Insurance Law

American Association for Justice is a Caricature

Posted on September 29, 2009
I got a kick out of this article in the Washington Times on Sept. 28. The point of the story is that the trial lawyers' lobby might be having financial difficulty. The part I find interesting is that AAJ says...

Isn't this a good thing?

Posted on August 12, 2009
HILO, Hawaii -- Living on the slope of one of the most active volcanos in the world can be expensive when it comes to homeowners insurance. via www.dailyherald.com.

Consumer Advocates on Florida 2007 v. 2009

Posted on August 10, 2009
Does anyone see a relationship? 2007 Q: [Lakeland (Fla) Ledger Jan 14, 2007] Industry lobbyists say if Florida gets too tough with insurance companies, it will drive the insurers from the state. Can Florida afford to do that given that...

Hurricane Season of 40 Years Ago v. Todays

Posted on August 07, 2009
(click to make larger) The Hurricane Forecasts for this year are being reduced. Now we can expect about 10 named storms (I hope we get to G this year as we could all use a year of Grace) and 4...

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Heres some new regulatory news

Posted on July 31, 2009
The Guy is really busy.

At War with the Weather

Posted on June 11, 2009
Four years in the making?. I just received my copy in the mail today from MIT Press. It is available on Amazon for $ 37.12. What a bargain. In the fine print on the cover you can see while I...

Non OFC Federal Regulation

Posted on June 10, 2009
I heard rumors of this last week. Details so far: Big insurers are regulated by feds ?Deregulation? (whatever that means) will not occur. The Fed will be the systemic risk regulator There will be a financial consumer protection agency FDIC...

Florida Chamber of Commerce Poll Results

Posted on June 10, 2009
via IJ ? 62 percent believe consumers should be allowed to choose their property insurance provider "even if the prices are not fully regulated by the state" rather than to be limited to purchasing insurance from a provider whose prices...

A Little Friday Levity

Posted on June 05, 2009
Not to be confused with the new little Leverty. Riskprof?s Ty Leverty had a little boy earlier this spring. I won?t disclose his name out of respect to his privacy, but it is a real strong Irish name. I am...

Quote of the day....

Posted on June 04, 2009
"We're one large hurricane away from a major threat to the economy of this state [Florida]," said Proctor, R-St. Augustine. via www2.tbo.com.

Nice Biliography on The Future of Insurance Regulation

Posted on June 04, 2009
Martha Henn McCormik at the Networks Financial Institute has produced a nice biography of regulatory reform.

My Congressional Testimony Part I (The Back Story)

Posted on June 03, 2009
I have been teaching a special three week term. Each class meets about 3 hours per day and I am teaching two. (I just finished yesterday.) At the beginning of the term I was asked to testify before Congress regarding...

Anti-Life Insurance

Posted on June 03, 2009
A Buckinghamshire man diagnosed with terminal cancer is to collect a second winning payout of £5,000 after betting he would stay alive. Jon Matthews, 59, from Milton Keynes, was diagnosed with mesothelioma, a cancer linked to asbestos, in 2006 and...

Book Update

Posted on June 03, 2009
Thanks to Mike the Actuary for noting that Amazon now has a copy of our book, The Future of Insurance Regulation for order. It is a new improved version of papers presented last July at the AEI.

A New Treasury Blueprint?

Posted on June 03, 2009
It seems similar to the last, according to this Reuters report, but it looks like insurance consumer protection might be regulated at the federal level. "The Fed could also lose some of its consumer protection responsibilities, which would move to...

Theyre Back!

Posted on May 28, 2009
Tropical Depression ONE

Meteorological Disaster Waiting to Happen

Posted on May 27, 2009
That is USA Today's take on Florida. According to its editorial, the increasing risk to the nation due to Florida's hurricane insurance market mismanagement is ... "At bottom, Florida's underfunded, state-run program is a cynical ploy to get people in...

New book

Posted on May 26, 2009
Last week I had the privilege of testifying before Congress on the future of insurance regulation (more on that later). Today, I received a copy of a book edited by Bob Klein and me with the same title. It does...

The One about Research

Posted on May 01, 2009
Florida Insurance Commissioner Kevin McCarty talks about "research" ... It is always interesting, and frequently amusing, to read various ?research? pieces on the Florida property insurance market. While I, like every other insurance regulator, industry professional and observer in the...

