Insurance Law Commons^™

Tied Together With Covenants: Tying Provisions As The Anti-Hero To Fdic Insurance Limits, Kelly W. Cline

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No abstract provided.

Insuring Fortuity—And Intent: A Comment On Professor French's Insuring Intentional Torts, Erik S. Knutsen, Jeffrey W. Stempel

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No abstract provided.

The 2022 New Jersey Insurance Fair Conduct Act And The Incomplete Evolution Of Policyholder Protection, Jeffrey W. Stempel

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No abstract provided.

A Deeper Dive Into Nautilus: Differentiating Insurer Efforts To Recover Defense Costs And Assessing Recoupment In The Wake Of The Ali Restatement, Jeffrey W. Stempel

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Insurers and Policyholder have for decades contested whether the typical general liability policy requires policyholders to reimburse insurers for defense costs where a claim is ultimately held not to be one for which a defense is required. Although a slight majority of decisions favors insurers, the recent trend has favored policyholders, as reflected in §21 of the American Law Institute Restatement of the Law, Liability Insurance (“RLLI”), one of several contested portions of the RLLI. In Nautilus Insurance v. Access Medical, the Nevada Supreme Court provided the most extensive post-RLLI analysis of the dispute, ruling in favor of the …

Adding Context And Constraint To Corpus Linguistics, Jeffrey W. Stempel

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In Part I, I discuss the reasons why corpus linguistics should not be considered in isolation from contextual factors, as the latter often illuminate meanings that cannot be found from simply chronicling the usage of a given word. In Part II, I demonstrate, through the lens of three Supreme Court cases, that corpus linguistics does not aid interpretation when the words of a statute or document are clear, but their application to the facts at hand is not. My critique of corpus linguistics mirrors the larger, long-running, and ongoing debate of the merits of a more textual approach to interpretation …

Hard Battles Over Soft Law: The Troubling Implications Of Insurance Industry Attacks On The American Law Institute Restatement Of The Law Of Liability Insurance, Jeffrey W. Stempel

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ALI Restatements of the Law have traditionally exerted significant influence over court decisions and the development of the common law. During the past two decades, however, the ALI has seen an upsurge in interest group activity designed to shape or even thwart aspects of the Institute's work. Most recently, the Restatement of the Law of Liability Insurance (RLLI) has been the focus of not only criticism of particular provisions but a concerted effort by members of the insurance industry to demonize the project as a whole and bar use of the document by courts.

The vehemence of insurer opposition seems …

What Is The Meaning Of "Plain Meaning", Jeffrey W. Stempel

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The American approach to construing texts (statutes, regulations, contracts and documents generally) stresses decision through determining the “plain meaning” of the document based on the court’s reading of the text. Where the court finds plain meaning on the face of text, it generally refuses to consider additional contextual information or extrinsic evidence of meaning.

Notwithstanding its status as the dominant approach to interpretation, the plain meaning concept has not been well defined or operationalized. Despite judicial confidence in the plain meaning approach, courts have wisely been willing to sidestep it and eschew the rather clear facial meaning of text when …

Rejecting Word Worship: An Integrative Approach To Judicial Construction Of Insurance Policies, Jeffrey W. Stempel, Erik S. Knutsen

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Litigation over insurance coverage is really a quest for meaning: Does the insurance policy cover the loss at issue? Construing the insurance policy, courts are attempting to give legal effect to what the document purports to command. But what were the intentions and expectations of insurer and insured? Do those intentions even matter? Or is only the written text of the policy relevant to the coverage result? Courts approaching these questions typically frame the interpretative choice as one of strict textualism versus a more contextual, functionalist approach.

In many, perhaps even most situations, text and context align to create an …

Infected Judgment: Problematic Rush To Conventional Wisdom And Insurance Coverage Denial In A Pandemic, Erik S. Knutsen, Jeffrey W. Stempel

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The COVID-19 pandemic created not only a public health crisis but also an insurance coverage imbroglio, prompting near-immediate business interruption claims by policyholders impacted by government restrictions ordered in response to the pandemic. Insurers and their representatives "presponded" to the looming coverage claims by quickly moving to denigrate arguments for coverage, engaging in a pre-emptive strike that has largely worked to date, inducing too many courts to rush to judgment by declaring-as a matter of law-that policy terms such as "direct physical loss or damage" do not even arguably encompass the business shutdowns resulting from COVID-19. Our closer examination of …

Private Insurance Limits And Responses, Elizabeth Weeks

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The COVID-19 pandemic exposed a number of existing flaws in the United States’ patchwork approach to paying for and providing access to medical care. Shelter-in-place orders, social distancing, and other public health strategies employed to address the pandemic spawned a global recession, causing rapid and high unemployment rates in many countries. The U.S. unemployment rate peaked in April 2020 at 14.7%, higher than in any previous period since World War II. The United States has long hewed an anachronistic policy of relying heavily on private employers to provide health insurance to a substantial portion of the population. Those who are …

