Law | Open Access Articles | Digital Commons Network™

18th Annual Conference On Legal Issues For Financial Institutions, Debra K. Stamper, Arthur L. Freeman, Phillip H. Schwartz, Martha Andes Ziskind, Jessica R. Schumacher, Grace M. Giesel, John T. Mcgarvey, Holli Hart Targan, Lea Pauley Goff, Julie Mix Mcpeak, David L. Beckman, M. Thurman Senn, Thomas J. Luber, Walter R. Byrne, Caryn F. Price, R. James Straus

Grace M. Giesel

Materials from the 18th Annual Conference on Legal Issues for Financial Institutions held by UK/CLE in 1998.

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Dual Regulation Of Insurance, Christopher French

Christopher C. French

Since this country was created, the insurance industry has been principally

regulated by the states with infrequent Congressional interventions.

As the insurance industry has evolved in recent decades, however, individual

states have become unable to adequately regulate some insurers, such

as multinational insurers and foreign insurers, because they lack jurisdiction

over such entities. Simply having the federal government assume responsibility

for regulating insurers will not solve the current regulatory

problems, however, because Congress’ past forays into regulating certain

areas of insurance generally have yielded poor results. Consequently, this

Article makes the novel proposal and argument that, with the creation of …

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English Justice For An American Company?, Christopher French

Christopher C. French

This Essay addresses the Halliburton Co. v. Chubb Bermuda Insurance Ltd. case, which is pending before England's Supreme Court. The issue before the Court is whether it is appropriate for the "neutral" arbitrator, who has a history of serving as a party-appointed arbitrator for Chubb, to serve as the "neutral" arbitrator in the matter while simultaneously serving as a party-appointed arbitrator for Chubb in another related arbitration proceeding involving the same insurance policy form and the same underlying Deepwater Horizon incident. The lower courts declined to remove the arbitrator. The Essay also addresses the question of whether London arbitration proceedings …

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Insuring Against Cyber Risk: The Evolution Of An Industry (Introduction), Christopher French

Christopher C. French

Cyber risks are the newest risks of the 21st century. The breadth and cost of cyber attacks are astonishing. Worldwide damages caused by cyber attack are predicted to reach $6 trillion by 2021. Between 2015 and 2017, ransomware damages alone increased from $325 million to approximately $5 billion. In 2017, WannaCry ransomware shut down over 300,000 computer systems across 150 countries.

On April 13, 2018, the Penn State Law Review held a symposium to discuss the evolution of cyber risks and cyber insurance. The symposium was comprised of an eclectic group of legal practitioners and scholars who presented four articles. …

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Hurricanes, Fraud, And Insurance: The Supreme Court Weighs In On, But Does Not Wade Into, The Concurrent Causation Conundrum In State Farm Fire And Casualty Company V. Rigsby, Chris French

Christopher C. French

In the December 6, 2016 Supreme Court decision, State Farm v. Rigsby, a homeowner’s house was damaged by Hurricane Katrina. The homeowner had homeowners insurance with State Farm and a flood insurance policy that was administered by State Farm on behalf of the federal government. The claims adjusters assigned by State Farm to handle the homeowner’s claim allegedly were instructed by State Farm to misclassify wind damage as flood damage in order to shift State Farm’s own liability for the loss to the federal government. The claims handlers filed a lawsuit against State Farm under the False Claims Act (FCA), …

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Fiduciary-Isms: A Study Of Academic Influence On The Expansion Of The Law, Daniel B. Yeager

Daniel B. Yeager

Fiduciary law aspires to nullify power imbalances by obligating strong parties to give themselves over to servient parties. For example, due to profound imbalances of legal know-how, lawyers must as fiduciaries pursue their clients’ interests, not their own, lest clients get lost in the competitive shuffle. As a peculiar hybrid of status and contract relations, politics and law, compassion and capitalism, fiduciary law is very much in vogue in academic circles. As vogue as it is, there remains room for my “Fiduciary-isms...”, a meditation on the expansion of fiduciary law from its origins in the law of trusts through partnerships, …

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Insuring Takings Claims, Christopher Serkin

