Insurance carriers spend far more money on their attorneys, peers, re-peers, IME doctors, and “experts” each year than it would cost to pay every single no-fault claim as it came in.
Insurance carriers spend far more money on their attorneys, peers, re-peers, IME doctors, and “experts” each year than it would cost to pay every single no-fault claim as it came in.
But by doing what they are doing they are making greater profits. I keep coming back to this. Insurance companies make as much money holding onto the consumer’s money as they do by profits over expenses. Profit over expenses is very acurately calculated through the “law of large numbers” — an actuarial term. This number along with investment of the premiums — which is supposed to be the same as pure profit after expense — gives them total profits. Hold onto the consumer’s money longer then you should and you increase your investment profits.
How is that done. Refuse to pay claims. The delay is called “settlement lag” and can double profits.
Insurance companies also rely on the “efficient breach” in their fraud arsenal. That is the truism that the party that breaches a contract is in the superior position. If they lose they are limited to paying out what they should have paid in the first place plus deminimus interest — look how the Insurance Department and the courts have limited interest and attorney fees; that is to protect insurance companies ill gotten gains.
When you own the government you make the rules.
Plus let’s face it. There is a full court press led by insurance company money in this state to destroy providers and provider attorneys. Let us be real in our assesment. The degree of government — legislative, judicial and regulatory [executive branch] — and insurance company coordination in all phases of day to day activity in the industry right now envinces planning with an ultimate end game.
Press coverage of some garden variety fraud cases — the medicare scam excluded [that sickens me] — provides the industry with the justification for their borderline secret police tactics.
Of course some elements of the no fault industry — provider side — through greed and idiocy are always there to provide illustrative examples of fraud and excess; however small they may be in the overall picture.