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2015

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Insurance Law

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Full-Text Articles in Law

Encouraging Insurers To Regulate: The Role (If Any) For Tort Law, Kyle D. Logue Dec 2015

Encouraging Insurers To Regulate: The Role (If Any) For Tort Law, Kyle D. Logue

Articles

Insurance companies are financially responsible for a substantial portion of the losses associated with risky activities in the economy. The more insurers can lower the risks posed by their insureds, the more competitively they can price their policies, and the more customers they can attract. Thus, competition forces insurers to be private regulators of risk. To that end, insurers deploy a range of techniques to encourage their insureds to reduce the risks of their insured activities, from charging experience-rated premiums to discounting premium rates for insureds who make specific behavioral changes designed to reduce risk. Somewhat paradoxically, however, tort law …


Policyholder Rights To Independent Counsel: Issues Remain Regarding Compensation, Supervision Of Counsel, Jeffrey W. Stempel Dec 2015

Policyholder Rights To Independent Counsel: Issues Remain Regarding Compensation, Supervision Of Counsel, Jeffrey W. Stempel

Scholarly Works

More than 30 years ago, a California appellate court decision (San Diego Navy Federal Credit Union v. Cumis Insurance Society, 162 Cal. App. 3d 358 (4th Dist. 1984)) worked a revolution of sorts by ruling that, in cases of conflict between an insurer and a policyholder defending against a plaintiff's claim, the insurer was obligated to permit the policyholder to select its own defense counsel rather than having the case defended by an attorney selected by the insurer. The Cumis movement was more evolutionary than revolutionary in Nevada. Until State Farm Mutual Automobile Ins. Co. v. Hansen, …


Rodney Dangerfield No More: The American Law Institute's Coming Restatement Of The Law Of Liability Insurance, Jeffrey W. Stempel Dec 2015

Rodney Dangerfield No More: The American Law Institute's Coming Restatement Of The Law Of Liability Insurance, Jeffrey W. Stempel

Scholarly Works

In a casebook I co-author, "Principles of Insurance Law," with Peter Swisher and Erik Knutsen, we refer to insurance as "the Rodney Dangerfield of law." It just does not (to paraphrase the words of the late comedian), get enough respect. Lawyers are familiar with (and have been since perhaps the fourth week of law school), the American Law Institute's Restatements of the Law, particularly widely cited restatements, such as those governing torts and contracts (and, to a lesser extent, judgments, conflict of laws, restitution, suretyship and others). Despite the importance of insurance in the civil justice system, it has been …


The Unintended Effects Of Government-Subsidized Weather Insurance, Omri Ben-Shahar, Kyle D. Logue Oct 2015

The Unintended Effects Of Government-Subsidized Weather Insurance, Omri Ben-Shahar, Kyle D. Logue

Articles

Catastrophes from severe weather are perhaps the costliest accidents humanity faces. While we are still a long way from technologies that would abate the destructive force of storms, there is much we can do to reduce their effect. True, we cannot regulate the weather, but through smart governance and correct incentives we can influence human exposure to the risk of bad weather. We may not be able to control wind or storm surge, but we can prompt people to build sturdier homes with stronger roofs far from floodplains. We call these catastrophes "natural disasters," but they are the result of …


Three Words And The Future Of The Affordable Care Act, Nicholas Bagley Oct 2015

Three Words And The Future Of The Affordable Care Act, Nicholas Bagley

Articles

As an essential part of its effort to achieve near universal coverage, the Affordable Care Act (ACA) extends sizable tax credits to most people who buy insurance on the newly established health care exchanges. Yet several lawsuits have been filed challenging the availability of those tax credits in the thirty-four states that refused to set up their own exchanges. The lawsuits are premised on a strained interpretation of the ACA that, if accepted, would make a hash of other provisions of the statute and undermine its effort to extend coverage to the uninsured. The courts should reject this latest effort …


State Farm Mut. Auto. Ins. Co. V. Hansen, 131 Nev. Adv. Op. 74 (Sept. 24, 2015), Kristen Matteoni Sep 2015

State Farm Mut. Auto. Ins. Co. V. Hansen, 131 Nev. Adv. Op. 74 (Sept. 24, 2015), Kristen Matteoni

Nevada Supreme Court Summaries

Under Nevada law, an insurer is required to provide independent counsel of the insured choosing when a conflict of interest arises between the insured and the insurer. A reservation of rights fails to create a per se conflict of interest. Instead, the courts must analyze on a case-by-case basis whether an actual conflict exists. Only if an actual conflict exists, must an insurer be obligated to provide the insured with independent counsel.


