Thursday, February 27, 2003

Florida's new Chief Financial Officer says in this piece that rapidly rising malpractice insurance premiums are largely because of insurers' practice of undercharging for coverage in previous years:
"In hindsight, rates probably should have gone up about 10 percent a year over the past seven or eight years, and they didn't,'' Gallagher said. ``And when that doesn't happen and should have, you're left with a very large hole, which means we allowed rates over those years to be lower than they should have and created a crisis at this point.''

Gallagher said other factors contribute to medical malpractice problems, including huge losses in the reinsurance market. Reinsurers insure insurance companies as a safety net against catastrophic losses.


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