West Virginia’s medical liability insurance market is in a crisis and it has be fixed soon according to Gray Marion, Professional Independent Insurance Agents of West Virginia executive vice president. Marion commented on the results of a recent poll conducted by PIIA of West Virginia and the West Virginia Insurance Federation.
Despite civil justice changes for the medical liability insurance market in 2001 and 2003, other commercial and personal insurance lines continue to experience problems with availability and affordability.
“My guys have nothing to sell. More and more carriers every year have decided to limit their business in West Virginia,” Gray Marion, executive vice president of the Professional Independent Insurance Agents of West Virginia said. “There are fewer carriers writing business today than ever before. It’s a problem that affects the general citizenry and our economy.”
“There has been a lot of indecision and now everything has deteriorated to the crisis point,” Marion said. “This has to be fixed now or Gov. (Joe) Manchin’s economic development (plans) won’t work.”
In December, RMS Strategies conducted two sets of focus groups and then polled 551 West Virginians by telephone. The results carry a margin of error of 4.2 percentage points.
Some of the key findings presented to The State Journal: 66 percent of West Virginians said too many lawsuits are brought against insurance companies in the state; 40 percent said jury awards given to those suing insurance companies are too high; 26 percent said awards are “just right;” 87 percent said they strongly or somewhat agree it is unfair to allow people to sue for an amount that exceeds the cost of the injury; 88 percent said it is important for the Legislature to address the cost of health insurance; 78 percent believe lawsuit abuse should be addressed; 78 percent said the same about homeowners and auto insurance costs; and 66 percent want business insurance costs to be addressed.
In addition, 69 percent said insurance fraud occurs frequently in West Virginia, and 63 percent said fraud contributes to the cost of insurance; and 81 percent said it is extremely or very important for the Legislature to change insurance laws to make West Virginia more business friendly.
“Look at the plans to privatize workers’ compensation. If this state does not build an attractive insurance market, when the (workers’ compensation) market is opened in 2008, companies won’t come here,” Jill Bentz, West Virginia Insurance Federation president said, referring to legislation passed during the January special session to transform the state system into a private company.
Manchin is scheduled to unveil his entire legislative agenda during a PowerPoint presentation today. Marion and others hope the governor has taken the results of the RMS poll to heart when constructing insurance-related bills.
Marion said the industry decided to conduct the poll because it needed “solid, objective, verifiable, incontrovertible research” to take to lawmakers, and RMS’s work fit the bill.
According to Mark Blankenship, RMS senior vice president, the results show that West Virginians recognize problems with insurance and want lawmakers to address those issues, but they don’t have any faith the Legislature will act.
Eighty-three percent said it is important for the Legislature to address health insurance costs, but only 14 percent said it is likely the issue will be addressed, Blankenship said.
“Among the majority of West Virginians, there is little faith that the Legislature will address the cost of insurance and other cost issues,” he said.
Likewise, 66 percent said homeowners and insurance costs are a problem, but only 5 percent of those polled expect the Legislature to take any action. Just 5 percent said they believe legislators will address business insurance costs.
In the area of civil justice reforms, 89 percent of respondents said third-party bad-faith lawsuits create incentives for personal injury attorneys to file unjustified lawsuits. And 69 percent said they do not agree with the joint and several liability principle in West Virginia, which can leave one defendant paying more damages than another regardless of how liable that defendant is.
Overall, Blankenship said, the poll shows the public recognizes how jury awards and excessive lawsuits can be a problem in West Virginia, and that eight in 10 residents favor changing insurance laws to improve the state’s business climate.
And who do they trust most to improve the insurance industry? The governor — 66 percent said they trust the governor more than the Legislature, insurance commissioner and insurance companies to change the industry.
As it does every year, the insurance industry is going to have to battle the West Virginia Trial Lawyers Association, among others, when it pushes for civil justice reforms, particularly when it comes to changing the Unfair Trade Practices Act, which is the section of code governing “bad faith” by insurance companies.
Limiting third-party lawsuits, which would prohibit a person from suing an insurance company with which the plaintiff has no relationship, will limit a person’s access to the courts, according to Jim Casey WVTLA lobbyist.
“Opening the doors of this state to business but closing the doors to the courthouse is a bad choice,” Casey said.
Bentz said the insurance industry reforms do not limit access to the courts and ultimately will benefit consumers.
But Casey said tort reform has not been shown to have any effect on insurance rates.
“If they can demonstrate some relationship between joint and several or collateral source and what people are paying in rates, that would be one thing, but even the insurance commissioner can’t find it,” Casey said. “The problem is one that is cyclical with the insurance industry. You saw it in the mid-’80s with a crisis in availability and affordability, and it coincided with a bad period in the stock market. Now it’s happened again, and insurance companies already are recovering, but they’re singing the same song.”
Casey said internal shrinking of the insurance industry, coupled with West Virginia’s small pool of subscribers, makes it difficult to attract carriers.
Some changes his organization will support include “legislation to get rid of perceived frivolous lawsuits” and creating an independent consumer advocate to help insurance subscribers, both individuals and businesses, with their insurance problems.
Topics Lawsuits Carriers Legislation Virginia Market West Virginia
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