The Chicago birth injury lawyers at our firm are staunch opponents of tort reform measures, because we know the effect that it might have on many birth injury lawsuits. Most tort reform, measures target medical malpractice, and any experienced Chicago medical malpractice attorney can explain how mistakes made during childbirth are some of the costliest forms of medical negligence. Any changes to the justice system that limit the ability of these victims to receive the full value of their loss will have catastrophic effects. Victims lives will be made even worse and more mistakes will ultimately be made as an important incentives to maximize patient safety are removed.
Unfortunately, despite the clear danger, tort reform measures continued being proposed. Insurance companies are often at the heart of pushing these proposals, as they clearly have much to gain by not having to pay when their insured make mistakes. Public opinion is swayed by claims from insurance insiders that rising premiums are caused by lawsuits. Yet, as a new report from the Center for Justice and Democracy argued, the so-called “crisis” reported by the insurance companies are actually fabrications. In fact, the report argues that in 2012 insurance companies are set to invent yet another “crisis” in order to increase premiums, decrease services, and ultimately pad the industry profits.
The latest report, entitled “Repeat Offenders: How the Insurance Industry Manufactures Crises and Harms America,” outlines in persuasive detail how insurance companies are working to shift from a “soft” market to a “hard” one. A soft market-which we have been in since 2006-is one where companies actually compete to win customers and premiums remain stable. In contrast a “hard” market favors the insurance company, allowing them to increase premiums and decrease services. The companies are allowed to make the change if they can convince others that they are collectively having money problems. Therefore, depending on how they game their books, the industry can try to convince regulators that prices need to be collectively raised on individuals and businesses.
The claimed money crisis does not conform to reality. For one thing, the companies are doing just fine financially. According to Best’s Aggregates and Averages the industry had a surplus of $580 million last year-not counting the reserves it set aside to pay actual claims. Yet, regardless of this, the industry is gearing up to claim that a crisis is in place and premium increases are necessary to ensure the industry stays afloat. The industry is using the costs of Hurricane Irene as cover to make the claims. Of course, in realty the industry had plenty of reserves to cover the hurricane costs. Even then, the initial costs estimates were much higher than expected. While first estimates came in at $14 billion, the final total dropped to $2.8 billion when it was more accurately assessed. However, that didn’t stop the industry from forcing through a premium rate jump in November of this year, the first jump since 2005. All those involved in the legal system, from birth injury lawyers and injury victims to patient safety advocates should stand against these deceptive and self-serving insurance company maneuvers.
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