Regulation by Liability Insurance: From Auto to Lawyers Professional Liability
University of Pennsylvania Law School
Rutgers School of Law - Camden
March 31, 2013
UCLA Law Review, Forthcoming
U of Penn, Inst for Law & Econ Research Paper No. 13-4
Liability insurers use a variety of tools to address adverse selection and moral hazard in insurance relationships. These tools can act on insureds in a manner that can be understood as regulation. We identify seven categories of such regulatory activities: risk-based pricing, underwriting, contract design, claims management, loss prevention services, research and education, and engagement with public regulators. We describe these activities in general terms and then draw upon prior literature to explore them in the context of five areas of liability and corresponding insurance: shareholder liability, auto liability, gun liability, medical professional liability, and lawyers’ professional liability. The goal is to develop a conceptual framework to guide qualitative research on liability insurance as governance for initial application to lawyers’ liability and insurance.
Number of Pages in PDF File: 40
Keywords: Liability insurance, administrative regulation, risk, behavior, directors and officers liability insurance, car insurance, insurance for guns, malpractice insurance
JEL Classification: G22, K13, K23Accepted Paper Series
Date posted: February 9, 2013 ; Last revised: April 2, 2013
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