A Principled Approach to Insurance Law: The Economics of Insurance and the Current Restatement Project
43 Pages Posted: 17 Jul 2015 Last revised: 10 Sep 2015
Date Written: June 17, 2015
This paper applies the principles of the economics of insurance to the proposals emanating from the American Law Institute’s current project to develop a Restatement of the Law of Liability Insurance. The paper attempts to demonstrate that the proposals of the Reporters of this project — Professor Tom Baker of the University of Pennsylvania and Professor Kyle Logue of the University of Michigan — may benefit some policyholders in the short-run, but are likely to harm policyholders in general in the long run. These effects result from the Reporters’ neglect of the economic forces that define current liability insurance contracts.
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