The Regulation of Insurance Claim Practices

UC Irvine Law Review, vol. 5, p. 1319, 2015

35 Pages Posted: 20 Jul 2016  

Jay M. Feinman

Rutgers Law School

Date Written: April 4, 2016

Abstract

Insurance claim practices determine the extent to which insurers will or will not honor their promises. This Article describes the failure in the market for claim practices, the failure of the regulatory responses to that failure, and the ways in which litigation can provide a partial corrective. The Article explains why the market fails to guarantee fair claim practices, how market forces might be improved, and why, even with improvements, market forces alone are not enough. It then describes claim-practices regulation by state insurance departments, argues that regulation in most cases is insufficient, and suggests improvements in state regulation. Finally, the Article concludes that private litigation, in addition to redressing individual harm, serves a necessary regulatory function in promoting fair claim practices, and it describes the substantive law and processes that are needed to perform that function.

Keywords: insurance, insurance law, bad faith, insurance claims, insurance regulation

JEL Classification: K12, K19, K23, K39, K41, L50

Suggested Citation

Feinman, Jay M., The Regulation of Insurance Claim Practices (April 4, 2016). UC Irvine Law Review, vol. 5, p. 1319, 2015. Available at SSRN: https://ssrn.com/abstract=2811146

Jay M. Feinman (Contact Author)

Rutgers Law School ( email )

NJ
United States
856-225-6367 (Phone)

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