After Tackett: Incomplete Contracts For Post-Employment Healthcare, Maria O'Brien Aug 2015

After Tackett: Incomplete Contracts For Post-Employment Healthcare, Maria O'Brien

Faculty Scholarship

This paper examines the recent U.S. Supreme Court retiree health care decision in Tackett v. M & G Polymers and focuses, in particular, on the ostensibly odd silence with respect to a critical contract term — whether the parties in fact agreed that these benefits were vested. Although the union in Tackett insisted these welfare benefits were clearly intended to vest and the employer now asserts they can be modified at any time, the collective bargaining agreement and supporting documents are ambiguous on this question. This paper examines how and why this “silence” persisted for so many decades and concludes …


Petition For A Writ Of Certiorari. Rochow V. Life Insurance Company Of North America, 136 S. Ct. 480 (2015) (No. 15-163), 2015 U.S. S. Ct. Briefs Lexis 2657, Eric Schnapper, Erik W. Scharf, John J. Cooper Aug 2015

Petition For A Writ Of Certiorari. Rochow V. Life Insurance Company Of North America, 136 S. Ct. 480 (2015) (No. 15-163), 2015 U.S. S. Ct. Briefs Lexis 2657, Eric Schnapper, Erik W. Scharf, John J. Cooper

Court Briefs

QUESTION PRESENTED When a benefit plan, in violation of ERISA, wrongfully denies or delays payment of a benefit, the court may award relief because of the improper delay in the payment of that benefit. The question presented is: Should 'the amount of a remedy based on the improper delay in the payment of a benefit be based on: (1) only the amount needed to redress the loss that the beneficiary sustained as a result of the wrongful delay (the rule in the Sixth Circuit), (2) either the amount needed to redress the loss that the beneficiary sustained as a result …


Medicare At Fifty Needs To Grow, William H. Lane Jul 2015

Medicare At Fifty Needs To Grow, William H. Lane

English Faculty Publications

In America everybody has a healthcare story. A bill impossible to read, an inscrutable "additional" charge, trouble getting insurance, trouble keeping it, a friend or family member who's fallen between the coverage "cracks." [excerpt]


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

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

All Faculty Scholarship

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 …


Inference Under Stability Of Risk Preferences, Levon Barseghyan, Francesca Molinari, Joshua C. Teitelbaum Jun 2015

Inference Under Stability Of Risk Preferences, Levon Barseghyan, Francesca Molinari, Joshua C. Teitelbaum

Georgetown Law Faculty Publications and Other Works

We leverage the assumption that preferences are stable across contexts to partially identify and conduct inference on the parameters of a structural model of risky choice. Working with data on households' deductible choices across three lines of insurance coverage and a model that nests expected utility theory plus a range of non-expected utility models, we perform a revealed preference analysis that yields household-specific bounds on the model parameters. We then impose stability and other structural assumptions to tighten the bounds, and we explore what we can learn about households' risk preferences from the intervals defined by the bounds. We further …


The Perverse Effects Of Subsidized Weather Insurance, Kyle D. Logue, Omri Ben-Shahar May 2015

The Perverse Effects Of Subsidized Weather Insurance, Kyle D. Logue, Omri Ben-Shahar

Law & Economics Working Papers

This Article explores the role of insurance as a substitute for direct regulation of risks posed by severe weather. In pricing the risk of human activity along the predicted path of storms, insurance can provide incentives for efficient location decisions as well as for cost-justified mitigation effort in building construction and infrastructure. Currently, however, much insurance for severe weather risks is provided and heavily subsidized by the government. The Article demonstrates two primary distortions arising from the government’s dominance in these insurance markets. First, the subsidies are allocated differentially across households, resulting in a significant regressive redistribution, favoring affluent homeowners …


