Opinion ID: 1138293
Heading Depth: 1
Heading Rank: 9

Heading: Issue 8: The admission of testimony concerning loss ratios.

Text: Independent Life maintains that the expert's opinion on loss ratios should not have been admitted because, it says, the ratios had no relationship to the facts in this case. It contends that because the court failed to rule as a matter of law that Casey's policy was not a Medicare supplement policy, the court erroneously admitted irrelevant testimony of the loss ratios required by Medicare supplement policies. However, as discussed in regard to Issue 4, because the expert testimony given at trial was in sharp dispute as to whether Casey's policy was in fact a Medicare supplement policy, the trial court correctly submitted this issue to the jury. Hanners v. Balfour Guthrie, Inc., 564 So.2d 412. Further, Regulation 71 of the Alabama Insurance Department Regulations requires that Medicare supplement policies maintain a loss ratio of 65 percent. That is, for every dollar the insurer collects in premiums, it has to pay out 65 cents in benefits. Thus, this loss ratio would be especially relevant if the policy was found to be a Medicare supplement policy. We note that in National States Insurance Co. v. Jones, 393 So.2d 1361 (Ala.1980), this Court affirmed the trial court's admission of evidence regarding loss ratios, holding that that evidence was relevant to the issue of fraud.