Date of this Version
The Journal of Risk and Insurance
Whereas the literature evaluating the effect of tort reforms has focused on the impact of reforms on insurers' reported incurred losses, this article examines the ultimate effects of reforms using the developed losses from a comprehensive sample of insurers writing medical malpractice insurance from 1984 to 2003. Noneconomic damages caps are particularly influential in reducing medical malpractice losses and increasing insurer profitability. The long‐run effects of these reforms are greater than insurers' expected effects; for example, 5‐ and 7‐year developed loss ratios are below the initially reported incurred loss ratios for those years following the enactment of noneconomic damages caps. Analyses of reported losses consequently understate the ultimate effects of tort reforms. The quantile regressions show that reforms have the greatest effects for the firms that are at the high end of the loss distribution.
This is the pre-peer reviewed version of the following article: [Born, P., Viscusi, W.K., & Baker, T. The Effects of Tort Reform on Medical Malpractice Insurers' Ultimate Losses. The Journal of Risk and Insurance 76, no. 1: 197-219], which has been published in final form at http://dx.doi.org/10.1111/j.1539-6975.2009.01294.x.
This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving: https://authorservices.wiley.com/author-resources/Journal-Authors/licensing-open-access/licensing/self-archiving.html.
Born, P., Viscusi, W., & Baker, T. (2009). The Effects of Tort Reform on Medical Malpractice Insurers' Ultimate Losses. The Journal of Risk and Insurance, 76 (1), 197-219. http://dx.doi.org/10.1111/j.1539-6975.2009.01294.x
Business Administration, Management, and Operations Commons, Business Law, Public Responsibility, and Ethics Commons, Business Organizations Law Commons, Health and Medical Administration Commons, Insurance Commons, Medical Jurisprudence Commons
Date Posted: 26 June 2018
This document has been peer reviewed.