ISMIE to issue $18.4-million dividend to policyholders
Med mal insurer also will leave rates unchanged for policy year that starts July 1
By Mike Colias
The stateâ€™s largest medical malpractice insurer plans to return $18.4 million to policyholders through a dividend, reflecting its improved financial picture and a more stable liability environment for Illinois doctors.
ISMIE Mutual Insurance Co. also said it will leave premium rates unchanged for the policy year that starts July 1. Premiums paid by doctors to ISMIE and other insurers spiked from 2002 to 2004, but the rate increases have eased in recent years.
The insurer didnâ€™t disclose an average dividend amount. It said a â€œtypical creditâ€? would be $453 for a Chicago-area internist and $2,880 for a neurosurgeon. (ISMIEâ€™s average annual premium for an internist in 2006 was $37,688, according to the Medical Liability Monitor newsletter.)
â€œItâ€™s a good start, and weâ€™re optimistic thereâ€™s more relief on the way,â€? ISMIE Chairman Harold L. Jensen said in a statement.
The dividend for ISMIEâ€™s 2005-2006 policy year will be paid in four annual installments, starting with a $5.5 million disbursement this spring, ISMIE said. The payments will be credited toward doctorsâ€™ future premiums.
Dividends in future years will depend on how the insurer does financially.
ISMIEâ€™s announcement follows its best financial year in two decades. Net profit was $50 million â€” second-highest in ISMIEâ€™s 31-year history â€” while the number of claims filed fell 21.5%. But the average payout per claim rose 16% to $627,000, which Dr. Jensen called an â€œominous continuing trend.â€?
Dr. Jensen cautioned that continued rate relief will depend on the outcome of court cases challenging Illinoisâ€™ 2005 medical-liability reform law, which limits jury awards for pain and suffering to $500,000.
At least three lawsuits challenging the constitutionality of the caps have been filed in Cook County Circuit Court. A hearing on the lead case â€” a family who claims its baby suffered brain damage due to a botched delivery at Gottlieb Memorial Hospital in Melrose Park â€” is set for July.