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Full-Text Articles in Insurance

How Liability Insurers Protect Patients And Improve Safety, Tom Baker, Charles Silver Jan 2019

How Liability Insurers Protect Patients And Improve Safety, Tom Baker, Charles Silver

Faculty Scholarship at Penn Law

Forty years after the publication of the first systematic study of adverse medical events, there is greater access to information about adverse medical events and increasingly widespread acceptance of the view that patient safety requires more than vigilance by well-intentioned medical professionals. In this essay, we describe some of the ways that medical liability insurance organizations contributed to this transformation, and we catalog the roles that those organizations play in promoting patient safety today. Whether liability insurance in fact discourages providers from improving safety or encourages them to protect patients from avoidable harms is an empirical question that a survey ...


Mutually Assured Protection Among Large U.S. Law Firms, Tom Baker, Rick Swedloff Jan 2017

Mutually Assured Protection Among Large U.S. Law Firms, Tom Baker, Rick Swedloff

Faculty Scholarship at Penn Law

Top law firms are notoriously competitive, fighting for prime clients and matters. But some of the most elite firms are also deeply cooperative, willingly sharing key details about their finances and strategy with their rivals. More surprisingly, they pay handsomely to do so. Nearly half of the AmLaw 100 and 200 belong to mutual insurance organizations that require member firms to provide capital; partner time; and important information about their governance, balance sheets, risk management, strategic plans, and malpractice liability. To answer why these firms do so when there are commercial insurers willing to provide coverage with fewer burdens, we ...


Medicare Secondary Payer And Settlement Delay, Eric Helland, Jonathan Klick Jul 2015

Medicare Secondary Payer And Settlement Delay, Eric Helland, Jonathan Klick

Faculty Scholarship at Penn Law

The Medicare Secondary Payer Act of 1980 and its subsequent amendments require that insurers and self-insured companies report settlements, awards, and judgments that involve a Medicare beneficiary to the Centers for Medicare and Medicaid Services. The parties then may be required to compensate CMS for its conditional payments. In a simple settlement model, this makes settlement less likely. Also, the reporting delays and uncertainty regarding the size of these conditional payments are likely to further frustrate the settlement process. We provide results, using data from a large insurer, showing that, on average, implementation of the MSP reporting amendments led to ...


Can Consumers Make Affordable Care Affordable? The Value Of Choice Architecture, Eric J. Johnson, Ran Hassin, Tom Baker, Allison T. Bajger, Galen Treuer Jul 2013

Can Consumers Make Affordable Care Affordable? The Value Of Choice Architecture, Eric J. Johnson, Ran Hassin, Tom Baker, Allison T. Bajger, Galen Treuer

Faculty Scholarship at Penn Law

Starting this October, tens of millions will be choosing health coverage on a state or federal health insurance exchange as part of the Patient Protection and Affordable Care Act. We examine how well people make these choices, how well they think they do, and what can be done to improve these choices. We conducted 6 experiments asking people to choose the most cost-effective policy using websites modeled on current exchanges. Our results suggest there is significant room for improvement. Without interventions, respondents perform at near chance levels and show a significant bias, overweighting out-of-pocket expenses and deductibles. Financial incentives do ...


Behavioral Economics And Insurance Law: The Importance Of Equilibrium Analysis, Tom Baker, Peter Siegelman May 2013

Behavioral Economics And Insurance Law: The Importance Of Equilibrium Analysis, Tom Baker, Peter Siegelman

Faculty Scholarship at Penn Law

Because choosing insurance requires consumers to assess risks and probabilities, the demand for insurance has proven to be fertile ground for identifying deviations from rational behavior. Consumers often shun the insurance against large losses that they rationally should want (e.g., floods); and they are attracted to insurance against small losses (extended warranties, low deductibles) that no rational individual should purchase. But the welfare consequences of behavioral anomalies in insurance are complex, because consumers’ irrational behavior takes place in a market profoundly shaped by informational asymmetries. Under some conditions, deviations from rational behavior may actually generate insurance market equilibria that ...


