Anne Carroll

Using Best's Ratings in Life Insurer Insolvency Prediction

This article examines the efficiency of Bests recommendations, Insurance Regulatory Information System (IRIS) ratios, and other financial measures in their statistical ability to classify solvent and insolvent life insurers by estimating classification models for a sample of insurers for 1969 through 1986 and applying the models to a holdout sample for 1987 through 1991. The financial variables and IRIS ratios outperformed Bests recommendations in distinguishing between the two groups in a logit model. However, combining all three types of predictors into one model provided the most accurate classification of solvent or insolvent life insurers.

Medical Malpractice Reform and Insurer Claims Defense: Unintended Effects?

In response to recent and past medical malpractice insurance crises, most states have implemented reforms meant to stabilize premiums and coverage availability. The importance of understanding whether these reforms implicitly affect the behavior and incentives of plaintiffs, attorneys, medical providers, and malpractice insurers in the intended way is crucial to policy makers, if they are to achieve their goal. This study specifically examines the effect of reforms on the claims defense efforts of insurers, given that defense expenses account for approximately 30 percent of malpractice premiums. Using state data for the period 1998-2002, we regress claims defense expenses against a variety of reform variables. These include seven tort reforms (noneconomic damage caps, punitive damage limits, attorney fee limits, modified collateral source rule, modified joint and several liability doctrine, mandatory pretrial screening, and statute of limitations) and two government-sponsored insurance mechanisms (joint underwriting associations and patient compensation funds). Claims defense expenses are found to be higher in the presence of noneconomic damage caps, punitive damage limits, and attorney fee limits--an unintended and counterproductive effect of reform--but are lower with mandatory pretrial screening and patient compensation funds.

Low Income Fathers' Access to Health Insurance

We examine the prevalence and correlates of health insurance status among low-income fathers, a group not previously studied in this context. In a sample of 1,653 low-income fathers from a national urban birth cohort study, 29% had private, 14% had public, and 58% had no insurance. Privately insured fathers had greater levels of human capital than did publicly insured fathers; the latter more closely resembled uninsured fathers than they did privately insured fathers. Multinomial logistic regression analysis indicates that being older, being employed, being married, and having a job offering health insurance all increase the likelihood of having private (vs. no) insurance, and that being disabled and married to or cohabiting with the child’s mother increase the likelihood of having public (vs. no) insurance. Public policy should focus on increasing access to health insurance among low-income men, which may improve their health, productivity, and ability to support themselves and their children.

Housing Instability and Children's Health Insurance Gaps

OBJECTIVE To assess the extent to which housing instability is associated with gaps in health insurance coverage of preschool-age children. METHODS Secondary analysis of data from the Early Childhood Longitudinal Study-Birth Cohort, a nationally representative study of children born in the United States in 2001, was conducted to investigate associations between unstable housing-homelessness, multiple moves, or living with others and not paying rent-and childrens subsequent health insurance gaps. Logistic regression was used to adjust for potentially confounding factors. RESULTS Ten percent of children were unstably housed at age 2, and 11% had a gap in health insurance between ages 2 and 4. Unstably housed children were more likely to have gaps in insurance compared to stably housed children (16% vs 10%). Controlling for potentially confounding factors, the odds of a child insurance gap were significantly higher in unstably housed families than in stably housed families (adjusted odds ratio 1.27; 95% confidence interval 1.01-1.61). The association was similar in alternative model specifications. CONCLUSIONS In a US nationally representative birth cohort, children who were unstably housed at age 2 were at higher risk, compared to their stably housed counterparts, of experiencing health insurance gaps between ages 2 and 4 years. The findings from this study suggest that policy efforts to delink health insurance renewal processes from mailing addresses, and potentially routine screenings for housing instability as well as referrals to appropriate resources by pediatricians, would help unstably housed children maintain health insurance.

The Economics of Liability Insurance

This chapter examines key elements of the liability system in the USA: the basic theory on the role of liability rules in providing incentives for loss control; the effects of limited liability on the demand for liability insurance and on the ability of tort liability to provide optimal incentives; the problem of correlated risk in liability insurance markets; issues in liability insurance contract design; and the efficiency of the US tort liability and liability insurance system. The troublesome areas of medical malpractice, directors’ and officers’ liability and general liability insurance crises are highlighted.