Local Insurer MPM Ready for Today's Missouri Medical Malpractice Tort Reform Overturn Insurance company had implemented an innovative, forward-looking reinsurance agreement to ensure rate stability
ST. LOUIS, July 31, 2012 /PRNewswire/ -- Missouri Professionals Mutual was well prepared for the Missouri Supreme Court's decision today to declare unconstitutional a state law placing limits on non-economic damages in medical malpractice lawsuits. The statutory cap had been $350,000.
In 2011, MPM secured an additional $100 million of reinsurance in an innovative and forward-thinking transaction that enhances and fortifies the company's financial position and now enables it to keep its premiums fair and stable despite the change in law.
"This decision will drastically affect payouts in Missouri," said Timothy H. Trout, managing director of MPM. "A payout that would have been no more than $350,000 yesterday could now be more than $1 million. Most insurance companies will now be exposed to this payout unpredictability, and that could likely lead to a significant rate increase for physicians who are with other insurance companies. However, with our company's retrocessional reinsurance treaty safely in place, MPM can assure our insureds that the stability of their rates is safeguarded, and MPM's future viability remains strong."
While many mutual companies pay member dividends, MPM reinvested its surplus to fund its retrocessional reinsurance treaty, a decision that has proved savvy in light of the Missouri Supreme Court's ruling.
"Unfortunately, there is no quick fix for this issue, which is likely to have serious implications for many other Missouri insurance providers and their insured physicians," Trout said. "Historically, the cycle of tort reform damage caps has taken years to resolve."
About Missouri Professionals Mutual
Established in 2003, MPM is Missouri's number one choice for medical professional liability insurance and provides comprehensive coverage to nearly one-third of all Missouri physicians. In pursuing its mission to re-empower Missouri physicians, MPM has functioned as a cost-saving catalyst by stabilizing the premiums paid by physicians and surgeons for medical professional liability insurance. The ongoing support of MPM's physician partners has made MPM No. 1 in market share, No. 1 in premium dollars, and No. 1 in membership statewide since its first year in business. MPM's innovative outsourced business model, combined with our commitment to writing only actuarially sound insurance policies and a best-in-class claims management team, has enabled MPM to prevail in the Missouri marketplace and enable Missouri physicians and surgeons to focus, worry-free, on what they do best: practice medicine. For more information visit mpmins.com.
For more information contact:
SOURCE Missouri Professionals Mutual