The Law And Economics Of Liability Insurance: A Theoretical And Empirical Review, Tom Baker, Peter Siegelman Nov 2011

The Law And Economics Of Liability Insurance: A Theoretical And Empirical Review, Tom Baker, Peter Siegelman

Faculty Scholarship at Penn Law

We survey the theoretical and empirical literature on the law and economics of liability insurance. The canonical Shavell model predicts that, despite the presence of some ex ante moral hazard (care-reduction by insureds), liability insurance will generally raise welfare because its risk-spreading gains will likely be larger than its adverse effects on precautionary activities. We discuss the numerous features of liability insurance contracts that are designed to reduce ex ante moral hazard, and examine the evidence of their effects. Most studies conclude that these features work reasonably well, so that liability insurance probably does not generate substantial ex ante moral ...


The Shifting Terrain Of Risk And Uncertainty On The Liability Insurance Field, Tom Baker Feb 2011

The Shifting Terrain Of Risk And Uncertainty On The Liability Insurance Field, Tom Baker

Faculty Scholarship at Penn Law

Recent sociological and historical work suggests that insurance risks often are not reliably calculable, except in hindsight. Insurance is “an uncertain business,” characterized by competition for premiums that pushes insurers into the unknown. This essay takes some preliminary steps that extend this insight into the liability insurance field. The essay first provides a simple quantitative comparison of U.S. property and liability insurance premiums over the last sixty years, setting the stage to make three points: (1) liability insurance premiums have grown at a similar rate as property insurance premiums and GDP over this period, providing yet another piece of ...


Health Insurance, Risk, And Responsibility After The Patient Protection And Affordable Care Act, Tom Baker Feb 2011

Health Insurance, Risk, And Responsibility After The Patient Protection And Affordable Care Act, Tom Baker

Faculty Scholarship at Penn Law

This essay explores the new social contract of healthcare solidarity through private ownership, markets, choice, and individual responsibility embodied in the Patient Protection and Affordable Care Act. This essay first explains the four main health care risk distribution institutions affected by the Act – Medicare, Medicaid, the individual and small employer market, and the large group market – with an emphasis on how the Act changes those institutions and how they are financed. The essay then describes the “fair share” approach to health care financing embodied in the Act. This approach largely rejects the actuarial fairness vision of what constitutes a fair ...


A New Deal In A World Of Old Ones, Theodore Ruger Jan 2011

A New Deal In A World Of Old Ones, Theodore Ruger

Faculty Scholarship at Penn Law

No abstract provided.


Insurance In Sociolegal Research, Tom Baker May 2010

Insurance In Sociolegal Research, Tom Baker

Faculty Scholarship at Penn Law

Insurance has a long history in sociolegal research, most prominently as a window on accident compensation and related tort law in action. Recent work has extended that research, with the result that tort law in action may be the best mapped of any legal field outside criminal law. Sociological research has begun to explore insurance as a form of governance, with effects in many legal fields and across the economy. This essay reviews developments in both bodies of work. Part one examines the relationship between liability insurance and tort law in action using the metaphors of window and frame. Part ...


Tontines For The Invincibles: Enticing Low Risks Into The Health-Insurance Pool With An Idea From Insurance History And Behavioral Economics, Tom Baker, Peter Siegelman Jan 2010

Tontines For The Invincibles: Enticing Low Risks Into The Health-Insurance Pool With An Idea From Insurance History And Behavioral Economics, Tom Baker, Peter Siegelman

Faculty Scholarship at Penn Law

Over one third of the uninsured adults in the U.S. below retirement age are between 19 and 29 years old. Young adults, especially men, often go without insurance, even when buying it is mandatory and sometimes even when it is a low cost employment benefit. This paper proposes a new form of health insurance targeted at this group—the “Young Invincibles”—those who (wrongly) believe that they don’t need health insurance because they won’t get sick. Our proposal offers a cash bonus to those who turn out to be right in their belief that they did not ...


The Relation Between Regulation And Class Actions: Evidence From The Insurance Industry, Eric Helland, Jonathan Klick Mar 2009

The Relation Between Regulation And Class Actions: Evidence From The Insurance Industry, Eric Helland, Jonathan Klick

Faculty Scholarship at Penn Law

Standard law and economics models imply that regulation and litigation serve as substitutes. We test this by looking at the incidence of insurance class actions as a function of measures of regulatory enforcement. We also look specifically at whether states with clear regulatory standards regarding the use of OEM parts experience less litigation over this issue. We find no evidence of substitution between regulation and litigation. We also examine the possibility that litigation is more frequent in states where regulators are more likely to be captured by industry interests, finding no support for this hypothesis either. Instead, litigation is more ...


