California Insurance Commissioner Steve Poizner announced a 20.5 percent rate cut for medical malpractice insurance offered by The Doctors Company (Doctors) following its acquisition of SCPIE Holdings Inc. (SCPIE), saving $54.3 million annually. "Prior to the Department's approval of the deal, concerns were expressed that this transaction would reduce competition in the medical malpractice insurance market in California and therefore lead to higher prices," said Poizner. "Thankfully, that has shown to not be the case. Competition remains strong. We will continue to monitor the new company and ensure that its rates are appropriate."
Poizner approved the transaction at the end of June. A condition of the authorization was that the company submit rate applications for both Doctors and SCPIE by Sept. 1, 2008, and at least every three years thereafter.
The combined rate decrease between the two companies is 20.5 percent. Individually, SCPIE had a 23.9 percent decrease ($29 million) and Doctors Company had an 18.0 percent decrease ($25.3 million).
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