Origins of the Tort Reform Movement

Ward, John O.

doi:10.1111/j.1465-7287.1988.tb00296.x

“…2 2 Ward (1988) examines multiple causes of the property‐casualty insurance crisis, including ineffective regulation of the insurance industry and a more litigious society. …”

mentioning

confidence: 99%

Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance

Viscusi¹,

Born

²

2005

J of Risk & Insurance

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This paper uses the complete property and casualty insurance files of the National Association of Insurance Commissioners from 1984-1991 to assess the effect of medical malpractice reforms pertaining to damages levels and the degree to which these damages are insurable. Limits on noneconomic damages were most influential in affecting insurance market outcomes. Several punitive damages variables specifically affected the medical malpractice insurance market, including limits on punitive damage levels, prohibitions of the insurability of punitive damages, and prohibition of punitive damages awards. Estimates for insurance losses, premiums, and loss ratios indicate effects of reform in the expected directions, where the greatest constraining effects were for losses.The quantile regression analysis of losses indicates that punitive damages reforms and limits were most consequential for firms at the high end of the loss spectrum. Tort reforms also enhanced insurer profitability during this time period.

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“…20-29. 2 Ward (1988) examines multiple causes of the property-casualty insurance crisis, including ineffective regulation of the insurance industry and a more litigious society. 3 See Danzon, Pauly, and Kington (1990); Weiler (1991);and Weiler et al (1993).…”

mentioning

confidence: 99%

Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance

Viscusi

¹

,

Born

²

2004

View full text Add to dashboard Cite

This paper uses the complete property and casualty insurance files of the National Association of Insurance Commissioners from 1984-1991 to assess the effect of medical malpractice reforms pertaining to damages levels and the degree to which these damages are insurable. Limits on noneconomic damages were most influential in affecting insurance market outcomes. Several punitive damages variables specifically affected the medical malpractice insurance market, including limits on punitive damage levels, prohibitions of the insurability of punitive damages, and prohibition of punitive damages awards. Estimates for insurance losses, premiums, and loss ratios indicate effects of reform in the expected directions, where the greatest constraining effects were for losses.The quantile regression analysis of losses indicates that punitive damages reforms and limits were most consequential for firms at the high end of the loss spectrum. Tort reforms also enhanced insurer profitability during this time period.

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“…To avoid a similar crisis several mechanisms have been proposed. Tort reform to limit the amount of awards and liability of insurers, and improved risk management to avoid poor underwriting services are ways the insurance industry can try to balance their risks (Smith, 1987;Ward, 1988). Certainly, these are issues that the insurance industry would need to consider when assessing the viability of the proposed model.…”

Section: Auditors Have a Contractual Relationship Onlymentioning

confidence: 99%

Auditors as Underwriters: An Alternative Framework

Bhattacharjee

¹

,

Moreno

²

,

Yardley

³

2005

International Journal of Auditing

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In the United States, auditors are required to examine clients' financial statements in compliance with generally accepted auditing standards (GAAS) and provide an audit opinion to assure investors that the statements are free of material misstatements. Since investors must trust the auditor in order for them to gain assurance from the audit report, we reason based on prior literature that the current process of regulation is based on a trust framework. However, given the current crisis in confidence resulting from recent accounting scandals, we argue that an institutional system based on trust must be rethought. In this paper, we propose an alternative framework for auditing that would meet investors' needs to reduce or even eliminate information risk while transforming this trust framework. In this model, the need for a traditional financial statement audit leading to an audit opinion would be eliminated since regulators could require that public companies purchase insurance from insurance companies to indemnify their financial statements against material misstatement. The insurance company would hire an auditor to act as an underwriter to assess the risk of material misstatements in the financial statements. The auditor, in the capacity of underwriter, would assess the risk to determine the amount of the insurance coverage and premium. We believe that the proposed model will allow the SEC and the stock markets to more effectively accomplish their goal of eliminating or significantly reducing investors' information risk, while restoring investors' confidence and trust in financial reporting.

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Origins of the Tort Reform Movement

Cited by 3 publications

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Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance

Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance

Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance

Auditors as Underwriters: An Alternative Framework

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