Transparency Through Insurance: Mandates Dominate Discretion, Tom Baker Apr 2008

Transparency Through Insurance: Mandates Dominate Discretion, Tom Baker

Faculty Scholarship at Penn Law

This chapter describes how liability insurance has contributed to the transparency of the civil justice system. The chapter makes three main points. First, much of what we know about the empirics of the civil justice system comes from access to liability insurance data and personnel. Second, as long as access to liability insurance data and personnel depends on the discretion of liability insurance organizations, this knowledge will be incomplete and, most likely, biased in favor of the public policy agenda of the organizations providing discretionary access to the data. Third, although mandatory disclosure of liability insurance data would improve transparency ...


Embracing Risk, Sharing Responsibility, Tom Baker Jan 2008

Embracing Risk, Sharing Responsibility, Tom Baker

Faculty Scholarship at Penn Law

No abstract provided.


Predicting Corporate Governance Risk: Evidence From The Directors' & Officers' Liability Insurance Market, Tom Baker, Sean J. Griffith Jan 2007

Predicting Corporate Governance Risk: Evidence From The Directors' & Officers' Liability Insurance Market, Tom Baker, Sean J. Griffith

Faculty Scholarship at Penn Law

No abstract provided.


Insuring Liability Risks, Tom Baker Jan 2004

Insuring Liability Risks, Tom Baker

Faculty Scholarship at Penn Law

Recent dramatic increases in prices for medical liability insurance, directors and officers insurance, and other lines of commercial liability insurance, together with the exit of some insurers from those lines of business, has placed liability insurance on the public agenda. At the same time, asbestos and environmental losses continue to mount under general liability insurance policies sold long ago, when no one could have predicted the extent or cost of such losses. In combination, these and other related events have raised serious concerns about the insurability of liability risks and have prompted calls for dramatic efforts to roll back the ...


The Virtues Of Uncertainty In Law: An Experimental Approach, Tom Baker, Alon Harel, Tamar Kugler Jan 2004

The Virtues Of Uncertainty In Law: An Experimental Approach, Tom Baker, Alon Harel, Tamar Kugler

Faculty Scholarship at Penn Law

No abstract provided.


Teaching Real Torts: Using Barry Werth's Damages In The Law School Classroom, Tom Baker Jul 2002

Teaching Real Torts: Using Barry Werth's Damages In The Law School Classroom, Tom Baker

Faculty Scholarship at Penn Law

No abstract provided.


Reconsidering Insurance For Punitive Damages, Tom Baker Jan 1998

Reconsidering Insurance For Punitive Damages, Tom Baker

Faculty Scholarship at Penn Law

No abstract provided.


An Inquiry Into The Efficiency Of The Limited Liability Company: Of Theory Of The Firm And Regulatory Competition, William W. Bratton, Joseph A. Mccahery Jan 1997

An Inquiry Into The Efficiency Of The Limited Liability Company: Of Theory Of The Firm And Regulatory Competition, William W. Bratton, Joseph A. Mccahery

Faculty Scholarship at Penn Law

No abstract provided.


Conflicts And Defense Lawyers: From Triangles To Tetrahedrons, Tom Baker Jan 1997

Conflicts And Defense Lawyers: From Triangles To Tetrahedrons, Tom Baker

Faculty Scholarship at Penn Law

No abstract provided.


On The Genealogy Of Moral Hazard, Tom Baker Jan 1996

On The Genealogy Of Moral Hazard, Tom Baker

Faculty Scholarship at Penn Law

No abstract provided.


Is Equal Access The Prescription For Equity?, Dorothy E. Roberts Jan 1995

Is Equal Access The Prescription For Equity?, Dorothy E. Roberts

Faculty Scholarship at Penn Law

No abstract provided.


Developments In Law - Toxic Waste Litigation, Howard F. Chang Jan 1986

Developments In Law - Toxic Waste Litigation, Howard F. Chang

Faculty Scholarship at Penn Law

No abstract provided.


The Insurance Classification Controversy, Regina Austin Jan 1983

The Insurance Classification Controversy, Regina Austin

Faculty Scholarship at Penn Law

No abstract provided.