During the past year, life insurance companies have dramatically raised
the fees they are charging their customers. The industry asserts that
the premium spikes, which range from single-digit percentages to more
than 200 percent, stem from a poor rate of return on their investments.
They attribute the problem to the Federal Reserve’s decision to
keep interest rates lower for longer, which has led to low rates of return
on bonds in banks around the world. “These firms earn much of their
profit by investing customers’ premiums in bonds until claims come
The author reports that when investments do poorly, insurance companies
raise their fees to maintain the profit margin they need. While the premium
hikes affect life insurance first, they eventually affect malpractice
insurance as well. Therefore, based on similar occurrences in past decades,
he predicts that a malpractice insurance crisis looms in the not-too-distant future.
Whenever malpractice insurance rates skyrocket, it triggers a surge of
public concern. Outraged voices say nuisance lawsuits are ruining the
insurance system, and they call upon lawyers to curtail them. However,
an examination of the evidence shows neither the number of nuisance lawsuits
or monetary damages paid out increased during the 2003 medical malpractice
insurance crisis. Instead, the trouble stemmed from poor insurance company
investments and the premium spikes that ensued to make up for the decreased income.
Whether malpractice stems from negligence, incompetence or human error,
it happens more frequently than people assume. For more information, see
Medical Errors: Third Leading Cause of Death.
For insight into your potential
medical malpractice case,
contact our skilled D.C. medical malpractice attorneys to schedule a private consultation.