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2005 SESSION

054179228
HOUSE JOINT RESOLUTION NO. 705
Offered January 12, 2005
Prefiled January 12, 2005
Requesting the Bureau of Insurance of the State Corporation Commission to study whether Virginia should require prior approval of medical malpractice liability insurance rates. Report.
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Patron-- Baskerville
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Referred to Committee on Rules
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WHEREAS, currently, rates for medical malpractice liability insurance in the Commonwealth must be filed prior to their use, and the State Corporation Commission may disapprove rates following their filing if it finds that they are inadequate, excessive or unfairly discriminatory; and

WHEREAS, in those states such as Illinois that require prior approval of insurance rates, the medical malpractice liability rates must be filed with and approved by state insurance regulators before they can be used; and

WHEREAS, the Connecticut General Assembly's Office of Legislative Research reported in January 2003, based on the Medical Liability Monitor’s 2002 medical malpractice rate survey, that the average medical malpractice premium in Virginia increased from July 1, 2001, to July 1, 2002, by over 100 percent; and

WHEREAS, in an examination of the 22 the states that cap damages in medical malpractice actions, the report found that in the same period for the average malpractice insurance premium increase for the 12 states that require prior approval of rates was nearly 17 percent, while the average premium increase for the 10 states that allow file and use of rates was 26 percent; and

WHEREAS, Virginia requires prior approval of insurance rates for certain lines of insurance, including insurance written through the Virginia Workers' Compensation Insurance Plan; and

WHEREAS, the State Corporation Commission is authorized to require prior approval of rates if it determines that competition is not an effective regulator of rates for a line or subclassification of insurance; and

WHEREAS, recent increases in premiums for medical malpractice liability insurance have forced several physicians to cease practicing medicine in the Commonwealth, thereby exacerbating a shortage of health care providers in areas of Virginia; now, therefore, be it

RESOLVED by the House of Delegates, the Senate concurring, That the State Corporation Commission be requested to study whether Virginia should require prior approval of medical malpractice liability insurance rates.

In conducting its study, the State Corporation Commission shall:

1. Estimate what the likely effect on medical malpractice liability insurance rates and premiums would be, in the aggregate as well as for specific practice areas, if Virginia required prior rate approval; and

2. Assess the likely effects of requiring prior approval of such rates on the availability as well as the affordability of medical malpractice insurance in the Commonwealth.

All agencies of the Commonwealth shall provide assistance to the State Corporation Commission for this study, upon request.

The State Corporation Commission shall complete work and shall submit to the Governor and the General Assembly an executive summary and a report of its findings and recommendations for publication as a House or Senate document by June 1, 2005. The executive summary and report shall be submitted as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents and reports and shall be posted on the General Assembly's website.