Farmers Insurance Group To Cease Selling Medical Malpractice Policies in 18 States
Farmers Insurance Group announced Wednesday that it plans to stop selling medical malpractice insurance, a decision that will affect physicians in the 18 states that it serves, the AP/Houston Chronicle reports. The Los Angeles-based insurance company, owned by Zurich Financial Services of Switzerland, stopped writing new malpractice policies Friday and will end renewals Jan. 1, pending the approval of each state's insurance regulators. Farmers has recently been affected by "significant underwriting losses," according to spokesperson Michelle Levy, and plans to redirect its focus to its primary lines of life, business, home and auto insurance. She said the company has $94.5 million worth of active malpractice policies, a number that is down "sharply" from the $231 million it had in 2002, the AP/Chronicle reports. Levy added that the company lost over $100 million on its malpractice policies in 2002, with similar losses reported this year. Farmers' dropping of its malpractice program "narrow[s] an already tight market for physicians" in some of the markets that the insurer serves, the AP/Chronicle reports. Steve Schneider, vice president for the American Insurance Association, said, "This is a growing and pervasive trend" (AP/Houston Chronicle, 9/24). PRI's "Marketplace" Wednesday reported on Farmers' decision. The segment includes comments from Northwest Physicians Mutual Insurance Company CEO Jim Dorigan (Palmer, "Marketplace," PRI, 9/24).The full segment is available online in RealPlayer. This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
