Bad-faith remedies designed to protect policyholders from unfair claim settlement practices can potentially harm consumers, warns a new report published by the National Association of Mutual Insurance Companies (NAMIC).
The report, “First-Party Insurance Bad-Faith Liability: Law, Theory, and Economic Consequences,” was co-authored by Dr. Sharon Tennyson of Cornell University and Dr. William Warfel of Indiana State University. It suggests that bad-faith liability laws designed to deter insurers from engaging in unfair claim handling practices often have the effect of increasing claim costs and, ultimately, increasing premiums for consumers.
The evolution of first-party insurance bad-faith law and various approaches adopted by courts and state legislatures are covered in the report. It identifies a number of potential adverse effects of excessive or uncertain first-party bad-faith liability claims on insurance markets and analyzes claim data to investigate the empirical importance of these effects.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
