State lawmakers, insurance groups steel for face-off

Miami Herald
Sunday, March 9, 2003

With the Florida Legislature in session, powerful forces are readying for combat over one of the most contentious political and economic issues in the state: insurance.

Whether the issue is medical malpractice, auto insurance or worker's compensation, insurance is facing a crisis of price and availability in the state.

Neal Roth, co-chairman of the Academy of Florida Trial Lawyers medical liability committee, questions the FIC's proposed solutions.
''We have a much different perspective,'' he says.

In his opinion, the current crisis was precipitated by poor underwriting practices in the 1990s, with malpractice carriers offering dirt-cheap rates in order to get money for the stock market.

Those bad practices, and the subsequent collapse on Wall Street, have come back to haunt them, he says.

Joanne Doroshow, executive director of the Center for Justice and Democracy in New York, agrees.

''When investment income drops, they raise rates fairly astronomically,'' she says.

Similar cycles occurred during soft stock markets in the 1970s and 1980s, she says.

Roth says the industry's contention that noneconomic damages are the problem is unproven. Only a small fraction of cases ever get to court. Most are settled privately with lump sums that don't break down the figures into subcategories.

Finally, capping settlements now won't help the industry for years, he says, because cases can often take four to six years to settle.
For a copy of the complete article, contact CJ&D

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