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Medical Malpractice Insurance

Annapolis, MD: (Dec-13-07) The state brought charges against Medical Mutual Liability Insurance Society of Maryland, the state's largest malpractice insurer, over rising malpractice insurance rates during the past several years. As part of a settlement reached, Medical Mutual will return $84.1 million to the state to make up for subsidies that helped soften rising malpractice insurance rates. Under the deal, Medical Mutual also will distribute $13.8 million to its policyholders, the Maryland health care providers who own the company. The return will come as a credit against future premiums.

Further, company officials stated that it also will reduce its rates by 8% in 2008, but because Medical Mutual will no longer participate in the state subsidy program, premiums will essentially remain stable for next year. Medical Mutual had initially declared a $68.6 million dividend for its policyholders, but state law provides that the subsidy payments be returned to the state before surplus money can be distributed to policyholders. Medical Mutual then changed its dividend projection to $97.9 million. This allowed the company to pay its debt to the state while also distributing some money to policyholders. [DAILY RECORD: MED MAL INSURANCE]

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Published on Dec-17-07


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