1. PLUS Medical PL Symposium 2003

2. PLUS Medical PL Symposium

3. Doctors Strike “Hype outraces facts in malpractice debate” March 5, 2003

4. Who’s Right??? Physicians/Companies/Trial Bar Increased loss cost are driving rates Stock market losses are driving the rate increases Companies say average severity and loss cost going up Robert Hunter study “Public Citizen” claims cost has not changed over the last 10 years Trial bar contends that poor insurance management is the problem Insurance companies and doctors contend that greedy plaintiff attorneys are the problem Tort reform - $250,000 cap non-economic damages, MICRA is the answer Proposition 103, improve patient safety is the answer

5. Effects: “Red” Zones Access Threatened MDs Migrating Defensive Medicine Lead Carriers Exit St. Paul MIXX PHICO Frontier Severity Magnified in XS AMA: Availability Issues Are Real

6. Medical Malpractice – Combined Ratio Source: AM Best, Conning, Insurance Information Institute

7. Medical Malpractice: Losses & Expenses Paid versus Premiums Earned Source: Computed from A.M. Best data by the Insurance Information Institute Over the period from 1996 through 2001, premium earned rose 16.8% while losses and expenses rose 68.9%

8. Medical Malpractice: Underwriting Losses Source: Insurance Information Institute calculations based on data from A.M. Best. Med Mal underwriting losses exploded by $2.7 billion or 938% between 1996 and 2001!

9. Medical Malpractice: Cumulative Underwriting Losses The cumulative underwriting loss in Med Mal from 1990-2001 totals nearly $10 billion! Source: Insurance Information Institute calculations based on data from A.M. Best.

10. Driver: Increasing Awards Avg. Med Mal Jury Awards ($ Millions) Incident to Trial Cycle Time……….Down 20% since 1994 Indemnity Pmts > $1MM……………+100% since 1999 Settlement Costs Rising Too………+30% 1988-1999 Physician Limits……………………..Stagnant for 15 years Source: Jury Verdict Research, Insur Info Instit Severity and frequency of awards and settlements escalating costs

11. Claims Payments => $1 Million PIAA Data Sharing Project Year % of Paid Claims 7.9%

12. California Premiums Low w/Tort Reform Data From “Medical Liability Monitor” 2001 Premium Survey Data for Selected Specialties $1 million/$3 million limits Los Angeles rate:NORCAL Mutual Insurance Company New York rate:Medical Liability Mutual Insurance Company Chicago rate:Illinois State Medical Insurance Services, Inc. Miami rate:First Professional Insurance Company

13. Physicians and Surgeons Moderator:E. Dow Walker, CPCU, ARM, ARe, Chairman Willis Healthcare Practice (Nashville, TN) Panelists:David J. Kalainoff, Senior Vice President Transatlantic Reinsurance Co (New York, NY) James A. McGuire, Esq., Partner Mendes & Mount LLP (New York, NY) David Murray, President & CEO Medical Mutual Liability Insurance Society of Maryland (Hunt Valley, MD) Mary Hedin, Vice President MICA (Phoenix, AZ)

14. PLUS MPL Symposium 2003