The Doctors Company lowered medical malpractice insurance rates recently — to levels as low as, or lower than, SCPIE’s rates. This has raised concern about the wisdom associated with such a move. Actuaries at The Doctors Company apparently determined that although the rates were insufficient to maintain SCPIE’s financial stability, TDC will be be able to offer equally low rates, yet produce better financial results.
Steve Poizner, California’s insurance commissioner, made an announcement about the rate cut for medical malpractice insurance offered by The Doctors Company (TDC). Mr. Poizner stated he believes the savings to the state’s physicians is an estimated $54.3 million annually.
“Prior to the Department’s approval of the deal, concerns were expressed that this transaction would reduce competition in the medical malpractice insurance market in California and therefore lead to higher prices,” Poizner said. “Thankfully, that has shown to not be the case. Competition remains strong. We will continue to monitor the new company and ensure that its rates are appropriate.”
Poizner approved the transaction at the end of June. A condition of the authorization was that the company submit rate applications for both TDC and SCPIE by Sept. 1, 2008, and at least every three years thereafter.