The insurance structure may be adding to doctors’ problems ofhigh premiums and lost or endangered malpractice coverage,insurance agents say, but they stand united with doctors insupporting tort reform.

With large verdicts and settlements resulting from the state’slegal climate, insurance companies are leaving the state or nolonger offering malpractice coverage. That has left some doctorssearching for coverage and those with coverage paying much higherpremiums.

“Truth be known, they were waiting something to happen so theycould pull out of the state. It just hit me at renewal,” said Dr.F. Lee Neal Jr., whose policy expires July 17.

Neal said he has been insured with Mutual Assurance of Alabamasince 1993, but the company recently informed him they would not berenewing his malpractice policy because they are leaving thestate.

“We want tort reform from an insurance standpoint because allthe companies are pulling out,” said Terry Pendley, an agent withMedical Underwriters of Mississippi.

Many insurance companies are scrambling to cover themselves fromlarge potential losses in the wake of Sept. 11, a volatile stockmarket and Mississippi’s million dollar verdicts, Pendley said.

Insurance Commissioner George Dale acknowledged that legalissues were not the only things affecting insurance premiums.

There is some truth in Sept. 11 causing raised premiums, Pendleysaid, but he downplayed it as a significant source.

“A few years ago, an event like Sept. 11 may have collapsed theindustry,” Pendley said, “but the stock market had been going welland allowed many of the companies to make money oninvestments.”

Now, however, the wild rise and fall of the stock market hasmade the companies leery of counting on it as a source of revenue.Therefore, insurance premiums have escalated to account for thatloss, Pendley said.

In the past, he said, insurance companies were able to offerlower premiums because even if they lost money on the policy theywould make up for it on the stock market. In years when they didnot lose money on policies, the extra gained was reinvested asadditional capital and they could make more money.

This kept premiums down, he said, but now the companies cannotrely on the stock market to offset any policy losses and thepremiums must rise to account for that.

In addition, Pendley said, Mississippi does not have theeconomic leverage of some other states to make demands of theindustry. He cited low population and the danger of hurricanes onthe Coast as hindrances.

“We’re not a wealthy or populous state,” Pendley said. “Floridacan make demands because they may get hit by hurricanes, but theyhave a high population to offset that. We don’t have that.”

Mike and Alvin Smith of Smith Insurance Agency agreed. TheSmiths estimated Mississippi’s insurance premiums amount to abouthalf of 1 percent nationally. They said the companies are not goingto expose themselves legally for that kind of return.

“They’re not going to put their assets at risk down here,”AlvinSmith said.

Perhaps the biggest obstacle facing insurance companies,however, is the rapid rise of “jackpot justice” in Mississippi.

Dale cited state medical association statistics showing thatthrough 1999 there had not been a $1 million insurance claim. From1999-2001, there were three and this year there have already beenthree totaling $15 million.

“There are a lot of companies not willing to come intoMississippi because of the risk,” Pendley said.

Doctors and insurance agents believe tort reform may be theanswer, or at least part of it.

Editor’s note: On Thursday, Lawyer-Representative Bobby Moakand other lawmakers offer their views on the call for tortreform.