Category Archives: Public Policy

Hurricane Katrina and the Great New Orleans Flood

Here is a collection of readings that I have been wading through (pardon the pun) in order to try to gain some perspectives on the tragedy that we see unfolding in the Gulf Coast generally and in New Orleans in particular:

1. Katrina, Cost-Benefit Analysis, and Terrorism, by Richard Posner, Senior Lecturer in Law, University of Chicago.
2. Major Disasters and the Good Samaritan Problem, by Gary Becker, 1992 Nobel Laureate in Economics, Professor of Economics at the University of Chicago and Senior Fellow at the Hoover Institution, Stanford University.
3. Rebuilding New Orleans — and America, by Thomas Sowell, Rose and Milton Friedman Senior Fellow, The Hoover Institution, Stanford University.
4. A Fuller Picture: Beginning to understand what we are seeing in New Orleans, by Michael Novak, George Frederick Jewett Scholar in Religion, Philosophy, and Public Policy at the American Enterprise Institute.

In retrospect, it would appear that the man-made aspects of the disaster are by far and away much worse than the storm itself.  The initial damage report from risk modeling firm Risk Management Solutions (RMS) was $20–$35 billion.  Later that same day (September 2), the levees failed in New Orleans and RMS immediately revised its estimate to $100 billion.  On September 7, the Wall Street Journal published a page 1 article entitled “First Estimates on Katrina Costs For Washington Hit $200 Billion”.  The biggest long term problem (at least from a loss prevention standpoint) has been a chronic underinvestment in levee protection for most of the history of the city of New Orleans.  Interestingly (as noted in John Berlau’s piece entitled Greens vs. Levees), the Army Corps of Engineers was sued sometime back in the mid-90’s in order to prevent them from raising and fortifying Mississippi River levees.  The Corps’ rationale for this project at the time was that it was needed “…because a failure could wreak catastrophic consequences on Louisiana and Mississippi which the states would be decades in overcoming, if they overcame them at all.”

Late today (September 8), Congress approved $51.8 billion in emergency spending to pay for Hurricane Katrina recovery efforts, and thankfully this will be directed through channels other than Louisiana public officials (see Congressman Tom Tancredo (R-CO)’s letter to Speaker Dennis Hastert (R-IL) on the problem of public corruption in Louisiana).

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The Link between Credit Scores and Insurance Rates

The importance of  good credit is well recognized within the financial planning community. Access to funds for essential purchases like a home or a car comes faster and cheaper to those with an established track record of prompt loan repayment. Lesser known: home and auto insurers have long utilized information from credit reports to underwrite policies without permission from the customer. Insurance companies are given this authority under the Fair Credit Reporting Act.

The insurance industry believes in a strong correlation between an individual’s credit score and their risk as an insured.  In March 2003, the University of Texas and the Bureau of Economic Research released a report confirming this strong relationship. There are far reaching implications that will be discussed in this weblog entry.

The data produced by the University of Texas is compelling. The study factored out losses explained under existing underwriting variables such as age, geography and type of car. The 10 percent of policyholders with the lowest credit scores had loss ratios (the ratios of losses to premiums) about 53 percent higher than expected. The 10 percent of policyholders with the highest credit scores had loss ratios about 25 percent lower than expected.

Almost all auto insurers — 92 of 100 polled in a recent survey by the research firm Conning & Co. — are now using credit information to decide whether to issue a policy on a  car and/or home. Notably, only 14% use it to when policies come up for renewal.

The Texas insurance industry mirrors the national data. The vast majority of auto insurers in Texas utilize credit information and about 40 home insurers do as well. The latter group includes the Lloyds associations of Allstate, Nationwide, Travellers and USAA Lloyds.  State Farm will join this group in January. At that point, virtually all home insurance underwriting in Texas will utilize credit information.

For most drivers and homeowners, credit scoring saves money when it used to set rates. Up to two thirds of policyholders have lower premiums because of their good credit records. Those premiums can  be 30% lower than poorer credit risks. 
The individual clearly has an incentive to   insure that his credit score is accurate. Under the Fair and Accurate Credit Transactions Act of 2004, consumers are entitled to a free report each year from the three major credit bureaus – Equifax (800-525-6285) , Experian (888-397-3742) and TransUnion (800-680-7289). Consumers should verify that no adverse event has been improperly entered on their record.

