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Medical Big Data and Big Data Quality Problems

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Sharona Hoffman

Volume 21

Issue 1

PUBLISHED

Fall 2014

Abstract

Medical big data has generated much excitement in recent years and for good reason. It can be an invaluable resource for researchers in general and insurers in particular. This Article, however, argues that users of medical big data must proceed with caution and recognize the data’s considerable limitations and shortcomings, including data errors, missing information, lack of standardization, record fragmentation, software problems, and other flaws. This Article analyzes a variety of data quality problems and then formulates recommendations to address these deficiencies, including data audits, workforce and technical solutions, and regulatory approaches.

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Payment Protection Insurance (PPI) Misselling: Some Lessons From the UK

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Andromachi Georgosouli

Volume 21

Issue 1

PUBLISHED

Fall 2014

Abstract

The misselling of Payment Protection Insurance (“PPI”) is a longstanding problem in the UK. The Treating Customers Fairly (“TCF”) initiative was introduced to tackle this problem but, despite its sophisticated inception, its effectiveness has been limited. This Article canvasses the main features of TCF as a management-based approach to regulation and highlights its initial appeal. Against this backdrop, it draws on recent UK experience with recurring instances of PPI misselling to explain the principal causes of its shortcomings in the retail financial sector. It argues that the perceived failure of this regulatory approach may be attributed to three factors: (i) the rulification of TCF; (ii) several shortcomings of the existing data resource management; and (iii) the absence of a system of credible deterrence to support the Financial Conduct Authority’s attempts to be proactive and infuse cultural change at the regulated firm level. The Article concludes with a summary of key lessons that may be drawn from the UK experience.

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Big Data and Insurance Symposium

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George Jepsen

Volume 21

Issue 1

PUBLISHED

Fall 2014

Abstract

This Article reproduces the keynote address delivered by Connecticut Attorney General George Jepsen at the University of Connecticut School of Law’s Spring 2014 Big Data and Insurance Symposium. In his address, Attorney General Jepsen describes the opportunities and challenges associated with the use of big data technologies. He stresses the need to consider personal privacy concerns at every step of the data collection and analysis processes. Moreover, he argues that self-policing is not enough and that it is vital for the government to play a role in defining and enforcing individual privacy protections. Attorney General Jepsen concludes by calling for regulators and industry to remember that they share the common goal of achieving an effective balance between protecting personal privacy and promoting the use of big data to create new business opportunities and more efficient service delivery.

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Fortuity Victims and the Compensation Gap: Re-Envisioning Liability Insurance Coverage for Intentional and Criminal Conduct

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Erik S. Knutsen

Volume 21

Issue 1

PUBLISHED

Fall 2014

Abstract

Insurance is based on the notion that only uncertain, or fortuitous, losses are insurable. There are systemic problems, however, with the consistency in which fortuity clauses are applied in the liability insurance context. Differing interpretive approaches and litigation distortions include the use of at least three interpretive perspectives and two substantive requirements to interpret the intentional act fortuity clause, and four interpretive perspectives to interpret the criminal act fortuity clause. These problems stem from the tension between the two purposes of liability insurance (wealth protection and victim compensation) coupled with a move from explanatory rhetoric about fortuity to explanatory rhetoric about morality. This Article outlines the importance of balancing that tension and examines the problematic effects of these two ubiquitous fortuity clauses that remove coverage for policyholders and simultaneously deny access to compensatory funds for injured victims. The Article argues that intentional and criminal act fortuity clauses need to be more consistently interpreted to avoid a host of inefficient distortion effects that result from the introduction of moral concerns, and it concludes by offering possible solutions for redress for those accident victims who would still be left—though more predictably—in the liability insurance compensation gap.

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Towards a European Supervisory Authority

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Javier Vercher-Moll

Volume 21

Issue 1

PUBLISHED

Fall 2014

Abstract

Regulation (EU) No. 1094/2010, which established a European Insurance and Occupational Pensions Authority, may involve a major change to the management and supervision of private insurance in Spain and in the European Union. This Article analyzes the evolution from the original Insurance Committee, which had only advisory functions, to this new Authority, which has been given decision-making functions in addition to its advisory role. The Article concludes by suggesting that, in the future, this new Authority will be the sole supervisory body operating in all Member States, demonstrating a progression toward a new conception of supervision and regulation of insurance—or perhaps another step toward Community-wide integration.

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The Harmonization of European Contract Law: The Case of Insurance Contracts

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Juan Bataller Grau

Volume 21

Issue 1

PUBLISHED

Fall 2014

Abstract

The harmonization of European Contract Law for consumers and businesses continues to progress; however, without some standardization of the insurance contract, it will be difficult to achieve a true single market. This Article chronicles the European Union’s activities toward this goal, including the role of the Principles of European Insurance Contract Law, which provides a set of model rules for European legislators. The Article also analyzes (i) the appropriate legal nature of the instrument of European Contract Law; (ii) the scope of that legal instrument (for example, whether it should cover both cross-border and domestic contracts, and whether it should include contracts between businesses and consumers or only those between businesses); and (iii) the most appropriate scope to answer the needs to be served. The Article argues for the use of optional instruments as a key step toward a harmonized system and suggests that the best way forward is to construct a regulatory system whose ultimate objective is to be globally applicable. Lastly, the Article concludes that the law of insurance contracts is a constituent part of contract law and that, as such, the best legislative practice for the regulation of insurance contracts is to restrict its scope to those issues that differentiate insurance from the general theory of obligation and contract.

