Friday, September 16, 2005
Good News From Mississippi
With all the Katrina news from my birth state grinding on my soul, I loved reading this OpinionJournal piece about some good things happening there. It's about tort reform legislation passed a couple years ago.
Maybe I should buy a few California legislators a ticket to Jackson?
The Medical Assurance Company of Mississippi, which writes 60% of the medical malpractice coverage for doctors in the state, had raised its rates 20% the year prior to the tort reform legislation. After its passage, MACM did not raise its rates at all. "Those people who said tort reform would not work and actively fought any civil justice reform," Mississippi Insurance Commissioner George Dale said. "I think this indicates they were wrong." MACM also recently announced an end to its moratorium on new business; it also just declared it will cut its rates for 2006.What will be really interesting will be to see how this legislation works in the wake of Katrina. This is one heck of a wake up call to other states. California has recently limited punitives and some other things, but the heart of the California problem is Workman's Compensation.
Insurance was becoming less available and less affordable prior to the passage of the tort reform legislation. Now, the opposite is true. Some plaintiff lawyers and some consumer groups still contend that tort reform doesn't work--but it does not take a rocket scientist to understand that when liability exposure is made predictable and governed by reasonable rules, risk can be better assessed, and insurance companies are more likely to offer coverage.
Gov. Haley Barbour attributes the successful recruitment of new business to Mississippi to the lower cost of doing business in the state. Texatron has invested $35 million and Kingsford Charcoal $20 million; we have coaxed back Winchester Ammunition and its $3.5 million payroll, as well FedEx Ground, as part of a $1.8 billion expansion.
Maybe I should buy a few California legislators a ticket to Jackson?
