.justice.org.

Injured?
Find out if You're Eligible for Compensation in just Minutes
Written by
Tim Miley
Tim Miley is the founder of The Miley Legal Group. After earning his undergraduate degree in finance at Southern Methodist University in Dallas, TX, Tim attended Duquesne University in Pittsburgh, PA, where he received his Juris Doctorate. Tim is admitted to practice in all courts in West Virginia and is currently a member of the American Association for Justice, the West Virginia American Association for Justice, the West Virginia Bar Association and the Harrison County Bar Association.
Injured?
Find out if You're Eligible for Compensation in just Minutes

The Miley Legal Group follows rigorous sourcing guidelines and only cites trustworthy sources of information in our articles. This includes professional experience, court records, peer-reviewed journals, academic organizations, government reports, highly regarded non-profit organizations, and interviews with qualified and authoritative industry experts.

Subscribe to read more of our articles

Get up to date information about laws in West Virginia and injury lawsuits. 

Get A Free Consultation

Fact-Checked

Editors carefully fact-check all content on Miley Legal for accuracy, quality, and integrity.

The Miley Legal Group editorial department has a rigorous fact-checking process, starting with our strict sourcing guidelines.

Our writers only gather information from credible sources. This includes peer-reviewed medical journals, reputable media outlets, government reports, court records, and interviews with qualified experts.