September 4, 2007
TMLT announces rate reductions and dividend for 2008
Laura Brockway, communications and advertising manager
(512) 425-5936 or email@example.com
AUSTIN, TEXAS... The Governing Board of Texas Medical Liability Trust (TMLT) has approved an unprecedented third straight rate reduction/dividend for TMLT policyholders. The Board has approved a 6.5% rate reduction for all medical specialties and classes effective January 1, 2008. In addition, all current TMLT policyholders renewing their policies in 2008 will receive a dividend equal to 22% of their expiring premium. The total dividend declared is approximately $35 million. The dividend will be applied at policy renewal.
TMLT has reduced rates five consecutive years since the passage of House Bill 4 and Proposition 12 in 2003: 12% in 2004; 5% in 2005; 5% in 2006; 7.5% in 2007; and 6.5% in 2008. The net effect of these cumulative rate reductions amounts to a 31% reduction from 2003 rates and approximately $200 million of premium savings.
The dividend for 2008 represents the third consecutive year TMLT has declared a policyholder dividend. By the end of 2008, renewing TMLT policyholders will have received dividends amounting to approximately $75 million. Since the passage of Prop 12 and medical liability reform of 2003, TMLT policyholders will have realized cumulative savings of approximately $275 million from rate reductions and dividends.
Effective tort reform has reduced claims intake and associated legal expenses. Improved Trust earnings have strengthened TMLT's financial position making these rate reductions and dividends possible. There is no guarantee that an ever changing business climate will ensure future rate reductions or dividends; however, TMLT continues to work diligently to protect 2003 tort reforms in an effort to keep premiums as low as possible. Rate changes and dividend considerations are determined annually by the TMLT Governing Board, executive management, and financial consultants to the Trust.