Christopher Serkin

Local governments typically insure themselves against all kinds of losses, from property damage to legal liability. For small- and medium-sized governments, this usually means purchasing insurance from private insurers or participating in municipal risk pools. Insurance for regulatory takings claims, however, is generally unavailable. This previously unnoticed gap in municipal insurance coverage could lead risk averse local governments to underregulate and underenforce existing regulations where property owners threaten to bring takings claims. This seemingly technical observation turns out to have profound implications for theoretical accounts of the Takings Clause that focus on government regulatory incentives. This Article explores the impact …

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Understanding Insurance Policies As Noncontracts: An Alternative Approach To Drafting And Construing These Unique Financial Instruments, Christopher French

Christopher C. French

Insurance policies commonly are understood to be a species of standardized contracts. This Article challenges that conventional wisdom and argues that insurance policies do not actually qualify as contracts under the doctrinal and theoretical bases of contract formation. It examines the process by which insurance policies are created and sold, and measures that process against the requirements for contract formation. This Article also distinguishes insurance policies from other types of standardized contracts, such as wrap agreements, which currently are the subject of much litigation and scholarly commentary. It then explores the doctrinal and theoretical bases underlying the specialized rules that …

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Insurance Policies: The Grandparents Of Contractual Black Holes, Christopher French

Christopher C. French

In their recent article, The Black Hole Problem in Commercial Boilerplate, Professors Stephen Choi, Mitu Gulati, and Robert Scott identify a phenomenon found in standardized contracts they describe as “contractual black holes.” The concept of black holes comes from theoretical physics. Under the original hypothesis, the gravitational pull of a black hole is so strong that once light or information is pulled past an event horizon into a black hole, it cannot escape. In recent years, the theory has been reformulated and now the hypothesis is that some information can escape, but it is so degraded that it is virtually …

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Regulators At The Margis: The Impact Of Malpractice Insurers On Solo And Small Firm Lawyers, Leslie C. Levin

Leslie Levin

Liability insurers often informally regulate the behavior of their insureds through the underwriting process, premium pricing, contract design, and risk management practices. This Article explores whether lawyer professional liability (“LPL”) insurers effectively regulate the behavior of solo and small firm lawyers in ways that encourage responsible conduct. The Article draws on interviews of insurance industry executives, risk management counsel, and insured lawyers, as well as insurer documents and surveys of lawyers, to explore the impact of LPL insurers on the work lives of solo and small firm lawyers. The research reveals that LPL insurers appear to regulate the behavior of …

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Sex, Videos, And Insurance: How Gawker Could Have Avoided Financial Responsibility For The $140 Million Hulk Hogan Sex Tape Verdict, Christopher French

Christopher C. French

On March 18, 2016, and March 22, 2016, a jury awarded Terry Bollea (a.k.a Hulk Hogan) a total of $140 million in compensatory and punitive damages against Gawker Media for posting less than two minutes of a video of Hulk Hogan having sex with his best friend’s wife. The award was based upon a finding that Gawker intentionally had invaded Hulk Hogan’s privacy by posting the video online. The case has been receiving extensive media coverage because it is a tawdry tale involving a celebrity, betrayal, adultery, sex, and the First Amendment. The case likely will be remembered by most …

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The Insurability Of Claims For Restitution, Christopher French

Christopher C. French

Does and should a wrongdoer’s liability insurance cover an aggrieved party’s claim for restitution (e.g., a claim for the disgorgement of ill-gotten gains)? This article answers those questions. It does so by first answering the question of whether claims for restitution are covered under the terms of liability insurance policies. Then, after concluding that they are, it addresses the question of whether claims for restitution should be insurable as a matter of public policy and insurance law theory. There are long-standing legal and equitable principles that, on the one hand, dictate that a wrongdoer should not be allowed to benefit …

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The Insurability Of Claims For Restitution, Christopher French

Christopher C. French

Does and should a wrongdoer’s liability insurance cover an aggrieved party’s claim for restitution (e.g., a claim for the disgorgement of ill-gotten gains)? This article answers those questions. It does so by first answering the question of whether claims for restitution are covered under the terms of liability insurance policies. Then, after concluding that they are, it addresses the question of whether claims for restitution should be insurable as a matter of public policy and insurance law theory. There are long-standing legal and equitable principles that, on the one hand, dictate that a wrongdoer should not be allowed to benefit …