Seeking Insurance Parity During The Opioid Crisis, Valarie K. Blake

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Too many privately insured face substantial barriers and delays to getting timely and affordable substance use disorder (SUD) care when they need it, sometimes with terrible and irreversible consequences. Historically, private insurers have been reluctant to cover such services and have been glad to leave this responsibility to public systems like Medicaid. Laws like the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the Affordable Care Act (ACA) were meant to make private insurance more generous, but these laws are underenforced and too weak to fully address the challenges of the opioid epidemic. When patients and the …

State Benchmark Plan Coverage Of Opioid Use Disorder Treatments And Services: Trends And Limitations, Stacey A. Tovino

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Professor Tovino offers a survey of state benchmark plan coverage of opioid use disorder treatments and services, and identifies trends and limitations relevant thereto. Part II of the article provides background information regarding opioid use disorder and the treatments and services available for individuals with this disorder. Part III reviews federal mental health parity law and federal mandatory mental health and substance use disorder law as applied to insurance coverage of treatments and services for opioid use disorder, with a focus on the Affordable Care Act's (ACA's) state benchmark health plan selection requirement and the effect on that requirement of …

Substance Use Disorder Insurance Benefits: A Survey Of State Benchmark Plans, Stacey A. Tovino

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Professor Tovino presents the results of a survey of state benchmark health plan coverage of substance use disorder treatments and services, including treatments and services for opioid use disorder.

Protecting Auto Accident Victims From The Um/Uim Insurer Identity Crisis, Jeffrey W. Stempel, Erik S. Knutsen

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Automobile liability insurance is mandatory for drivers in all states, so as to provide for an available source of compensation for auto accident victims. Yet more than 20% of drivers in some states drive without valid, collectible automobile liability insurance. Another vast proportion of drivers have woefully inadequate financial limits of liability insurance that could not pay for even a modest percentage of a typical accident victim's compensatory needs. An auto accident victim cannot choose which tortfeasor driver injures her in a collision. Without the at-fault tortfeasor driver's liability insurance to act as a source of full compensation for her …

Bringing Counsel In From The Cold: Reconciling Ethical Rules With The Quagmire Of Insurance Defense Practice, Joseph Regalia, V. Andrew Cass

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Our case study is an ethical dilemma faced by insurance defense attorneys daily. An attorney is hired by Insurance Company A to defend an insured who is in a lawsuit over a car accident. Insurance Company A is one of the attorney's best clients, from whom he receives a steady stream of cases. Our attorney's investigation reveals good news-another driver not yet a party to the lawsuit may have contributed to the accident. This revelation has the potential to shift the blame, and all or part of the financial responsibility, onto the shoulders of the new potential party and his …

The Techno-Neutrality Solution To Navigating Insurance Coverage For Cyber Losses, Jeffrey W. Stempel, Erik S. Knutsen

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Insurers currently constrict coverage for losses involving electronic information in traditional insurance product lines. As a result, insurance customers are driven to the brave new world of non-standardized varieties of cyber-risk insurance policies. That world abounds with coverage gaps as the market for cyber insurance sorts itself out. Until that synchronization of coverage for cyber losses occurs, litigation is bound to occur as the boundaries of coverage remain patchwork and uncertain.

This article examines the degree to which cyber losses differ from other insured losses. The cyber-loss insurance coverage jurisprudence reveals a mishmash of principles and coverage terms that are …

Engaging Health Insurers In The War On Prescription Painkillers, Valarie K. Blake

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While insurers have both the power and the motivation to curb the practice of harmful opioid prescribing, they may go about it in ways that could be counter-productive to larger public health goals. After all, insurers have historically discriminated against addiction like any other condition that leads to costly healthcare consumption. In the past, insurers have avoided enrolling addicted insureds and have limited rehabilitation services. To address this epidemic, insurers might engage in ways that could harm third parties. For example, to the extent they are permitted, insurers might avoid addicted enrollees altogether, or might limit coverage of addiction treatments …

Rethinking The Americans With Disabilities Act’S Insurance Safe Harbor, Valarie K. Blake

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Despite the importance of access to healthcare for the disabled, the Americans with Disabilities Act (ADA) has made little inroads in reducing disability-based discrimination by health insurers in the United States. One reason is undoubtedly the ADA’s insurance safe harbor, which explicitly permits insurers to discriminate on the basis of disability in health insurance so long as the differential treatment is supported by actuarial data and is not just intended to disadvantage the disabled. While the safe harbor’s harms are somewhat limited by the advent of the Affordable Care Act (ACA), they are not entirely neutralized. This article argues that …

Murder For Life Insurance Money: Protecting The Children, Johnny C. Chriscoe

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Children are being murdered for life insurance proceeds.

