Escaping from the State? Historical Paths to Public and Private Insurance

The history of insurance has been characterized in most countries by the coexistence of a wide range of organizational forms. The reasons for this plethora of vehicles remain unclear, as does the impact of this diversity on the development of insurance around the world. Drawing on the latest research, this paper examines, first, the different functions of the state in relation to insurance in a wide range of national markets from the early modern period to the present century; second, the path-dependent effects that determined the historical distribution of public and private forms of insurance; and third, the relation between public and private insurance and its impact on market development

FULL COMPENSATION OF VICTIMS OF CROSS-BORDER ROAD TRAFFIC ACCIDENTS IN THE EU: THE ECONOMIC IMPACT OF SELECTED OPTIONS

Abstract: Cross-border road traffic accidents raising jurisdictional issues represent about 1% of road traffic accidents in the EU27. The direct costs of these accidents can be set at approximately \u20ac450 million yearly, of which \u20ac150 million are due to medical expenses and damage to property, whereas \u20ac300 million represent loss earnings and foregone production. If one also takes into account the indirect costs of cross-border road traffic accidents, namely the physical and psychological consequences for victims and their relatives, the total economic impact of those accidents amounts to about \u20ac1.04 billion annually. Several cross-border road traffic accidents create a risk of undercompensation of the non-resident victim, due to differences in the standard of living as well as in the calculation of the quantum of damages in member states. The problem of victims\u2019 undercompensation in the event of a cross-border traffic accident has so far been approached mostly under the aegis of the proposed harmonisation of European Tort Law, especially within the debate on the \u201cRome II\u201d regulation on non-contractual obligations. Already during first reading, the European Parliament proposed to address this issue by mandating the application of the law of habitual residence of the victim when assessing the quantum of damage awards

\u27How\u27s My Driving?\u27 for Everyone (and Everything?)

This is a paper about using reputation tracking technologies to displace criminal law enforcement and improve the tort system. The paper contains an extended application of this idea to the regulation of motorist behavior in the United States and examines the broader case for using technologies that aggregate dispersed information in various settings where reputational concerns do not adequately deter antisocial behavior. The paper begins by exploring the existing data on “How’s My Driving?” programs for commercial fleets. Although more rigorous study is warranted, the initial data is quite promising, suggesting that the use of “How’s My Driving?” placards in commercial trucks is associated with fleet accident reductions ranging from 20% to 53%. The paper then proposes that all vehicles on American roadways be fitted with “How’s My Driving?” placards so as to collect some of the millions of daily stranger-on-stranger driving observations that presently go to waste. By delegating traffic regulation to the motorists themselves, the state might free up substantial law enforcement resources, police more effectively dangerous and annoying forms of driver misconduct that are rarely punished, reduce information asymmetries in the insurance market, improve the tort system, and alleviate road rage and driver frustration by providing drivers with opportunities to engage in measured expressions of displeasure. The paper addresses obvious objections to the displacement of criminal traffic enforcement with a system of “How’s My Driving?”-based civil fines. Namely, it suggests that by using the sorts of feedback algorithms that eBay and other reputation tracking systems have employed, the problems associated with false and malicious feedback can be ameliorated. Indeed, the false feedback problem presently appears more soluble in the driving context than it is on eBay. Driver distraction is another potential pitfall, but available technologies can address this problem, and the implementation of a “How’s My Driving?” for Everyone system likely would reduce the substantial driver distraction that already results from driver frustration and rubbernecking. The paper also addresses the privacy and due process implications of the proposed regime. It concludes by examining various non-driving applications of feedback technologies to help regulate the conduct of soldiers, police officers, hotel guests, and participants in virtual worlds, among others

Regulating the Business of Insurance: Federalism in an Age of Difficult Risk

Natural disasters and terrorism events of a massive scale are difficult risks. They are difficult (or, if large enough, impossible) to insure, and they present enormous risk-management challenges. Indeed, we are now in an era when difficult risks are the dominant feature of the risk-management landscape. These kinds of risks are inevitably multi-jurisdictional in nature, and managing them effectively requires a cohesive, comprehensive national catastrophe policy involving ex ante prevention and mitigation measures, effective risk allocation through insurance mechanisms, and ex post victim-compensation strategies. Although our nation is not yet close to establishing a much-needed and increasingly discussed national catastrophe policy, most significant points in current risk management strategies involve significant federal coordination and control. In our judgment, it would be peculiar - and less effective - if ex ante risk-reduction and loss-mitigation strategies and ex post victim compensation programs were the province of the federal government, but risk allocation and distribution decisions that are made in insurance markets were left primarily to the regulatory authority of the states. In other words, we suggest that a regulatory model that defers to the states with respect to the regulation of the insurance aspects of difficult risks is no longer viable, and an enhanced federal role in insurance regulation specifically - and in risk management more generally - is both necessary and appropriate with respect to difficult risks

The Case of SADC

This paper will explore whether and to what extent the (legal) rules of coordination that originated and developed in the EU can be transposed to SADC – a region characterized by high levels of migration, weakly developed social security systems and the absence of suitable portability arrangements. The principle of coordination of social security is primarily aimed at eliminating restrictions that national social security schemes place upon the rights of migrant workers to such social security. One of the fundamental principles of social security coordination is that of portability, which is the ability to preserve, maintain, and transfer vested social security rights or rights in the process of being vested, independent of nationality and country of residence. The best practice around the world to ensure portability of social security entitlements consists of multilateral and bilateral social security agreements. These agreements originated and developed in the EU, and EU coordination arrangements arguably still represent the most sophisticated and developed system of its kind, and one that is worth emulating. In this paper, it is argued that any future attempts at coordinating social security schemes in SADC should start with employment injury schemes, which is the only social security scheme common to all SADC member states. The paper considers some of the issues that should be taken into account in designing social security agreements in SADC along the lines of the EU model