Maryland's trial lawyers, striking the first blow in what could be one of the hardest fought issues of the upcoming legislative session, called today for tougher regulation of the insurance industry as a step to curbing skyrocketing premiums.
The Maryland Trial Lawyers Association Inc., with about 1,200 lawyers who represent plaintiffs in malpractice suits, recommended today that insurance companies be required to give policyholders notice of pending rate increases. They also said that the state should create a permanent position for a consumer representative to review proposed rate increases and to represent the public in hearings, similar to the Office of People's Counsel that currently participates in utility cases.
"Relief is sorely needed," particularly for obstetricians and gynecologists, said Stuart Salsbury, president of the trial lawyers group, "because many of them are finding that exorbitant insurance premiums are causing some of them to stop practicing or causing financial hardship. The increases are sudden and without notice, which is one of the problems we have with the insurance industry."
The trial lawyers issued their recommendations in response to the work of two gubernatorial task forces convened to address increasingly serious problems in the availability and affordability of insurance, for physicians and for others such as lawyers and day care workers.
The task forces advocated a $250,000 cap on awards for noneconomic loss -- so-called "pain and suffering" awards -- in damage suits. The malpractice task force also urged that successful litigants receive settlements paid over a few years rather than in a lump sum.
Although both task forces included representatives from the insurance industry, trial lawyers, doctors and consumers, neither resolved the question of which is more to blame for the rate increases -- the increasing number of lawsuits and the size of damage awards, as the insurance industry maintains, or the industry's aggressive cost-cutting during the last decade, resulting in greater reliance on interest income for profits.
The trial lawyers' president, stung by recent gubernatorial recommendations that would mainly require changes in the judicial system, said his group is "very disappointed" in those recommendations.
"None of them would bring about any immediate relief to the obstetricians" and would instead "take away the rights of individuals to be compensated for horrible injuries they have suffered," said Salsbury. The association recommends creation of an "insurance exchange" to match insurers and doctors, and a review of insurance practices.
These suggestions were dismissed as "simple solutions to complex problems" by J. John Spinella, president of Medical Mutual Liability Insurance Society of Maryland. He also said the public already has an opportunity to comment on rate increases, and an insurance exchange would have no effect on premiums.