AIA Calls on Ky. To Reform Tort Liability System

Enacting key reforms to Kentucky’s tort litigation rules is the single most important step the state can take to improve its medical malpractice insurance environment, the American Insurance Association (AIA) said at a hearing held by the Kentucky Department of Insurance.

Amid evidence that conditions in the Kentucky medical malpractice market are deteriorating, “the only real solution to the current situation is to improve the predictability and stability of Kentucky’s tort liability system,” David Corum, AIA assistant vice president, said.

National Practitioner Data Bank information revealed that the number of claim payment reports in Kentucky grew by 40.6 percent from 1996 to 2000, compared to 4.9 percent countrywide. Although average claim costs for Kentucky appear to be no greater than the national average, Kentucky does appear to have more very expensive claims.

“A higher incidence of very expensive claims suggests there is greater uncertainty in Kentucky when predicting overall costs and pricing coverage because a very small change in the frequency of high-cost claims can have a major impact on total costs and insurance results,” Corum said. “All these conditions make Kentucky’s medical malpractice claim environment less stable and less predictable than what is true for the country generally. These findings also suggest the potential value and importance of enacting key tort reforms in Kentucky.”

History has shown that certain tort reforms clearly reduce both the frequency and cost of claims. At the top of the list are caps on non-economic damages; reducing damage awards by amounts received from non-liability sources (collateral source rule); and, procedures for certifying the merit of lawsuits (such as pretrial screening panels). Corum noted that while a number of states are experiencing problems in their medical malpractice insurance markets, the healthiest states are more likely to have enacted major tort reforms in the past.

“The best example is California, which enacted a comprehensive set of reforms in 1975 (MICRA), and has since enjoyed a relatively stable and affordable market for medical malpractice insurance,” Corum commented.

Topics Kentucky