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Reinsurance as Governance: Governmental Risk Management Pools as a Case Study in the Governance Role Played by Reinsurance Institutions

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Marcos Antonio Mendoza

Volume 21

Issue 1

PUBLISHED

Fall 2014

Abstract

Scholars have eloquently detailed the “Insurance as Governance” concept, the potential capacity for reinsurer regulatory influence on insurers, and the many aspects under which these theories may arise. This Article takes the next step in analyzing the complex reinsurer–insurer relationship through empirical research into how carriers are actually influenced by reinsurers, and what effect this has on the parties. As a case study in the governance role played by reinsurance institutions, this Article organizes survey interview responses of senior officials in the governmental entity self-insured risk management pool sector into four distinct discussion areas: (i) how reinsurers influence pools in general and in the key areas of underwriting, claims, and finance/solvency; (ii) the duty of utmost good faith and its effect; (iii) the level to which pools afford accommodation to reinsurers; and (iv) whether reinsurer influence varies based on pool circumstances or external factors. While analysis of the data collected showed varying degrees of regulation or governance by reinsurers, the Article concludes that not only does a form of reinsurance influence or “governance” clearly exist in the largely unregulated world of self-insured pools—whether characterized as direct, indirect, or regulatory in nature—but also that the governance effect is an open and recognized influence that is accepted by the pools.

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Towards a Universal Framework for Insurance Anti-Discrimination Laws

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Ronen Avraham, Kyle D. Logue & Daniel Schwarcz

Volume 21

Issue 1

PUBLISHED

Fall 2014

Abstract

Discrimination in insurance is principally regulated at the state level. Surprisingly, there is a great deal of variation across coverage lines and policyholder characteristics in how and the extent to which risk classification by insurers is limited. Some statutes expressly permit insurers to consider certain characteristics, while other characteristics are forbidden or limited in various ways. What explains this variation across coverage lines and policyholder characteristics? Drawing on a unique, hand-collected dataset consisting of the laws regulating insurer risk classification in fifty-one U.S. jurisdictions, this Article argues that much of the variation in state-level regulation of risk classification can be explained by focusing on three factors: (i) the predictive capacity of the characteristic in question; (ii) the extent of the adverse selection problem created if the characteristic is restricted; and (iii) the extent to which discrimination on the basis of the characteristic is considered illicit. The Article concludes by suggesting that this implicit conceptual framework, which is embedded in the pattern of general and specific insurance anti-discrimination laws enacted by states across the country, sheds new light on the nearly universal state prohibition against “unfair discrimination” by insurers.

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Even I Can’t Cover Me: Examining the NCAA’s Effective Prohibition on “Loss of Value” Insurance for its Student-Athletes

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Michael D. Randall

Volume 21

Issue 2

PUBLISHED

Spring 2015

Abstract

This Note analyzes the NCAA’s effective prohibition on student-athletes exploring outside insurance to cover the loss of value of their athletic talents. Currently, the vast majority of collegiate athletes are only permitted to obtain insurance for career-ending injuries. Existing NCAA Bylaws serve to effectively prevent these individuals from protecting themselves against value- or earnings-potential–reducing injuries. This situation is of particular concern because of the importance and prevalence of intercollegiate athletics as a (sometimes mandatory) step toward a career in professional sports. This Note examines the NCAA’s current insurance structure and the rationales for this system, which includes an effective prohibition against obtaining loss of value insurance to guard against losses in earnings. It then explores why this bar should be lifted and how current student-athletes could mount a challenge, as well as possible remedies and the implications of a successful challenge. Finally, it discusses how the NCAA and its member institutions could implement a loss-of-value insurance program, should they choose or be required to do so, and what concerns would arise.

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America’s Growing Problem: How the Patient Protection and Affordable Care Act Failed to Go Far Enough in Addressing the Obesity Epidemic

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Ashley A. Noel

Volume 21

Issue 2

PUBLISHED

Spring 2015

Abstract

For the last several decades, the United States has been facing an uphill battle against obesity. In addition to constituting a public health crisis, the increasing prevalence of obesity poses serious economic consequences for the United States as health care costs continue to soar. In an attempt to combat this growing problem, Congress included numerous provisions in the Patient Protection and Affordable Care Act aimed at reducing the high rates of obesity in the United States. This Note argues that the Affordable Care Act could have more effectively addressed the obesity crisis by providing a meaningful financial incentive encouraging the adoption of healthier lifestyles to obese Americans. This Note suggests two ways in which the Affordable Care Act could have incorporated such an incentive: (1) an amendment to section 213 of the Internal Revenue Code and (2) mandatory insurance coverage of weight loss– and health–related expenses.

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