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home / insurance / tort reform

Tort Reform


Not surprisingly, insurance companies oppose regulation and other reforms that limit their conduct. Instead, insurers as well as other industries that are frequent defendants in lawsuits -- spend millions on campaign contributions to lobby for legislation that restricts, rather than expands, the rights of consumers. They solicit support for their agenda by promising that "tort reform" will lower insurance premiums. History shows it never does.

Premiums Did Not Drop During the Insurance Crisis of the 1980's:
During the insurance crisis of the 1980s, insurance companies and their corporate allies in other industries claimed that damage awards, attorneys fees and access to the legal system were responsible for skyrocketing insurance premiums. They promised that premiums would drop if lawmakers passed "tort reform." Virtually every state in the nation followed suit. But insurance companies never lowered their premiums; indeed, the insurance industry itself admitted that "tort reform" was a fraud, and would have negligible impact on premiums.

Read an overview by FTCR of the 1980's Tort Reform Fraud.

Read the 1987 study by the insurance industry acknowledging that tort law changes would have no real effect upon insurance rates.

Read 1987 filings submitted to the Florida Dept. of Insurance by Aetna, State Farm and other insurance companies showing no significant savings. (The filings were made in response to a Florida law requiring insurers to estimate savings from tort law restrictions passed in that state. Also includes a National Insurance Consumers Organization (NICO) fact sheet dated October 20, 1987).

California's Law Restricting Medical Malpractice Lawsuits and Compensation Has Failed to Lower Insurance Premiums or Health Care Costs:
During a "medical malpractice insurance crisis" in the 1970s, California lawmakers approved a bill, sponsored by the insurance industry and the state's medical community, dramatically limiting the right of a person injured by medical malpractice to sue a physician or hospital. The law, known as MICRA, has been a disaster for patients, but a boon for insurance companies. It did not reduce premiums or health care costs.

Read a synopsis of the push to expand MICRA nationwide during the insurance crisis of the 1980s.

Read a brief analysis of MICRA and its impact in California.

Read FTCR's 1998 study of MICRA.

For more about the corporate attack on the consumer legal rights and the civil justice system, visit our Fair Justice section.

Last Updated: 8/15/02

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