press100603


Press Release

For Release:                 Immediate
Contact:                       Mary Anne Midura at NJAJ: 609-396-0096
                                    Stu Miller at Oxford Communications: 609-397-4242
Date:                            October 6, 2003

ASSEMBLY HEARING PROVES THAT CAPS ARE NOT THE
CAUSE OF AN INSURANCE CRISIS
State’s Largest Malpractice Insurer Admits They Don’t
Track Pain And Suffering Damages

Trenton, NJ – Testimony at a recent special state Assembly committee hearing investigating drastic increases in medical malpractice insurance premiums heard from a top insurance company executive that New Jersey’s largest medical malpractice insurer doesn’t even track how much it pays out in pain and suffering damage awards.

            While the medical and insurance establishments have blamed excessive non-economic damage awards for the spike in medical malpractice insurance premiums, their business practices say otherwise.

            Testifying at a hearing on October 2, Kieran Pillion Jr., vice president and general counsel at the Princeton Insurance Co., the state’s largest medical malpractice insurer, when asked if the company tracks what it pays for non-economic damages (also known as pain and suffering) as opposed to medical expenses or lost wages replied, “I know they don’t.”

            “It’s not the kind of data that’s needed by the company or its actuaries, and we just never captured it,” testified Pillion.

            “This testimony was incredible,” said Brian D. Drazin, president of The Association of Trial Lawyers of America-New Jersey (NJAJ).  “ The medical and insurance establishments have claimed that excessive non-economic damage awards are the cause of malpractice insurance hikes.  Now you have a top official of the state’s largest malpractice insurer saying that they don’t know how much they pay out or seem to care.”

 Pillion’s testimony is further proof that caps are not the solution to lowering the state’s medical malpractice insurance rate hikes.  The Administrative Office of the Courts released a study showing that in the 149 medical malpractice cases tried during the first eight months of 2002, only 32 cases resulted in an award for the victim and just six of those exceeded $1 million.

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