Tag Archives: Susan Forray

How did COVID-19 affect attorney fees?

With many states remaining under stay-at-home advisement, liability attorneys have delayed various in-person actions, including depositions. A review of a Milliman database of defense attorney invoices allows this delay to be quantified.

For example, attorneys attended 80% fewer depositions in the second half of March, contributing to an overall reduction in attorney fees of 6% to 7% for the month. By the end of April, however, attorneys had become more comfortable with virtual depositions, allowing them to attend 20% more depositions.

To read more about how depositions were affected by the COVID-19 pandemic, read this article by Milliman’s Susan Forray, Chad Karls, and Joseph Mawhinney.

Addressing actuarial and tax issues arising from premium rebates

An unexpected issue faced by property & casualty insurers during the COVID-19 pandemic has been premium refunds to policyholders – especially on personal auto policies.

The refunds and rebates are justified by substantial reductions in auto claims and losses because people have driven less as a result of being sheltered at home, and as stores and restaurants have remained closed or with restricted operations.

Beginning in late March, shortly after stay-at-home orders were widely imposed nationwide, many insurers began voluntarily paying partial premium refunds to personal auto policyholders. In addition, some state insurance commissioners have mandated auto premium refunds because of the reduction in miles driven. In addition, where permitted, some companies have begun offering discounts on renewal premiums to reflect the current better-than-expected loss experience instead of or in addition to refunds on current policies.

In this article, Milliman’s Susan Forray and Eric Krafcheck discuss actuarial considerations for premium refunds. They also provide perspective on the tax treatment of premium refunds from the standpoints of insurers and policyholders.

Foley & Lardner’s Richard Riley, Jr., also contributed to this article.

Would a patient compensation system decrease or increase MPL costs?

Over the past several years, legislation introducing a patient compensation system (PCS) has been proposed in several states. Proponents claim a PCS would eliminate the stigma associated with medical professional liability (MPL) claims for healthcare providers. Without the stigma, they believe physicians would not defend themselves as often, resulting in lower legal defense costs than the current tort system produces.

However, some do not agree that the stigma would be less under the PCS system. Additionally, several factors present under current PCS proposals indicate that there will be more reported and indemnified claims, leading to higher MPL costs. In this article, Milliman consultants Susan Forray and Eric Wunder discuss aspects of some states’ PCS proposals that MPL carriers and healthcare providers need to consider.





Lawyers professional liability update: Insurers’ string of strong financial results continues

Financial results for 2013 are strong for specialty writers of lawyers professional liability (LPL), with operating ratios at the lowest levels in more than 10 years, insurers returning 30% of their net income to policyholders in the form of dividends, and an all-time high in industry surplus, among other measures.

This issue of P&C Perspectives, authored by Susan Forray and Andy Kline, analyzes the financial results of a composite of 14 specialty writers of LPL coverage for solo practitioners and small firms. The article examines operating results, reserve releases, claim frequency, capitalization, and net retentions.





Financial implications of raising California’s MICRA cap

California’s Medical Injury Compensation Reform Act (MICRA) has been the blueprint used by states to reform their medical professional liability (MPL) markets since its enactment in 1976. In part, the landmark legislation helps reduce MPL premiums and increase the availability of coverage for physicians by capping noneconomic damages at $250,000.

A pending ballot initiative in California now aims to increase the cap. In this Best’s Review article by Milliman’s Susan Forray and Stephen Koca, the consultants examine the financial effects an increased cap can have on the state’s MPL industry. They also consider how other states with similar tort reforms may come into the crosshairs.

Here is an excerpt:

Three dozen states have adopted some form of a cap on damages over the years, although in 12 of these states the cap has been overturned or otherwise invalidated, and remains overturned in most of these cases. And while these caps are often less effective than California’s, either because of higher limits or exceptions, they followed MICRA’s lead and reduced costs in many MPL markets.

Texas is perhaps the best example of a state whose MPL premium has been reduced by the effects of a cap on noneconomic damages. MPL premiums in Texas had been in close step with national trends until 2003, the year reforms were enacted in the state. Premiums declined relative to national levels a year after reforms were enacted, and continued to moderate for several years.

While nationwide premium per physician is approximately 25% less than in 2003, MPL premiums in Texas have fallen by more than 60% since that time—a clear demonstration of the impact that reforms have had on the MPL costs in the state, and a warning sign of potential increases that could be seen in California if the cap is increased.

For more perspective on the impact a higher cap would have on MPL claims, read Stephen’s article “The end of an era for noneconomic caps?





Tort overhaul: Patient compensation system legislation raises more questions than answers

In recent legislative proposals in Florida and Georgia, lawmakers have sought to establish a patient compensation system (PCS) as an alternative to litigation for compensating patients with injuries that could have been avoided under alternative healthcare (referred to as “medical injuries” within the legislation).

Proponents say offering a PCS as an alternative to litigation could lead to faster outcomes with claims. Advocates claim that faster claim resolutions and less attorney involvement would ultimately reduce overall costs, while providing access to compensation for more patients. They also argue that this system would benefit claimants with minor injuries, who are frequently excluded under the current system, because their claims generally do not result in the kind of large monetary awards that make taking a medical professional liability (MPL) case cost-effective for plaintiff attorneys.

Can PCSs really provide the many benefits, in cost savings, fairness, greater access, and efficiencies, that their proponents claim? This article by Christine Fleming, Eric Wunder, and Susan Forray offers some perspective.

This article was originally published in Inside Medical Liability, First Quarter 2014.