No Good Options: Picking Up The Pieces After King V. Burwell, Nicholas Bagley, David K. Jones Apr 2015

No Good Options: Picking Up The Pieces After King V. Burwell, Nicholas Bagley, David K. Jones

Articles

If the Supreme Court rules against the government in King v. Burwell, insurance subsidies available under the Affordable Care Act (ACA) will evaporate in the thirty-four states that have refused to establish their own health-care exchanges. The pain could be felt within weeks. Without subsidies, an estimated eight or nine million people stand to lose their health coverage. Because sicker people will retain coverage at a much higher rate than healthier people, insurance premiums in the individual market will surge by as much as fifty percent. Policymakers will come under intense pressure to mitigate the fallout from a government loss …


Real Arrow-Securities For All: Just And Efficient Insurance Through Macro-Hedging, Robert C. Hockett Apr 2015

Real Arrow-Securities For All: Just And Efficient Insurance Through Macro-Hedging, Robert C. Hockett

Cornell Law Faculty Publications

As a new hurricane season opened in June of 2006, it emerged that a number of online gaming sites were offering bettors the opportunity to wager on whether New Orleans might suffer another Katrina calamity. Commentators condemned the announced practice with howls of disgust, labeling it both tasteless and heartless. Perhaps they were right. All I could think about as one who grew up in New Orleans, however, was how risk pools might hereby be broadened to include all the world’s bettors. We shouldn’t condemn these people; we should use them—while requiring that they maintain margin accounts at their betting …


Insuring Floods: The Most Common And Devastating Natural Catastrophes In America, Christopher French Mar 2015

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

Journal Articles

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 …


Predicting The Fallout From King V. Burwell - Exchanges And The Aca, Nicholas Bagley, David K. Jones, Timothy Stoltzfus Jost Jan 2015

Predicting The Fallout From King V. Burwell - Exchanges And The Aca, Nicholas Bagley, David K. Jones, Timothy Stoltzfus Jost

Articles

The U.S. Supreme Court's surprise announcement on November 7 that it would hear King v. Burwell struck fear in the hearts of supporters of the Affordable Cara Act (ACA). At stake is the legality of an Internal Revenue Service (IRS) rule extending tax credits to the 4.5 million people who bought their health plans in the 34 states that declined to establish their own health insurance exchanges under the ACA. The case hinges on enigmatic statutory language that seems to link the amount of tax credits to a health plan purchased "through an Exchange established by the State." According to …


Information & Equilibrium In Insurance Markets With Big Data, Peter Siegelman Jan 2015

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

Faculty Articles and Papers

Asymmetric information makes the behavior of insurance markets very difficult to predict. But this Article argues 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, More) Data …


Big Storms, Big Debt, And Biggert-Waters: Navigating Florida's Uncertain Flood Insurance Future, Loren M. Vazquez Jan 2015

Big Storms, Big Debt, And Biggert-Waters: Navigating Florida's Uncertain Flood Insurance Future, Loren M. Vazquez

Student Works

The National Flood Insurance Program (NFIP) began with good intentions. It was first enacted for the purpose of making flood insurance reasonably affordable while protecting against losses after disasters. However,

Congress failed to accurately update the program in the face of climate change and new coastal development. Because of this oversight, the overall risk associated with the program outgrew the collection of premiums, which led to an enormous debt to be incurred by the federal government. Once changes did finally come, they led to massive increases in insurance rates and a massive public outrage. Residents of states like Florida faced …


In Deep: Dilemmas Of Federal Flood Insurance Reform, Jennifer Wriggins Jan 2015

In Deep: Dilemmas Of Federal Flood Insurance Reform, Jennifer Wriggins

Faculty Publications

Floods are the most expensive form of natural disaster in the United States. Recent massive floods in Louisiana show the magnitude of the devastation floods can cause. Climate change and population growth are likely to lead in the coming decades to more severe, frequent, and costly floods. How we pay for flood losses is an urgent public policy issue. The National Flood Insurance Program (NFIP) provides most of the flood insurance policies on homes in the United States. The U.S. Flood Insurance Program is a complex scheme that uses insurance coverage subsidies, mandates, and other tools to support various policies …


Safeguarding State Interests In Health Insurance Exchange Establishment, Christine M. Monahan Jan 2015

Safeguarding State Interests In Health Insurance Exchange Establishment, Christine M. Monahan

Connecticut Insurance Law Journal

No abstract provided.


