Despite the fact that out-of-control jury awards have been blamed for the medical malpractice insurance crisis, a new study by Weiss Ratings finds no support for that widely held belief. Although damage caps did reduce the burden on insurers, most continued to increase premiums at a rapid pace, according to Weiss. In states with caps, the median annual premium went up by 48.2 percent while, in states without caps, the median annual premium increased more slowly, by 35.9 percent. Among the states with caps, only 10.5 percent experienced flat or declining malpractice premiums. In contrast, among those without caps, the record was better: 18.7 percent experienced flat or declining premiums.

"These counter-intuitive findings can lead to only one conclusion: there are other, far more important factors driving the rise in med mal premiums than caps or med mal payouts," the study noted. In addition to medical inflation, it cited insurance industry characteristics, including the insurance business cycle, which led to tightened underwriting standards and higher premium rates; the need to shore up reserves; and a decline in investment income for the entire property and casualty industry.

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