New York Governor David A. Paterson has signed a one-year medical malpractice insurance rate freeze into law in a move aimed at giving the state time to develop a longer-term solution for escalating rates.

Physicians would have seen up to 30 percent increases without the legislation, the governor's office said in a statement.

Gov. Paterson signed the freeze measure Friday as part of the budget package, the governor's statement noted. The Legislature reached an agreement on the legislation during a special session last Tuesday.

The legislation will freeze medical malpractice premium rates for physicians and suspend an anticipated surcharge until June 30, 2009.

Gov. Paterson said the rate freeze will hold premiums stable while a broader plan is developed to control medical malpractice rates. He added that the state is hopeful longer-term reforms can be completed during the next legislative session.

The New York Legislature by stabilizing malpractice rates for the short term ensures that doctors "can continue to provide quality care in New York without getting suffocated by more back-breaking fiscal burdens," said Gov. Paterson.

But he noted, "Our work is now cut out for us, and we remain committed to creating comprehensive and meaningful medical malpractice reform."

The Medical Society of the State of New York hailed the rate freeze. MSSNY President Dr. Michael Rosenberg said in a statement that action by Gov. Paterson and the Legislature "has allowed us to avoid what could otherwise have been an extremely serious situation."

Insurance Superintendent Eric Dinallo said: "While comprehensive reform has not yet been achieved, much groundwork is being laid. We will continue to work with the Legislature, the medical community and the lawyers to achieve meaningful reform to reduce costs, reduce the number of people injured by malpractice, protect those who are injured, improve the financial health of the insurance companies, and create a competitive market for medical malpractice insurance."

Marc Craw, vice president of the New York Insurance Association (NYIA), said that, in general, NYIA believes the rate freeze gives "breathing space" to all medical malpractice stakeholders to develop a long-term, permanent solution. He noted that NYIA is not involved in the medical malpractice discussions but said that he believes any solution needs to involve tort reform measures.

Brianne Mallaghan, spokesperson for the American Insurance Association (AIA), offered the following statement on behalf of the association, "Rate freedom is essential, and legislatively setting rates sets a bad precedent. AIA philosophically believes in letting free market forces work." She added that AIA supports market set rates, and called the legislative activity "a bad idea."