RiskProf takes the dare

Posted on April 27, 2009
I could be wrong about a number of things, but I try --in this forum --to be correct in applying economics to situations involving risk and insurance. My opinions are based upon economic theory which includes the theory of how...

Metrological Disaster Waiting to Happen

Posted on April 21, 2009
That is USA Today's take on Florida. According to its editorial, the increasing risk to the nation due to Florida's hurricane insurance market mismanagement is ... "At bottom, Florida's underfunded, state-run program is a cynical ploy to get people in...

Another Example of Government Getting Involved In Markets

Posted on April 21, 2009
to an industry's detriment. State/Local dealerships laws restrict the ability of GM to relieve itself of inefficient dealerships. (L.A. Times, 4/13). via Craig Newmark "The possibility of bankruptcy looms for GM and Chrysler after President Obama rejected their latest financing...

Some Basic Risk Management

Posted on April 20, 2009
Don't own animals that can eat you. (via IP) My vegetarian daughter also agrees and her response is ?Well Duh?.

Should Insurance Be Free?

Posted on April 15, 2009
See the parallels from "Should Water Be Free?". Gosh, darn it...why do we have to pay for necessities? Also, the U.S. Treasury doesn't want to make Florida insurance free (or cheaper) by exporting the cost to the federal taxpayer. Actually,...

MFA (Again)

Posted on April 15, 2009
I am in favor of eliminating the McCarran-Ferguson Act's antitrust exemption of the insurance industry. In theory, there is no real reason to have it anymore. Bob Klein and I wrote a paper last year for the Searle Center on...

Observations on Consumer Advocates II

Posted on April 14, 2009
While putting together the previous post, I noticed a report on the Americans for Insurance Reform Website (which appears defunct, but is part of the Center for Justice and Democracy website). In a 2006 report, the AIR called for the...

Observations on Insurance Related Consumer Advocates I

Posted on April 13, 2009
I just saw a post by Claire Wilkinson at the I.I.I. about the 2008 property-casualty industry profits. It made me think about past disagreements with the Center for Justice and Democracy and other consumer advocate groups. Profits are down... substantially...

The clucking of chickens coming home to roost

Posted on April 04, 2009
Evidently Florida Gov. ?Good riddance? Crist is admitting insurance prices need to rise. Miami Herald 4/4/09 Technorati Tags: hurricane,insurance,regulation .

We'll probably be seing a lot more of this

Posted on April 01, 2009
Two AIG directors are not seeking reelection to the board. (IJ) Think about potential D&O issues that haven't been brought up yet. Is is a violation of the firm's fiduciary duty to a lender to give out employee bonuses? Maybe...

Remember Us?

Posted on March 28, 2009
We've had a busy year here at RiskProf. Things are settling down and posting will resume next week. it is hard to believe that we've missed all the excitement with AIG, financial services regulation, and liability reform. However, as the...

Insurance Credit Scoring on Insurance Journal

Posted on September 29, 2008
Insurance Journal began posting the testimony I gave on insurance scoring (5/21/2008) last week here. The comments posted by viewers are "funny." Some of the less-informed comments appear to come from insurance agents (CIC, etc). It is interesting that agent...

Slow Catastrophe Risk Management

Posted on August 11, 2008
We normally thing of Cats as step function events--everything is fine then a disaster occurs. However, is it possible to manage the death by 1000 cuts type of Cat? This would be one where each individual event is not that...

Portland Is Great

Posted on August 08, 2008
As the last post showed I didn't see many papers. There were too many new beers to taste! I also had the pleasure of having lunch with David Rossmiller. A good time was had by all. We didn't even spend...

School is Starting up Soon

Posted on August 08, 2008
Riskprof will be posting more regularly now that school is supposed to start. Lars, Ty and I were out in Portland, OR for the American Risk and Insurance Association's Annual Meeting. Papers can be found here. Here are a few...

Ruminations (Part II)

Posted on July 18, 2008
Time Magazine takes a look at Florida ... Greetings from Florida, where the winters are great! Otherwise, there's trouble in paradise. We're facing our worst real estate meltdown since the Depression. We've got a water crisis, insurance crisis, environmental crisis...

