Doctors launch insurance company

The new company has attracted nearly 130 doctors.
COLUMBUS (AP) -- A group of doctors concerned about the price of malpractice insurance has formed its own insurance company, becoming the second medical group in Ohio this year to start a malpractice insurer.
"Our goal is to stabilize the prices," said Steven Salman, chief executive of Healthcare Underwriters Group Mutual of Ohio. "When doctors are on this roller coaster where prices can go up 200 percent in a year, it makes it very difficult for them to predict what they're going to pay."
Nearly 130 doctors have signed up since the company got its license Tuesday from the Ohio Department of Insurance.
The state said insurance rates are up an average of 20 percent in 2004, the fifth straight year of double-digit increases that include a 32 percent spike in 2002.
Despite the increase, none of the five companies offering malpractice in Ohio has made a profit in several years.
The other company starting to issue polices this year is OHA Insurance Solutions, formed by the Ohio Hospital Association.
Good competition
Insurance Department Director Ann Womer Benjamin said the new companies are a good sign.
"Additional competition can only help the move toward more stable and ultimately lower prices," Benjamin said.
Salman said Healthcare Underwriters will be a nonprofit mutual company owned by its physician members. The board of directors, consisting of doctors, will set premiums, underwriting standards and claims policies.
Policyholders will not have to pay for higher-than-expected losses because there is an agreement with a reinsurer, Salman said. Policyholders could receive dividends or reductions of future premiums if claims run below expectations.
Healthcare Underwriters believes other insurance companies are too willing to settle cases so it will more likely to go trial if the company thinks the doctor didn't do anything wrong, Salman said.