Erie Denied: How Federal Courts Decide Insurance Coverage Cases Differently And What To Do About It, John L. Watkins Jan 2015

Erie Denied: How Federal Courts Decide Insurance Coverage Cases Differently And What To Do About It, John L. Watkins

Connecticut Insurance Law Journal

No abstract provided.


America’S Growing Problem: How The Patient Protection And Affordable Care Act Failed To Go Far Enough In Addressing The Obesity Epidemic, Ashley A. Noel Jan 2015

America’S Growing Problem: How The Patient Protection And Affordable Care Act Failed To Go Far Enough In Addressing The Obesity Epidemic, Ashley A. Noel

Connecticut Insurance Law Journal

No abstract provided.


Even I Can’T Cover Me: Examining The Ncaa’S Effective Prohibition On “Loss Of Value” Insurance For Its Student-Athletes, Michael D. Randall Jan 2015

Even I Can’T Cover Me: Examining The Ncaa’S Effective Prohibition On “Loss Of Value” Insurance For Its Student-Athletes, Michael D. Randall

Connecticut Insurance Law Journal

No abstract provided.


Reference Pricing: A Small And Mighty Solution To Bend The Health Care Cost Curve, Srishti Miglani Jan 2015

Reference Pricing: A Small And Mighty Solution To Bend The Health Care Cost Curve, Srishti Miglani

Connecticut Insurance Law Journal

No abstract provided.


Everything’S Bigger In Texas: Except The Medmal Settlements, Tom Baker, Eric Hellan, Jonathan Klick Jan 2015

Everything’S Bigger In Texas: Except The Medmal Settlements, Tom Baker, Eric Hellan, Jonathan Klick

Connecticut Insurance Law Journal

No abstract provided.


The Patient Protection And Affordable Care Act: What Does It Really Do?, John G. Day Jan 2015

The Patient Protection And Affordable Care Act: What Does It Really Do?, John G. Day

Connecticut Insurance Law Journal

No abstract provided.


Adoption Disruption Insurance: A Policy That America Is Not Ready To Adopt, Gregory J. Chase Jan 2015

Adoption Disruption Insurance: A Policy That America Is Not Ready To Adopt, Gregory J. Chase

Connecticut Insurance Law Journal

No abstract provided.


An Alternate Theory Of Burwell V. Hobby Lobby, Jessica L. Roberts Jan 2015

An Alternate Theory Of Burwell V. Hobby Lobby, Jessica L. Roberts

Connecticut Insurance Law Journal

No abstract provided.


The Macroprudential Turn: From Institutional 'Safety And Soundness' To Systematic 'Financial Stability' In Financial Supervision, Robert C. Hockett Jan 2015

The Macroprudential Turn: From Institutional 'Safety And Soundness' To Systematic 'Financial Stability' In Financial Supervision, Robert C. Hockett

Cornell Law Faculty Publications

Since the global financial dramas of 2008-09, authorities on financial regulation have come increasingly to counsel the inclusion of macroprudential policy instruments in the standard ‘toolkit’ of finance-regulatory measures employed by financial supervisors. The hallmark of this perspective is its focus not simply on the safety and soundness of individual financial institutions, as is characteristic of the traditional ‘microprudential’ perspective, but also on certain structural features of financial systems that can imperil such systems as wholes. Systemic ‘financial stability’ thus comes to supplement, though not to supplant, institutional ‘safety and soundness’ as a regulatory desideratum.

The move from primarily micro- …


The Role Of The Profit Imperative In Risk Management, Christopher French Jan 2015

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

Journal Articles

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 …