Ruminations on Florida (Part I)

Posted on July 18, 2008
By now everyone is aware of State Farm's recent 47.1 percent rate increase for Florida Homeowners insurance. I received a number of e-mails about it including one from State Farm which pointed me to two items. The first is their...

Friends in High Places

Posted on July 15, 2008
My former GSU colleague Arthur Brooks is named AEI President replacing Chris DeMuth. Congrats Arthur.

Optional Federal Regulation

Posted on July 14, 2008
Last week we had a great conference at the AEI hosted by Peter Wallison. The program and papers are here. Video is here. I sound so much better on fast forward! Bob Klein and I also were interviewed by Ray...

Private Flood Insurance

Posted on June 30, 2008
Nationwide Mutual Insurance Co is lobbying Congress for permission to sell flood coverage in its homeowners policies. This is exciting. Their proposal indicates that they plan to sell flood insurance at the same price as NFIP policies, but with the...

What Florida Really Wants -- Other Peoples' Money

Posted on June 19, 2008
This IJ article points out that Mr. McCain and some governors (two of which are mentioned as possible running mates) are at odds over a national disaster fund. If we just focus on one principle that is supposedly an important...

The Future of Insurance Regulation

Posted on June 17, 2008
Georgia State University, The Brookings Institution and the American Enterprise Institute are putting on a Conference at the AEI on July 9th. There my be some room left if you want to come (click here for details), but in case...

Iowa and Katrina Floods

Posted on June 17, 2008
One of the co-bloggers here at RP is confined to his house out (on a hill luckily for him) in Iowa City. He spent the weekend making sandbags to protect the University. I asked Ty why there isn't the Katrina-like...

Fascinating What if Question.....

Posted on June 16, 2008
What if cars with bumper stickers were more likely to be involved in accidents involving road-rage?. Here is the Washington Post's summary. Watch out for cars with bumper stickers. That's the surprising conclusion of a recent study by Colorado State....

Where have I been?

Posted on June 06, 2008
If ?constantly behind schedule? is a place, I have been there for about a year. The fruits of my labor will find their way to RiskProf in the next few weeks, starting with this posting. On May 21st I performed...

Temporary Post Used For Style Detection (579274cf-cd93-4b54-848f-0c6539d61c1f)

Posted on June 06, 2008
This is a temporary post that was not deleted. Please delete this manually. (5e3122d0-0e8d-4430-b68d-bdb14d3c936b)

AEI/Brookings Georgia State Conference

Posted on May 15, 2008
.... On the future of Insurance regulation will be held at the AEI on July 9. Be there or be square. Here is the link to the program. The conference is sponsored by the Risk Foundation.

Georgia Deregulates (mostly) Auto Insurance

Posted on May 15, 2008
Yesterday, Governor Perdue, singed a law recently passed (SB 276) by the legislature that would allow insurers to set prices in a free market for automobile insurance. My colleague Rich Phillips and I made a couple of presentations to legislative...

Gotta Love Them Experts

Posted on April 22, 2008
From the 12/16/2005 edition of the Insurance Journal comes this headline: Experts Quibble Whether New Madrid Fault Poses Threat

Nevada Counter Sig Law Struck Down

Posted on April 18, 2008
This is an interesting case noted by Diane Polscer at the National Insurance Law Forum. The 9th Circuit struck down a state law requiring insurance contracts to be signed by an agent licensed and residing within the state. What is...

Intersesting Papers

Posted on April 17, 2008
RiskProf (all three of us were there) went to to Chicago earlier this week for a conference put on by the Northwestern Law School's Searle Center. Some interesting papers (in no order of importance) A Jurisdictional Competition Approach to Reforming....

FLA Assocciation for Justice on Doc Shortage: Make them Work

Posted on April 03, 2008
The president of the Florida Association for Justice is after the medical malpractice industry too. He asserts it is not the state's legal environment that is causing the problem. However, he notes that one reason why there is an emergency...

NRO on Crist

Posted on April 01, 2008
"He's No Jeb Bush," but I guess he might be a VP contender.

