Prudent Insurance Research Articles

Sprawiedliwość w opiece zdrowotnej z perspektywy różnych koncepcji liberalnego egalitaryzmu

This article aims at presenting to the Polish reader a number of different conceptions of justice in health care, represented by the advocates of liberal egalitarianism. The author has given an overview of the most relevant, influential and representative theories, held by the liberal egalitarians, in order to present the way in which, in a democratic state, both just health care and respect for freedom and moral equality of individuals can be provided. The following issues will be discussed: John Rawls’s theory of justice, Norman Daniels’s theory of justice including health possibilities, varieties of luck egalitarianism, Ronald Dworkin’s “prudent insurance” ideal, Elizabeth Anderson’s democratic egalitarianism, a family of theories of egalitarianism of all kinds of luck and the theory of Shlomi Segall.

Some Reflections on Consumer Protection and the Requirement of Anticipating Behaviour of a Prudent Insurer

markdownabstract__Abstract__ Insurers are increasingly reminded of the fact that they are the professionals in situations where the insured risks becoming the victim of the fact that he is a layperson, and may lose his insurance coverage unless the insurer takes positive action. This paper sets out some instances in which such positive action should be required from a prudent insurer, such as duty to warn or inform the policyholder/insured, and the consequences for the insurer if he does not fulfill these duties.

Dworkin's prudent insurance ideal: two revisions

This article offers two revisions to Dworkin's ‘prudent insurance ideal’, which aims to account for justice in the distribution of healthcare so that (a) it can deal with market failures...

Ronald Dworkin’s “Prudent Insurance” Ideal for Healthcare: Idealisations of Circumstance, Prudence and Self-interest

I will focus on Dworkin's use of idealisation in his "Prudent Insurance" Ideal for healthcare. Dworkin identifies problems with the circumstances under which people make their insurance decisions in the current United States healthcare system and he sees these as being the cause of strange resource allocation outcomes. He therefore imagines idealising away these prima facie unjust circumstances to develop a hypothetical market in which people are able to make better decisions (Section "Idealisation of Circumstance"). I will identify two further idealisations that Dworkin relies on in his theory. The first is to idealise people to be perfectly prudent (Section "Idealisation of Prudence"), which I consider to be justifiable, but difficult to actually apply in practise. The second is to idealise people to be perfectly self-interested (Section "Idealisation to Self-interest"). I do not see this as a justifiable idealization since it ignores principles of altruism and citizenship, which would seem to be deeply relevant to a theory of justice.

Equality of Talent Resources: Procedures or Outcomes?

In chapter 2 of Sovereign Virtue, Dworkin proposes the hypothetical insurance market as the most promising way of explaining what equality of resources requires, in the face of unequal talents. Roughly, this analytical device imagines that people take insurance coverage for lack of income-earning talent, assuming that everyone has the same risk of ending up anywhere, high or low, within the market reward structure of a society that equally distributes external resources. Levels of insurance coverage are offered on the understanding that policyholders pay premiums out of their future earnings, and that premiums must be sufficient to sustain insurance payouts at each level of coverage. Under these equal conditions, the insurance choices made by the community define the inequalities of earning power that equality of resources would permit. These choices are to be implemented as accurately as possible, through programs of tax and transfer. I have always been puzzled by this insurance argument, for the following reason. On the one hand, the argument strongly suggests a procedural view on what equality of resources demands, in the sense that whatever result emerges from the hypothetical insurance market is morally legitimate by virtue of responsible choice, and should for that reason be carried out faithfully in the design of society’s redistributive framework. Now Dworkin also argues that prudent insurance under

Chemical and Biological Terrorism: How Real a Threat?

The potential threat of chemical and biological terrorism is sufficient to warrant an ongoing investment in improved intelligence collection and civil defense as a prudent insurance policy, but not on the massive scale advocated by some publicists and federal officials.

Statements of Fact and Statements of Belief in Insurance Contract Law and General Contract Law

The basis of many insurance policies is a proposal form consisting of a series of questions followed by a signed declaration that the answers are true and complete to the best of the proposer's knowledge and belief. In Economides v Commercial Union Assurance Co plc' insurers sought to avoid liability on a household contents policy on the basis of a misrepresentation as to the replacement cost of the insured property. At renewal of the policy, the assured had completed a proposal form in which he stated that the replacement cost was ?16,000 and signed a 'best knowledge and belief' declaration. The replacement cost was in fact approximately ?40,000. The case raised the distinction at common law between statements of fact and statements of belief or opinion, an issue that is complicated in insurance law by statutory intervention. The law of misrepresentation in insurance contract law is codified in section 20 of the Marine Insurance Act 1906, a provision which applies equally to marine and non-marine insurance. Section 20 stipulates that all material representations made by the assured in negotiating the contract must be true and then proceeds to define truth for these purposes. Section 20(4) provides that statements of fact are true if 'substantially correct, that is to say, if the difference between what is represented and what is actually correct would not be considered material by a prudent insurer.' Section 20(5) provides that '[a] representation as to a matter of expectation or belief is true if it be made in good faith.' In Economides, it was accepted that the inaccurate statement of replacement cost was not fraudulent. The insurers argued, however, that the statement of the cost had to be interpreted as representing the existence of reasonable grounds justifying the belief expressed as to cost. The Court of Appeal rejected this argument. Simon Brown and Peter Gibson LJJ held that section 20(5) precluded any such interpretation. In addition, Peter Gibson LJ and Sir lain Glidewell held that, even if such a representation could be implied, the assured possessed the requisite reasonable grounds. It is suggested that the conclusion that section 20(5) in all circumstances excludes an implied representation of reasonable grounds justifying a belief is regrettable in undesirably and unnecessarily compelling insurance contract law and general contract law to diverge.

