Skyrocketing insurance industry profits are proof that limiting the legal rights of injured people is not the solution to rising premium costs, according to Sen. Frank Shurden, D-Henryetta.
"Insurance premiums and profits are what need to be capped, not payments to people who are truly injured," Shurden said.
The veteran Democratic senator said that he doesn’t accept the arguments presented by Oklahoma Republican legislative leaders who plan to introduce "Texas Republican-style" lawsuit reform legislation during the 2004 legislative session.
"The Texas Republicans and their friends in the insurance industry thought that reducing the rights of their hard-working citizens was the answer. But if you really look at the facts, that's wrong," Shurden said.
"We have seen several studies in recent months that suggest the insurance companies and their lust for profits are a big reason for higher premiums."
According to The Foundation for Taxpayer and Consumer Rights, a recent study by the Insurance Services Office (ISO) and the National Association of Independent Insurers (NAII) showed that net income for the insurance industry increased by 320 percent during the first nine months of 2003 as premiums nationwide continued to rise.
The Oklahoma Insurance Department's 2003 Annual Report and Directory shows that state-licensed life, accident and health companies and property and casualty companies combined collected more than $7.8 billion in insurance premiums from Oklahomans during 2002.
"With this data in hand, how can we honestly let the insurance companies off the hook while our citizens are left with few options to protect themselves? That is wrong," Shurden remarked.
Shurden said that he plans to ask Insurance Commissioner Carroll Fisher for profit and loss statements on each insurance company licensed by the state to see how many billions of dollars in profit they made.
"We would all like to know the salaries that the CEOs and their top executives are being paid," he added.
Shurden also said that a recent Americans for Insurance Reform study of medical liability insurance rates showed that malpractice insurance premiums were affected more by the overall performance of the economy and the losses of insurance companies' investments rather than by jury awards to plaintiffs in malpractice cases.
The senator said that he believes medical liability reform legislation formulated by Gov. Brad Henry's special task force and passed by the legislature in 2003 has not produced evidence that tort reform is the answer to lower premiums for doctors.
"As soon as that legislation was signed into law, we saw our state medical malpractice insurance provider request and receive an 83 percent rate hike over the next three years. So-called frivolous lawsuits had nothing to do with that huge increase," Shurden said.
"Republican legislators and their cronies in the insurance industry need to stop using trial lawyers and injured people as scapegoats for rate hikes. I'm not saying our legal system is perfect, but until we see less greed from the insurance industry, I don't think the legislature should take the tort reform crowd seriously."