The Regulation of Insurance Claim Practices
UC Irvine Law Review, vol. 5, p. 1319, 2015
35 Pages Posted: 20 Jul 2016
Date Written: April 4, 2016
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: Suggested Citation