The General-Liability Reform Experiments and the Distribution of Insurance-Market Outcomes

Many states enacted tort liability-reform laws in the late 1980s to limit liability costs and stabilize insurance markets. This article uses firm-level data from two states that enacted reforms over the 1984–1991 period—New York and Colorado—to assess the effect of reforms on general-liability insurance. The liability-insurance performance in Pennsylvania and Kentucky—two states that did not adopt reforms—provides a reference point for how insurance markets might have performed otherwise. The quantile regression models indicate that the improvement in insurer profitability was substantial. This improvement, however, appears to be largely attributable to a secular trend rather than to the effect of liability reforms

Actuarial science · Business · Econometrics · Economics · General insurance · Insurance policy · Liability · Liability insurance · Quantile regression · Tort · Tort reform · Insurance and Financial Risk Management · Law, Economics, and Judicial Systems · Medical Malpractice and Liability Issues · Finance

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