Medical Mutual Insurance Company of North Carolina recently reported that its profits increased for fiscal year 2005 by almost 225% over the previous year. In filings with the North Carolina Insurance Department, Medical Mutual, which is the state’s largest medical malpractice insurer, saw profits from premiums increase from $2.1 million in 2004 to $6.7 million in 2005 while profits from investments increased from $6.8 million to $13 million over the same period. Two of the company’s top executives saw large increases in their compensation for the year.
Nonetheless, Medical Mutual continues with other insurers to press the state legislature for medical malpractice reform, based in part of the premise that such reform will positively affect insurance premiums charged to doctors. However, in the face of the reported profits, Dick Taylor, the CEO of the North Carolina Academy of Trial Lawyers, has asked the legislature to investigate the company’s practices. Medical Mutual’s premiums charged to physicians have increased an average of 45% over the last five years, leading Taylor to charge the company is “squeezing” its doctors.
Spokesmen for Medical Mutual promise that its increased profit margins will lead to either stabilization or premium rates or smaller premiums increases in the future. However, over the past year, University of North Carolina Health Care, a self-insured institution, saw its malpractice costs decline by 2% between 2005 and 2005 and anticipates a further drop of 8% in 2007. Decreases in malpractice costs are being seen across the country.
Source: Triangle Business Journal