Tort reforms are the best proven instrument for reducing medical liability insurance premium growth, according to a new study conducted by Stanford University Professor Daniel P. Kessler, JD, PhD, who also serves as a research associate for the National Bureau of Economic Research in its Health Care and Law and Economics programs. The new study was funded by the Physician Insurers Association of America (PIAA).

In the study, Kessler investigates the determinants of malpractice premiums by reviewing existing literature and performing original calculations with data from the National Association of Insurance Commissioners (NAIC) and the Texas Department of Insurance.

The three main findings of Kessler's research were:

●Increased claims costs are the primary driver of premium rate increases
●Tort reforms decrease claims costs and, in turn, premiums for physicians
●There is no evidence that anticompetitive behaviour, weak regulation, insurer investment decisions, or other features of capital markets are important contributors to rising premiums.

Studies that seem to demonstrate otherwise, upon further investigation, actually do not disprove the fact that growing claims costs drive increases in premiums, said the study.