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Competition And Regulation In The Insurance Sector: Reassessing The Mccarran-Ferguson Act, Susan Beth Farmer

Susan Beth Farmer

This article was presented at a symposium entitled “Public and Private: Are the Boundaries in Transition?” sponsored by the American Antitrust Institute on June 24, 2010. It proposes a different paradigm, which more precisely describes regulation and competition in the insurance sector. This relationship is the shifting boundary between state and federal regulation instead of a boundary between the public and private sectors. The McCarran-Ferguson Act was adopted to protect firms acting in the business of insurance from federal antitrust scrutiny, but its language and impact goes far beyond federal competition law. So broad is the exemption that the modern …

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A Battlefield Map For Nfl V. Insurance Industry Re: Concussion Liabilities, Christopher French

Christopher C. French

When the superstar athlete -“Iron Mike” Webster - a 9-time National Football League (NFL) Pro Bowler, 4-time Super Bowl Champion, Hall of Fame center for the Pittsburgh Steelers died at age 50 with severe brain dysfunction after becoming homeless and living in a truck, it was discovered he had a previously nameless disease, Chronic Traumatic Encephalopathy (CTE). The discovery of CTE opened the floodgates on interest in delayed manifestation brain diseases caused by repeated blows to the head. As part of that flood, numerous class actions were brought by retired NFL football players against the NFL for their alleged …

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Revisiting Construction Defects As “Occurrences” Under Cgl Insurance Policies, Christopher French

Christopher C. French

Imagine a situation in which a homeowner hires a contractor to redo a bathroom, for example, and the work is done incompetently such that the plumbing leaks and causes damage to other parts of the house. If the homeowner sues the contractor to recover the costs of repairing the faulty workmanship and the damage caused by the faulty workmanship, has there been an “occurrence” that is covered by the contractor’s Commercial General Liability (“CGL”) insurance policy? This article provides an answer to that question.

The issue of whether construction defects are occurrences under CGL insurance policies has been litigated frequently …

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Insuring Landslides: America’S Uninsured Natural Catastrophes, Christopher French

Christopher C. French

Landslides occur in all fifty states and cause approximately $3.5 billion in property damage annually. Yet, in America, “all risk” homeowners and commercial property insurance policies exclude coverage for landslides, and there is only limited availability of expensive, stand-alone “named peril” insurance policies that cover landslide losses. Consequently, the affected homeowners are often left financially devastated—homeless with a mortgage to pay on an unsaleable piece of property.

This Article analyzes the problem of insuring landslide losses in America and proposes ways to help solve it. It describes both historical and recent landslide events. It discusses the insurance industry’s response to …

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Insurance Issues Related To Lateral Hire Musical Chairs, Susan Saab Fortney

Susan S. Fortney

This article addresses the various insurance issues relating to lawyer mobility. Part I of this article introduces the topic by noting the heightened rate of lawyers making lateral moves and how insurance coverage has responded to an increasingly mobile legal labor force. Part II provides a brief historical perspective on insurer reaction to lateral hire claims. Part III analyzes specific policy provisions related to lateral hires for both the prior firm and the new firm. Part IV discusses how a firm and a lateral lawyer should study and address risks before consummating the move. Part V examines the problems related …

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Insuring Floods: The Most Common And Devastating Natural Catastrophies In America, Christopher French

Christopher C. French

Flooding is the most common natural catastrophe Americans face, accounting for 90% of all damage caused by natural catastrophes. Hurricanes Katrina and Sandy, for example, collectively caused over $160 billion in damage, but only approximately 10% of the Hurricane Katrina victims and 50% of the Hurricane Sandy victims had insurance to cover their flood losses. Consequently, both their homes and lives were left in ruins in the wake of the storms. Nationwide, only approximately 7% of homeowners have insurance that covers flood losses even though the risk of flooding is only increasing as coastal areas continue to be developed and …

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Information & Equilibrium In Insurance Markets With Big Data, Peter Siegelman

Peter Siegelman

The presence of asymmetric information makes the behavior of insurance markets very difficult to predict. But I argue that the increasing use of Big Data by insurers will not result in forecasts of loss that are so accurate that they eliminate uncertainty, and with it, the possibility of insurance. Big Data techniques might lead to a “flip” in informational asymmetry, resulting in a situation in which insurers know more about their customers than the latter know about themselves. But the effects of such a development could actually be benign. Finally, the article considers the potential for Big (or at least, …

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Insurance Agents In The Twenty-First Century: The Problem Of Biased Advice, Daniel Schwarcz, Peter Siegelman

Peter Siegelman

No abstract provided.

