When one of Maryland?s malpractice insurance providers tried to write a $21 million check to the state, Maryland?s insurance czar issued a cease and desist order.
Medical Mutual Liability Insurance Society of Maryland reported that claims payouts have dropped and the company plans to repay more than $32 million of nearly $80 million in subsidies received from the state since 2005.
“The society will not participate in the Maryland Health Care Provider Rate Stabilization Fund in 2008,” the letter announcing Medical Mutual?s dividend added.
Maryland Insurance Commissioner Ralph S. Tyler scheduled a hearing for Oct. 5 to evaluate Medical Mutual?s plan.
“The purpose of the hearing is to determine whether or not the amount they are proposing is the proper amount,” MIA spokeswoman Karen Barrow told The Examiner.
State records show Medical Mutual received $79.7 million since June 2005 when it was the first malpractice insurer to accept a subsidy.
The company declared a dividend of $68.6 million in their Sept. 12 letter, made available by the MIA. Of that, company officials concluded $21.5 million is due the state for this year. They also announce plans to return $11 million received this year.
The General Assembly passed the subsidy program in 2004 after Maryland doctors marched on Annapolis to protest a proposed 33 percent increase in their malpractice premiums, Barrow said. The money was made available to help insurers hold their premiums down.
During 2005 and 2006, however, Medical Mutual reported $43.7 and $45.9 million in surplus income, according to the Sept. 12 filing.
State records show they received $20.8 million in subsidies in 2005 and $19.6 million in 2006.
Whether the company is liable to return the full amount of those subsidies could be considered during the hearing, Barrow said.
