When West Virginia citizens first began to realize the state was facing a medical malpractice insurance crisis, it was largely because their own doctors were leaving the state, or threatening to leave, due to the fact they either could no longer afford or could not obtain malpractice insurance. Now our attention will be focused on problems related to other types of insurance.
A legislative interim committee has begun studying several issues related to the insurance climate in West Virginia. In particular, the committee will consider legislation related to automobile insurance and homeowners insurance.
Consider these alarming facts:
* Just in the past few months, the state's largest insurance company, State Farm, gained approval to raise its auto rates by 9.4 percent. State Farm stopped writing new auto policies in December.
* State Farm, Allstate and Farmers Mutual have stopped writing new homeowners policies.
* Automobile and homeowner insurance rates in Virginia are about half of what West Virginians are charged.
* State Farm's recent auto rate increase is in addition to an 11.3 percent increase approved last year.
* In the past two-and-a-half years, State Farm's auto insurance rates have increased by more than 20 percent and Allstate's auto rates have increased by more than 30 percent.
One issue the Legislature will likely consider is the state's current limit on when an insurer can cancel or refuse to renew a policy. West Virginia is one of only a handful of states that set such limits, and insurance companies operating here are lobbying to change the laws.
Insurance companies have also protested a state law that allows non-policyholders to sue an insurer for allegedly refusing to fairly settle a claim involving that company's policyholder. But trial lawyers and some consumer activists argue that such "third-party bad faith" lawsuits are legitimate and shouldn't be banned.
The legislative committee will spend the coming months studying the issues, gathering facts and figures and hearing from interested parties. Based on what we know so far, it seems the Legislature will have to do something to address the problem to make sure we all can find affordable automobile and homeowners insurance.
Meanwhile, I noticed with interest that several other states, including Florida and Pennsylvania, are debating the medical malpractice insurance issue - and looking to West Virginia for guidance. Ours was a trial by fire, but I'm hopeful that our medical insurance climate will soon improve.
Work is progressing on the formation a physicians' mutual, which will allow the state to discontinue offering malpractice insurance, as hoped. In March, Charleston Area Medical Center officials told the Charleston Daily Mail that doctors, encouraged by the Legislature's insurance and lawsuit reform, are starting to return to West Virginia.
Similar to the state's effort to provide the basis for a physicians' mutual, the legislative interim committee studying insurance issues is also looking at allowing state hospitals and nursing homes to form "captive" insurance companies. As with a physicians' mutual, the company would be owned and controlled by the policyholders, but captive companies generally have fewer policyholders than mutuals. As the health care industry continues to change, it's essential that the Legislature do everything possible to ensure the stability of our hospitals and nursing homes. Allowing for captive insurance companies may be one way to do that.
Being a member of the House Judiciary Committee and having served as a member of the conference committee that negotiated the final medical malpractice bill, I know that any issues regarding insurance and lawsuit reform are complex, and often controversial. I'll be watching closely the progress of the interim committee and will report back on its progress.
I welcome and appreciate your input on these issues, or any other legislative matter. Please call me at (304)340-3106 or write to Delegate Virginia Mahan, 215-E, Capitol Complex, Charleston, WV 25305.