Law Commons^™

Insurer Moral Hazard In The Workers' Compensation Crisis: Reforming Cost Inflation, Not Rate Suppression, Martha T. Mccluskey

Journal Articles

This article challenges the standard story of the insurance crisis that led to the near-collapse and major reform of a number of states’ workers’ compensation programs in the 1980s and 1990s.

In the prevailing account, insurance costs rose due to expanding costs of benefits for injured workers’, much of which was blamed on wasteful or abusive "moral hazard" by workers and their lawyers and doctors. Because state regulators had substantial power to control insurance rates, this account claims governments tried to suppress prices in the face of rising benefit costs in a misguided attempt to avoid political trade-offs between labor …

An Inconsistently Sensitive Mind: Richard Posner's Celebration Of Insurance Law And Continuing Blind Spots Of Econominalism, Jeffrey W. Stempel

Scholarly Works

Seventh Circuit Judge Richard Posner is well known for bringing economic analysis to bear on a host of issues, including infamously controversial notions such the market for baby sale. Not surprisingly, Posner's insurance law opinions reflect economics, but perhaps not to the degree one would expect. A review of Posner's 20 years of opinions relating to insurance issues reviews his pragmatic jurisprudence as well. Decisions frequently reflect not only economics but also situational context and considerations of business reality as well as a sophisticated grasp of basic insurance doctrine and contract law. As a general matter, Posner also displays considerably …