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In a dividend that reflects an improved financial picture, Illinois’s largest medical malpractice insurer is planning to reimburse $18.4 to policyholders for a more secure liability environment for doctors.

ISMIE Mutual Insurance Co. also says they will leave premium rates unchanged for the new policy year which starts on July 1. Premiums paid by doctors to ISMIE and other insurers spiked in 2002 to 2004, but in recent years the rate increases have eased up.

The insurer did not disclose their average dividend amount. They said a “typical credit” would be $453 for Chicago-area internists and $2,880 for neurosurgeons. (According to the Medical Liability Monitor Newsletter, ISMIEs average annual premium for internists in 2006 was $37,688.)

The dividend for ISMIE’s 2005-2006 policy year will be paid in four annual installments, starting with a $5.5 million disbursement this spring, ISMIE said. The payments will be credited toward doctors’ future premiums.

Dividends in future years will depend on how the insurer does financially.

ISMIE’s announcement follows its best financial year in two decades. Net profit was $50 million — second-highest in ISMIE’s 31-year history — while the number of claims filed fell 21.5%. But the average payout per claim rose 16% to $627,000, which Dr. Jensen called an “ominous continuing trend.”

Three or more suits have challenged the constitutionality of the caps that were filed in Cook County Circuit Court. A hearing on the main case, a family who claims their baby suffered brain damage from a botched deliver, is set for July.

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