Credit crunch hitting state storm insurance fund

Posted on April 01, 2008
Now everyone is questioning Florida's ability to pay claims. Link: Credit crunch hitting state storm insurance fund -- via MiamiHerald.com.

If Florida Has One, We Want One Too

Posted on April 01, 2008
California wants to get into the insurance business to compete against Warren Buffet. I was going to have a April Fool's Day Post about the dual surprise announcements that Florida Governor Crist stepping down to take over the Insurance Information...

Florida is Full of Good Ideas

Posted on March 31, 2008
According to the Miami Herald a law maker is thinking of taking reserves away from Citizens (the state owned insurer of last resort) to capitalize new insurers. Two things to note here. First, Citizens is still under capitalized in a...

A Really Big Grain of Salt ...

Posted on March 31, 2008
Christ Robinette points to this Concord Monitor (NH) op/ed by the president of the NH Association for Justice. The op ed says that insurers are to blame for med mal premiums --not lawyers. Prof. Robinette mentions the author might be...

Optional Federal Chartering for Lawyers

Posted on March 26, 2008
On the Spitzer, Scruggs, Weiss Trifecta .... What gets me, however, is the deafening silence out of Washington. When insurers step out of line--such as when bid-rigging and contingency fee abuse was exposed, or when thousands of policyholders were left...

What is so different about this year?

Posted on March 26, 2008
Gov. Crist came in last year guns ablazing at the evil black hat insures. The new sheriff kicked out those nasty insurers, took over the reinsurance business in Florida, and allowed the local social insurance company, Citizens, the price freedom...

What is so different about this year?

Posted on March 25, 2008
Gov. Crist came in last year guns ablazing at the evil black hat insures. The new sheriff kicked out those nasty insurers, took over the reinsurance business in Florida, and allowed the local social insurance company, Citizens, the price freedom...

Atlanta Tornado

Posted on March 22, 2008
I have been so busy with the day job, I forgot to mention that my office had been missed by last weekend's tornados by about a block and a half. Other faculty around here were not so lucky. Some dorms...

And you know, Mr. Hugo Chavez is a Libertarian

Posted on March 22, 2008
What is wrong with this picture? Florida Insurance Commissioner McCarty claims he is a conservative Republican. He must be the kind that believed in Smoot-Hawley and worsened the Great Depression. I am not a conservative Republican, so it is hard...

And you know, Mr. Hugo Chavez is a Libertarian

Posted on March 21, 2008
What is wrong with this picture? Florida Insurance Commissioner McCarty claims he is a conservative Republican. He must be the kind that believed in Smoot-Hawley and worsened the Great Depression. I am not a conservative Republican, so it is hard...

Atlanta Tornado

Posted on March 21, 2008
I have been so busy with the day job, I forgot to mention that my office had been missed by last weekend's tornados by about a block and a half. Other faculty around here were not so lucky. Some dorms...

Interesting items

Posted on March 10, 2008
Riskprof in the news (on Credit Scoring) Client No. 9 in the news (on Scoring)* * apologies for my tacky attempt at humor

Goergia has a Competative Insurance Market!

Posted on March 07, 2008
I haven't seen the bill yet, but it looks like the Georgia House and Senate passed a bill that deregulated the Auto insurance market. A novel modification to complete deregulation is that the mandatory minimum coverage is still subject to...

More on non-renews!

Posted on March 04, 2008
More policy owners are getting notices of non-renews. The focus of this Orlando Sentinel article is that the insurance companies are doing something wrong. However, no mention is made of the State of Florida's responsibility. It bears responsiblity for driving...

Florida's Proposed Hurricane Surcharges

Posted on March 01, 2008
? A 2.07 percent charge for one year to cover a portion of the 2007 deficit for Citizens' windstorm policies. ? A 1.4 percent emergency assessment charge to cover Citizens' remaining 2005 deficit; ends in 2017. ? A 1 percent surcharge to cover a 2005 deficit at the Florida Hurricane and Catastrophe Fund, which provides cheaper backup reinsurance for insurers operating in the state; ends in 2013...

The Life of a Former Insurance Commissioner

Posted on March 01, 2008
Charles Quackenbush, former CA Insurance commissioner who left office after allegations of official malfeasance,is now a Florida County sheriff's  deputy.  He shot a suspect who took his taser in a scuffle.  (LA Times Blogs) Other insurance commissioners go on to be governors or congressmen...

