The ultimate test of an insurance policy comes when a claim is filed. An effective and fair process for investigating, evaluating, paying, and defending claims is at the core of the relationship between an insurer and a policyholder. This conference sponsored by the Rutgers Center for Risk and Responsibility on February 29, 2012, brought together legal academics, other scholars who study claim practices and their regulation, and practitioners to explore the present and future of the regulation of insurance claim practices.
In both first-party and third-party insurance, when claims are not paid or settlements not reached, disputes inevitably arise about whether the company has adhered to appropriate standards of claim practices. In many jurisdictions, those disputes are governed by the law of insurance bad faith, defined by statute or common law and framed as breach of contract, tort, or other wrong. State regulators also provide frameworks for resolving the disputes, and market considerations have a role to play as well.
The law of claim practices is a source of controversy. Policyholder advocates argue that unfair claim practices are widespread and that the remedies for them are inadequate. Insurance companies respond that claim practices are generally appropriate but excessive bad faith litigation imposes too heavy a burden on companies and ultimately policyholders. Several jurisdictions recently have enacted statutes regulating claim practices and legislation is being considered in other states. Judicial decisions have both broadened and narrowed the law of bad faith.
Theoretical Approaches to Bad Faith
Kenneth S. Abraham—University of Virginia School of Law
Robert Jerry—University of Florida Levin College of Law
The Law of Claims Practices
Jay Feinman—Rutgers Law School
Thomas F. Segalla—Goldberg Segalla LLP
Douglas R. Richmond—AON Risk Services
Amy Bach—United Policyholders
Empirical Perspectives on Claims Practices Regulation
Mark Browne—University of Wisconsin School of Business
Sharon Tennyson—Cornell University College of Human Ecology
Peter Siegelman—University of Connecticut School of Law
Tom Baker—University of Pennsylvania School of Law