Seismic Quality Declaration of Buildings

EARTHQUAKE INSURANCE For an insurer or a reinsurer, one of the major challenges connected with property insurance in earthquake prone countries is to evaluate the Probable Maximum Loss (PML). Why is that so important? The answer to this question is that if the PML assessment is not performed meticulously and correctly, then the insurer may take on greater liability than is reasonable considering the insurance company's existing solvency capital. Under such circumstances, survival of the insurer would be at risk and raises the question as to whether the policyholder would receive contractual compensation or not. Any prudent insurer will do his best to evaluate the PML that he is likely to sustain in the event of a serious earthquake. The insurer must evaluate three main factors: When we at Skandia check our exposure, we...

Nefarious Activities: To Disclose or Not to Disclose

It is well established that insurance contracts are contracts uberrimae fidei ("of the utmost good faith"). From this foundation derives the insured's duty to disclose facts material to the proposed risk. This duty is placed upon the insured because s/he normally has the best knowledge of facts material to assessing the risk. In New Zealand today, whether a fact is "material" (and therefore needs to be disclosed) is based upon the view a "prudent insurer" would take of it. While the insured will usually know the all of the facts relevant to an assessment of the risk, s/he will often not know which of those facts would be of importance to a "prudent insurer". Confusion on such issues has given rise to considerable case law in the area. This article first examines what must be disclosed at common law - which of a general range of "nefarious activities" an insured owes it to his/her insurer to come clean about; the range and breadth of what must be disclosed would surprise most insured parties. Secondly, the article examines situations where insured parties are relieved of the general disclosure obligation - what is at common law capable of being material might not need to be disclosed in specific situations - including situations where the conduct of insurers or wording of the proposal (or other insurer supplied documents) might allow an insured to escape the general duty.

Insurable Interest, Options to Convert, and Demand for Upper Limits in Optimum Property Insurance

Upper limits in property insurance contracts can result directly from the consumer's demand for them. They are demanded because the consumer has options to convert or move out of damaged property rather than merely to restore it to its previous condition and occupy it. In the absence of transactions costs, finding the optimum upper limit is equivalent to finding the insurable interest. When real estate transactions are costly, binding upper limits are demanded, but they may be higher than the upper limits that an insurer should impose to ensure incentive compatibility and mitigate moral hazard. Moreover, the concept of insurable interest divides to become two distinct concepts: the upper limit of legitimate demand, and the upper limit that the prudent insurer would use.

Being creative about rationing

An innovatory theory helps clearer thinking Two of the biggest questions in health care are “How much money should we spend?” and “What should we spend it on?” We don't have adequate methods for answering either question, but Ronald Dworkin, professor of law in both Oxford and New York and one of the world's leading thinkers on medical ethics, has developed a theory that provides a means to begin to answer both questions. Last week he presented his “prudent insurance principle” at a meeting in London organised by the Institute for Public Policy Research. Current practice with health care expenditure is based—more implicitly than explicitly—on what Professor Dworkin calls “the insulation model.” This postulates that health care is fundamentally different from other goods, that equality of access is essential for health care because it is so different, and that when something can be done acutely to avoid death it should be done (“the rescue principle”). In the United States this principle has led to such inappropriate actions as huge sums being spent to separate Siamese twins joined at the heart even though one will inevitably die and the other has only a tiny chance of surviving and no chance of living a normal life. In Britain large sums of money have been spent to give the teenager Jaymee Bowen further treatment for her leukaemia even though the discomfort to her is high, …

Medicare Benefits: A Reassessment

Changes in beneficiary cost-sharing provisions must be part of any multi-faceted strategy for Medicare's fiscal solvency . The current flawed benefit structure is seen as inefficient, inequitable , and contrary to prudent insurance principles. An income-related and selective increase in cost-sharing, combined with maximum liability, is proposed.

A Risk Theoretic Prescription for Regulated Ratemaking

The author is concerned with the inability of the non-life industry and regulatory authorities to agree upon what constitutes a fair return to the insurer and the manner in which this return should affect the ratemaking process. The suggested prescription seeks its justification in risk theory. The paper leads to several controversial conclusions, including the idea that rates should be loaded only enough to allow the insurer a fair return on that part of policyholder surplus funds required to conduct a prudent insurance business.

Risk Management Principles Applied to Mortgage Lending

There is need for greater use of risk management principles by the mortgage lender. His current use of hazard insurance and lender loss coverage protects only against inadequate security. Further utilization of risk analysis should be employed by the lender in evaluating borrower qualification. The lender should analyze insurance coverage carried by the borrower and recommend correcting any deficiences. Acceptance of the mortgage and its terms should depend upon borrower risk controls. The application of this technique will provide the lender with a superior mortgage portfolio and the borrower with both a manageable mortgage and a prudent insurance program.