In Kansas, most physicians buy malpractice insurance through KaMMCO, a mutual insurance company that is an affiliate of the Kansas Medical Society.
KaMMCO policies cover up to $200,000 in liability, after which the state’s Health Care Stabilization Fund covers an additional $800,000.
Physicians who want or need more than $1 million in coverage are expected to buy supplemental policies through KaMMCo or other companies.
“Sometimes, I think people forget the reason we started KaMMCo 20-some years ago was because the malpractice market had literally fallen apart because the business was neither profitable nor predictable, and we couldn’t have a situation where physicians couldn’t get insurance in this state,” said Jerry Slaughter, executive director of the Kansas Medical Society.
The 1986 law that limited pain-and-suffering awards for malpractice victims to $250,000, he said, helped stabilize the malpractice insurance market.
It also increased insurers’ profits, contends Brad Prochaska, a Wichita attorney and president of Kansas Association for Justice, formerly known as the Kansas Trial Lawyers Association.
“There are two primary carriers in Kansas and both are making enormous profits,” he said, noting he had subpoenaed documents in another case showing that KaMMCO has more than $150 million in assets; the quasi-public Health Care Stabilization Fund, has more than $200 million.
Slaughter said KaMMCO and the Health Care Stabilization Fund have done well.
“What doesn’t get said in all this is that KaMMCO is also a mutual insurance company, which means there’s no money being paid out to shareholders. The money remains with the company,” he said. “The $150 million that’s there has to be there to cover the projected liability. It’s money that’s already spoken for, if you will.”