All that You wanted to Know About Cat Markets but were Afraid to Ask

Posted on February 29, 2008
Wharton, III and GSU have just released a study of CAT risks.  It is an amazing 400+ pages, so download it if you are a speed reader.  The executive summary is only 23 pages long.   

Another Look at Insurance Profits

Posted on February 29, 2008
Ted links to a CJ&D complaint that insurers are making profits.  It is hard to believe that we are talking about this.  Under our economic system profits are good thing.  Profit attracts capital, firms enter, and competition is enhanced...

We are back

Posted on February 28, 2008
Regular posting will resume tomorrow.  I just needed a sabbatical! Just in case you wanted to read something about insurance regulation, Bob Klein and I have a new report that came out this week on the effects of an optional federal charter on the state economies...

Backdating Conviction

Posted on January 17, 2008
The first conviction for the backdating of executive stock option grants was handed down yesterday to an executive from Brocade Communication Systems.  He recieved 21 months in prison and a $15 million fine.  Speaking to the judge before his sentencing the executive said,  “I’m sorry...

Best Sentence of the Day

Posted on January 10, 2008
Is it just me, or is this whole thing starting to resemble a runaway stage coach on fire, careening over rocks and through gullies, wheels flying off and folks jumping out, hoping to land on something softer than a cactus? from David Rossmiller on the comings and goings in the circus we are affectionately call the Katrina related litigation stagecoach.

Being a Good Samaritan is one thing, but ...

Posted on December 28, 2007
The 2005 hurricanes illustrated how many Americans are uninsured and underinsured for natural catastrophes and the federal government?s role in recovery from natural catastrophes. An analysis by HUD found that of the 192,820 owner-occupied homes with major or severe damage from Hurricanes Katrina, Rita, and Wilma, approximately 78,000, or about 41 percent, did not have any insurance or did not have enough insurance to cover the damage incurred...

It's a Hot Kitchen Moment

Posted on December 22, 2007
We need a word for when a public figure complains about something clearly non-libelous which is said in a blog.  David Rosmiller has recently taken the the Mississippi AG's office to task for some of its decisions regarding its lawsuit against State Farm and its dealings with people related to civil suits against the company...

Eh? Speak up you little wippersnapper ....

Posted on December 21, 2007
Link: califmedicineman.blogspot.com. Why Insurance Companies Don't Pay For Hearing Aids..As good an explanation about insurability as I have seen.  A similar rationale explains why dental insurance isn't a good deal. via H G Stern at Insureblog...

That's Canadian dollars too!

Posted on December 20, 2007
From: thelede.blogs.nytimes.com. Barbara Wellensiek knew her son?s insurance bill would be steep because of his driving record, but when the renewal notice arrived she was shocked to see the annual premium was $104,566.63. ?I thought it was a typo,? Wellensiek said today...

Insurance Regulation

Posted on December 20, 2007
I just finished grading a bunch of exams and Ted Frank sent me a blog post from the Orlando Sentinel.  It made me think of a test question I didn't ask....... Ok, suppose you are the governor of a big state.  (Yes, it can have palm trees if you want...

I am lawsuit abuse

Posted on December 19, 2007
"When I heard $67 million, I said to myself, 'Nonsense'... How could he claim this much over a pair of pants?" From www.iamlawsuitabuse.org quoting the Chungs on their recent unpleasantness. Also a short video from fellow GSU Professor Olga Jarrett on the influence of the nanny state and fear of lawsuits on play grounds and school play...

Sink Sees the Red Ink

Posted on December 14, 2007
If a hurricane did $28 billion in damage to Florida, the state might have to issue $20 billion in bonds. That would mean putting a special assessment on homeowners and business to the tune of $1.7 billion a year for 30 years, [State CFO Alex] Sink said...

How Not to Invest

Posted on December 10, 2007
Future insurance payouts are funded, in part, by investment returns.  An insurer receives a premium, pays its initial expenses, puts part of the premium into reserves and the rest goes into the bond and equity markets.  In theory, good insurers put their investments into a broad array of high quality bonds and to a lesser extent into high quality equities...