Of course, if a beneficiary murders a child for the recovery of life insurance money and if he is apprehended, he will surely face numerous legal consequences. He will not recover the insurance money, he will be prosecuted and likely sentenced to life imprisonment or execution, he may be sued for the wrongful death of the child and he may be prosecuted for insurance fraud. However, all of these legal responses are triggered by the death of the child and, therefore, do not serve to protect the child from being murdered in …

Notes From A Quiet Corner: User Concerns About Reinsurance Arbitration – And Attendant Lessons For Selection Of Dispute Resolution Forums And Methods, Jeffrey W. Stempel

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Arbitration between insurers and reinsurers – those who insure insurance companies – should logically run as smoothly as any arbitration process. Like the traditional commercial arbitration that drove enactment of the Federal Arbitration Act, reinsurance arbitration involves experienced actors in a confined industry in which the parties should be constructively aware of the rules, norms, customs and practices of the industry. But in spite of this, reinsurance arbitration experiences consistent problems of which the participants complain. This article reviews the complaints and exams possible solutions – including the possibility of arbitrating less and litigating more. Although these possible solutions would …

An Analytic "Gap": The Perils Of Relentless Enforcement Of Payment-By-Underlying-Insurer-Only Language In Excess Insurance Policies, Jeffrey W. Stempel

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Excess liability insurance, as the phrase implies, sits atop primary insurance or a lower layer of excess insurance and is required to cover only claims that are above the policy's "underlying limit" and reach the "attachment point" of the excess policy in question. Historically, the law was largely indifferent to whether the underlying limit was exhausted by full payment from the underlying insurer or by other means such as payment by the policyholder due to an underlying insurer's insolvency or because the policyholder and underlying insurer had compromised a coverage dispute for less than 100 percent coverage by the underlying …

The Other "Personal Injury": Coverage B Of The Cgl Policy, Jeffrey W. Stempel

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No abstract provided.

Redefining Medical Care, Lauren R. Roth

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President Donald J. Trump has said he will replace the Affordable Care Act (ACA) with health savings accounts (HSAs). Conservatives have long preferred individual accounts to meet social welfare needs instead of more traditional entitlement programs. The types of “medical care” that can be reimbursed through an HSA are listed in § 213(d) of the Internal Revenue Code (Code) and include expenses “for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.”

In spite of the broad language, regulations and court interpretations have narrowed this definition substantially. …

Dying Fast: Suicide In Individuals With Gambling Disorder, Stacey A. Tovino

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These published remarks carefully document the history of health insurance coverage of gambling disorder. They begin by providing examples of gambling disorder insurance benefit disparities in the contexts of public health care programs and private health plans. They proceed by reviewing the effect of three pieces of legislation, including the Mental Health Parity Act of 1996, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, and the Affordable Care Act of 2010, on public and private insurance coverage of gambling disorder. They highlight the partial victory that will occur in some states beginning in …

The Collective Fiduciary, Lauren R. Roth

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Can fiduciaries be made to serve public goals? The movement under the Patient Protection and Affordable Care Act (“ACA”) towards universal access to health insurance requires us to focus on the fiduciary relationships between large organizations providing access to healthcare and the populations they serve. These relationships have become a collective undertaking instead of a direct, personal relationship.

In this Article, I introduce the concept of the collective fiduciary in response to the shift towards uniform, national goals in the realm of health insurance and healthcare. Only through a collective approach can we hold fiduciaries accountable for the welfare of …

Controlling Health Care Spending: More Patient "Skin In The Game?", David Orentlicher

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In this article, Professor Orentlicher explores the high cost of healthcare and the trend in health insurance to shift the cost of health care to patients in an attempt to influence their behavior and health decisions. He examines such strategies as reference pricing, scaled cost-sharing, and employee wellness programs.

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

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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

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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 …

Enhancing The Socially Instrumental Role Of Insurance: The Opportunity And Challenge Presented By The Ali Restatement Position On Breach Of The Duty To Defend, Jeffrey W. Stempel

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The American Law Institute (ALI), in its current draft of the Restatement of the Law of Liability Insurance , has adopted the position that a liability insurer in breach of its duty to defend, but not acting in bad faith, forfeits the right to dispute coverage of the resulting judgment or reasonable, noncollusive settlement in a lawsuit. The ALI view is the minority rule in the courts in that most make bad faith a prerequisite for loss of a coverage defense but presumably will spur re-examination of the issue in many states. Unsurprisingly, insurers have opposed the ALI position with …

Medicaid At 50: No Longer Limited To The "Deserving" Poor?, David Orentlicher

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Professor David Orentlicher considers the significance of the passage of the Affordable Care Act on the Medicaid program. He discusses the expansion of the program's recipients from merely children, pregnant women, single caretakers of children, and disabled persons to all persons up to 138% of the federal poverty level. Professor Orentlicher argues that the Medicaid expansion reflects concerns about the high costs of health care rather than an evolution in societal thinking about the "deserving" poor. As a result, the expansion may not provide a stable source of health care coverage for the expansion population.