LOS ANGELES (AP) — The California Department of Insurance says the state’s biggest medical malpractice insurer only spent 10 percent of the $179 million it collects in premiums on lawsuits against doctors and other losses in 2009.

Insurance Commissioner Dave Jones says the low spending ratio at The Doctors Company and other insurers is a sign that the industry’s rates are too high and need to come down.

The state regulator called on insurance companies to lower rates in a statement Thursday, adding that his staff is going to examine rates of medical malpractice insurers.

Napa-based The Doctors Company insures more than 37 percent of the state’s doctors for malpractice.

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Comments (4)
  1. Hal McTavish III says:

    If rates are truly too high, other insurers would swoop in to compete. The California insurance market is VERY competitive.

    1. Razia says:

      I agree. The free market is what keeps rates low. We are also in a very soft market, meaning there are not nearly as many claims out there. During soft markets the carriers rebuild their surplus. When the hard market comes back around they will have to use that surplus to pay out claims. ( see http://www.equotemd.com/blog ). There are a lot of medical malpractice insurance companies in California. If one companies rates were too high the other carriers would grab market share. Some of the carriers also give out dividends at the end of the year, so the effective rate is lower.


  2. Bruce Dyson says:

    Its true, it’s all about the market competition. If the malpractice insurance rates are too high, there would be another slew of companies that would jump in and grab those who are paying the high rates. (see http://www.hcpnational.com/healthcare/medical-malpractice.php“>malpractice insurance). It’s the competition that brings us the best product for the lowest price. Without it, they would have a monopoly on the malpractice insurance market and would be able to charge whatever they wanted.

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