Brenda Wells

Claims Adjudication in the Personal Automobile Insurance Residual Market

Government high-risk insurance plans vary in terms of structure and operation. In automobile insurance, most states have an assigned risk plan (ARP), while a few have a joint underwriting association (JUA). ARPs and JUAs are similar in their purpose: to provide state-mandated automobile insurance coverages to high-risk drivers. They are, however, fundamentally different in their structure and operation. This article analyzes the differences in claims payment practices between these two forms of automobile residual market facility used in the United States. This study predicts that, due to differences in incentives, JUAs result in higher claims payments on the part of insurers. The empirical results are consistent with the prediction.

Improving Perceptions of the Insurance Industry: The Influence of Insurance Professionals

The “talent crisis” in the insurance industry is well documented. Solutions to this crisis, however, are not plentiful. One of the major challenges faced by the industry is its reputation. We hypothesize that opinions of the industry can be changed through brief but specific education efforts. We test our hypothesis at a major university and find very strong support for our hypothesis.

Pharmaceutical Product Development and Liability with Chantix®: A Teaching Case

In 2006, Pfizer introduced Chantix® to the American medical marketplace. Touted as an effective tool for smoking cessation, the drug experienced first-year sales of just under

Free Cash Flow in the Life Insurance Industry

900 million. With smokers costing employers thousands of dollars more each year than nonsmokers, and with public pressure to give up cigarettes, many embraced Chantix® as a miracle drug. What many did not understand was that the drug was rushed to market before extensive testing and clinical trials could be conducted to prove its safety for a wide variety of users, especially those with psychiatric conditions. This case tells the story of Chantix®: how it works, how it came to market, and the more than 2,700 lawsuits that were filed as a result of injuries claimed to be caused by the drug. Students are given the opportunity to consider the ramifications of risk management decisions made throughout the development and marketing of the drug, as well as how litigation involving the medication might have been handled.