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Show An insurance crisis High insurance rates caused by money greed By BRYAN GRAY Clipper-Reflex Columnist The president of a legal organization organiza-tion says there is an "insurance crisis," cri-sis," but the crisis is "manufactured" "manufac-tured" by greedy insurance companies com-panies reaping exorbitant profits. "THE LEGAL profession is being made the whipping boy and the consumer is being made the end-result victim," says John S. Adams, president of the Utah Trial Lawyers Association. "The insurance insur-ance industry actively sought premiums pre-miums several years ago when it could invest the money at high interest in-terest rates. Now that interest rates have dropped the insurance indus- dustrial nations. And despite the media's portrayal of multi-million dollar judgments, about 90 percent of all claims are of minimal amounts and verdicts favor the defendants de-fendants in from 70-85 percent of all medical malpractice cases. The insurance industry is not telling people that 98 percent of all injury claims are settled without anybody even going to court. Only four claims out of every 10,000 are even tried to conclusion." ADAMS DEFENDED the "contingency "con-tingency fee" system in which lawyers accept a client's case for an agreed percentage of the final judgment. "Without the contingency conting-ency fee system, many poor and The call for "caps" to be placed on the amount of money awarded is also injurious to the public, he says. A $100,000 judgment may sound ample, he points out, but it is hardly fair compensation for an injured in-jured child maimed and paralyzed for life. "THE INSURANCE industry is shifting the blame for their own mismanagement on innocent victims, vic-tims, those horribly injured due to negligence, defective products and drunk drivers." If local legislators pass restrictions restric-tions and caps on litigation, he says, it is doubtful that consumers will realize a savings. A recent report re-port indicates that such restrictions "The insurance industry is shifting the blame for their own mismanagement on innocent victims.. ."John S. Adams middle-class Americans would be effectively blocked from the courtroom. cour-troom. A medical malpractice case, for instance, might easily or - try is 'crying wolf and throwing phantom figures around about how much money its losing. The facts are actually much different." According to Adams, the insurance insur-ance industry's net worth increased in-creased by some $7.6 billion in 1983 with one leading life and casualty firm reporting a 1985 operating oper-ating profit nearly double the previous pre-vious year. The industry's total assets jumped about five percent between 1983-84 and the Wall Street stock index of insurers rose by 50 percent in 1985, almost double dou-ble the rise of the general stock market. "Stock market investors are obviously aware of the great profits of insurance carriers," says Adams. "If there was a true financial finan-cial crisis, would Wall Street be trying to grab the insurance stocks?" THE INSURANCE companies have successfully convinced most of the public that Americans are "sue happy" and that claims are skyrocketing, he says. "But the facts show a different story," says Adams. "A UCLA study has shown that Americans are actually no more likely to sue than were our ancestors and we are no more likely to seek litigation than are citizens of other major in- in the U.S. and Canada have done little to make insurance more available avail-able and less costly. The Utah Legislature's Leg-islature's recent restrictions on dram shop judgments, he says, have not lowered the rates Utah restaurants and taverns pay for alcohol-related coverage. "IT IS our belief that the insurance insur-ance firms will pocket the additional addition-al profits, not return them to the public in the form of lower premiums," pre-miums," says Adams. "And lawyers are affected, too. by the so-called insurance crisis. The malpractice mal-practice rates for many legal firms have soared 250 percent in the last year, despite the tact the tirms have never had an insurance claim." Adams also supported the Amer-ican Amer-ican judicial system. Unlike citizens of some other countries who resort to violent revolution, U.S. citizens generally take their unresolved grievances to the courtroom, cour-troom, not the streets. "It's in the American courtroom that citizens achieve equity and an opportunity for a fair shake," says Adams. "They might not always agree with the verdict or the judgment, but they realize that we have the most fair and equitable system in the world." JOHN S. ADAMS lead to $100,000 in research, expert witnesses, deposition and related costs. How many citizens could afford to take that kind of gamble? A destitute person could be injured for life and yet not have the funds to seek legal action." |