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The Uneasy Case For Food Safety Liability Insurance, John Aloysius Cogan Jr.

John Aloysius Cogan Jr.

Foodborne illnesses sicken millions and kill thousands of Americans every year. Our dysfunctional government food safety system appears incapable of protecting us, leading some to look to the private market for solutions to our food safety crisis. One private market approach, food safety liability insurance, is gaining popularity. This Article questions the emerging view that liability insurance can supplement government regulation of food safety. This article takes a more comprehensive approach than previous scholarship by systematically addressing the shortcomings of liability insurance as a regulator of food safety from three distinct perspectives: (1) an economics of information framework, (2) an …

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Insurance Coverage For Elite Student-Athletes, Jill W. Lens, Joshua Lens

Jill Wieber Lens

College athletics is commonly referred to as “big business” for universities. But it’s also big business for elite student-athletes, meaning those who are talented enough to later become professional athletes. What happens if they get injured while still in college? An injury could cost an elite student-athlete millions of dollars, in the form of lost expected future income from playing professional sports. More and more elite student-athletes are looking to insurance to help with this risk.

This Article explores the types of insurance available for elite-student athletes, mainly total disability and loss-of-value insurance. The Article is the first to focus …

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Insurance Law & Economics, Daniel Schwarcz, Peter Siegelman

Peter Siegelman

No abstract provided.

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The Role Of The Profit Imperative In Risk Management, Christopher French

Christopher C. French

Risks in the world abound. Every day there is a chance that each of us could be in a car accident. Or, one of us could be the victim of a tornado, flood or earthquake. Every day someone becomes deathly ill from an insidious disease. Our properties are in constant peril—one’s house could catch fire at any time or a tree could fall on it during a storm. Any one of these events could have devastating financial consequences, and they are just a few of the many risks that impact our daily lives. One of the principal ways we manage …

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Regulating The Business Of Insurance: Federalism In An Age Of Difficult Risk, Robert Jerry, Steven Roberts

Robert H. Jerry II

Although the United States has not established a much-needed and increasingly discussed national catastrophe policy, most significant points in current risk management strategies involve significant federal coordination and control. The authors suggest that a regulatory model that defers to the states with respect to the regulation of the insurance aspects of difficult risks is no longer viable, and an enhanced federal role in insurance regulation specifically -- and in risk management more generally -- is both necessary and appropriate with respect to difficult risks.

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Insurance, Terrorism, And 9/11: Reflections On Three Threshold Questions, Robert H. Jerry Ii

Robert H. Jerry II

For most of us, the collapse of the World Trade Center towers exists at the outermost edge of human comprehension. Even after one visits Ground Zero, the events of 9/11 retain a surreal quality, invoking feelings beyond words as one tries to contemplate losses immeasurable with numbers. Indeed, the insurance losses are insignificant when compared to the human tragedies caused by the terrorist attacks -- and in insurance terms, we witnessed the most costly, complex events to transpire in a single day in the history of the planet. Many years will pass before all the insurance ramifications of 9/11 are …

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Cybercoverage For Cyber-Risks: An Overview Of Insurers' Responses To The Perils Of E-Commerce, Robert H. Jerry Ii, Michele L. Mekel

Robert H. Jerry II

Insurers' responses to the risks inherent in e-commerce and the demand for coverage have been anything but uniform. Instead, the solutions are a patchwork of stop-gap measures and niche offerings, including: (1) exclusions to coverage; (2) modifications to existing policies in order to extend or to limit coverage; and (3) the creation of new policies that specifically target Internet-related liabilities and losses. These various measures have been applied in both the first- and third-party settings. This article presents an overview of some of the risks involved in the new "e-economy" and surveys how insurers are responding to these new risks.

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Making The Case For Contraception Over Religious Views, Alan E. Garfield

Alan E Garfield

No abstract provided.

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The Economics Of The Insurance Antitrust Suits: Toward An Exclusionary Theory, Ian Ayres, Peter Siegelman

Peter Siegelman

On March 22, 1988, the Attorneys General of eight states filed antitrust actions in state and federal courts alleging that major insurance and reinsurance companies colluded to boycott specific types of insurance coverage in violation of section 1 of the Sherman Act. The suits suggest that this collusion was responsible for the unprecedented increase in premiums and concomitant erosion of coverage that has come to be known as "the insurance crisis." The lawsuits have provoked fierce denials by insurance industry participants, including assertions that the suits, which came in an election year, were politically motivated. The litigation is certain to …

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Full-Text Articles in Law

Grace M. Giesel

Dual Regulation Of Insurance, Christopher French

Christopher C. French

English Justice For An American Company?, Christopher French

Christopher C. French

Insuring Against Cyber Risk: The Evolution Of An Industry (Introduction), Christopher French

Christopher C. French

Hurricanes, Fraud, And Insurance: The Supreme Court Weighs In On, But Does Not Wade Into, The Concurrent Causation Conundrum In State Farm Fire And Casualty Company V. Rigsby, Chris French

Christopher C. French

Fiduciary-Isms: A Study Of Academic Influence On The Expansion Of The Law, Daniel B. Yeager

Daniel B. Yeager

Insuring Takings Claims, Christopher Serkin

Christopher Serkin

Understanding Insurance Policies As Noncontracts: An Alternative Approach To Drafting And Construing These Unique Financial Instruments, Christopher French

Christopher C. French

Insurance Policies: The Grandparents Of Contractual Black Holes, Christopher French

Christopher C. French

Regulators At The Margis: The Impact Of Malpractice Insurers On Solo And Small Firm Lawyers, Leslie C. Levin

Leslie Levin

Sex, Videos, And Insurance: How Gawker Could Have Avoided Financial Responsibility For The $140 Million Hulk Hogan Sex Tape Verdict, Christopher French

Christopher C. French

The Insurability Of Claims For Restitution, Christopher French

Christopher C. French

The Insurability Of Claims For Restitution, Christopher French

Christopher C. French

Competition And Regulation In The Insurance Sector: Reassessing The Mccarran-Ferguson Act, Susan Beth Farmer

Susan Beth Farmer

A Battlefield Map For Nfl V. Insurance Industry Re: Concussion Liabilities, Christopher French

Christopher C. French

Revisiting Construction Defects As “Occurrences” Under Cgl Insurance Policies, Christopher French

Christopher C. French

Insuring Landslides: America’S Uninsured Natural Catastrophes, Christopher French

Christopher C. French

Insurance Issues Related To Lateral Hire Musical Chairs, Susan Saab Fortney

Susan S. Fortney

Insuring Floods: The Most Common And Devastating Natural Catastrophies In America, Christopher French

Christopher C. French

Information & Equilibrium In Insurance Markets With Big Data, Peter Siegelman

Peter Siegelman

Insurance Agents In The Twenty-First Century: The Problem Of Biased Advice, Daniel Schwarcz, Peter Siegelman

Peter Siegelman

The Uneasy Case For Food Safety Liability Insurance, John Aloysius Cogan Jr.

John Aloysius Cogan Jr.

Insurance Coverage For Elite Student-Athletes, Jill W. Lens, Joshua Lens

Jill Wieber Lens

Insurance Law & Economics, Daniel Schwarcz, Peter Siegelman

Peter Siegelman

The Role Of The Profit Imperative In Risk Management, Christopher French

Christopher C. French

Regulating The Business Of Insurance: Federalism In An Age Of Difficult Risk, Robert Jerry, Steven Roberts

Robert H. Jerry II

Insurance, Terrorism, And 9/11: Reflections On Three Threshold Questions, Robert H. Jerry Ii

Robert H. Jerry II

Cybercoverage For Cyber-Risks: An Overview Of Insurers' Responses To The Perils Of E-Commerce, Robert H. Jerry Ii, Michele L. Mekel

Robert H. Jerry II

Making The Case For Contraception Over Religious Views, Alan E. Garfield

Alan E Garfield

The Economics Of The Insurance Antitrust Suits: Toward An Exclusionary Theory, Ian Ayres, Peter Siegelman

Peter Siegelman