Apart from determining accuracy of credit rating, the consumer should try to improve their rating. Insurance companies do not rely explicitly on a credit score. Rather, they cull data from the credit report to construct a proprietary insurance rating. Progressive insurance has listed pros and cons of credit information that factor into the company’s insurance score. The positives are:

  • Long-established credit history 
  • No late payments 
  • No past due credit card accounts 
  • Low use of available credit

While the negatives are

  • Numerous past-due payments 
  • Recent past-due installment loan payments 
  • High use of available credit

For those insured that suffer an adverse action as a result of a negative credit rating, one reasonable response is to raise one’s deductible. It costs an insurance company $200 to $400 to investigate each claim. The consumer can capture some of this value by setting the claim threshold higher. In addition, electing a high deductible signals his insurer that he is unlikely to make a claim and is a better than average risk.

There is a social dimension to the use of credit scores. Lower credit scores are distributed disproportionately among lower income individuals and minorities. This finding was recently reaffirmed by the University of  Texas study.  The Austin-based consumer advocacy organization, the Center for Economic Justice, maintained the study results “confirm what CEJ has been saying for years – that insurance credit scoring causes higher insurance rates for low-income and minority consumers”.

In fact, there has been legislation enacted at the state level to regulate the use of credit in insurance underwriting. Use of credit information in insurance has generated significant public policy debate in more than 40 states during the past few of years.

The National Council of Insurance Legislators (NCOIL) has developed a model law to insure the protection of consumer rights subject to the vagaries of credit reporting. Texas has adopted all five of its major provisions. Those include

1) prohibitions on the use of race, income, or lack of a credit card as a factor in underwriting insurance
2) in the event of an error in credit information, the insurer must rerate the customer within 30 days
3) customers must be told on their insurance application if credit information will be used
4) in the event that an insurer takes an adverse action against an existing or potential customer, the insurer will provide the underlying reasons for the action
5) all insurers using credit information will file their proprietary scoring methodologies with the Texas Department of Insurance.

The insurance commissioner in Texas has taken the position that credit scoring does not constitute explicit discrimination against a protected class. No administrative action has been undertaken action against insurers beyond what the legislature has adopted. The current regime seems to be working. The number of complaints regarding credit scoring in Texas insurance markets have been low – averaging 300 per year over an insurable base of 10,000,000.

However, some states have gone beyond the adoption of the model law. Maryland, for example, has banned the use of any credit information in the underwriting of homeowners insurance. California insurers are prohibited by Proposition 103 from using credit for auto insurance policies. The state’s insurance commissioner has effectively extended the ban to homeowners insurance as well.

The insurance industry is about 100% in favor of the credit scoring –  believing that it leads to more efficient allocation of risk. Their position was summarized in an industry editorial published in the Austin American-Statesman earlier this year: “Insurers use credit scores not only because of their accuracy, but because they are totally objective and focus solely on a person’s verifiable credit history. Furthermore, they are “colorblind” and income neutral because race and income are not used.”

As a practical matter, credit scores are likely to become an even more relevant variable in the insurance industry.  As insurers hone their models, they will likely create additional risk classes that favor the frugal. Good credit will not only invite lower borrowing costs but lower insurance premiums as well.”

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Competition, Regulation and Insurance

In the current Texas legislative session, Senate Bill 249 and House Bill 1532 would, among other things, eliminate competition as a factor in determining whether medical malpractice insurance rates are excessive (and therefore subject to regulation by the Texas Department of Insurance).  As I have previously noted in “Insurance Reform in the State of Texas“, the notion that insurance rates ought to be regulated by regulatory fiat rather than competitive markets is somewhat peculiar.  In the United States and most other developed economies, insurance regulation typically involves the monitoring of solvency and market conduct, and to a lesser extent, the regulation of insurance rates.  Historically, Texas has been one of the more aggressive regulatory domiciles with respect to rate regulation, so from this perspective it may not come as that much of a surprise that our legislators are currently debating this issue.

In the economics literature, arguments in favor of rate regulation typically rely upon the existence of monopoly or some form of market failure.  Neither argument is particularly compelling in the case of the insurance business.  Indeed, Epstein (1999) notes that the setting in which the case for introducing rate regulation is at its low ebb is in the market for insurance.  Furthermore, there is a substantial literature on the economic consequences of competition and regulation for the performance of insurance markets.  In what follows, I will briefly review some stylized facts concerning the medical malpractice insurance crisis, summarize the theory and empirical evidence concerning the economics of insurance regulation, and finish with some concluding remarks.

The Medical Malpractice Insurance Crisis

It is important to put the recent affordability and availability “crisis” in medical malpractice insurance into a broader perspective; specifically, this crisis was a national as well as local phenomenon.  Premium increases (adjusted for inflation, particularly for internists, general surgeons and OB/GYN’s) have accelerated in recent years, while capacity has diminished (e.g., exit from this market by major firms such as St. Paul Co.).  This most recent crisis followed an unusually long period of flat or modest premium increases and widespread availability, which in turn followed severe crises of insurance affordability in the 1980’s and of affordability and availability in the mid-1970’s.

Responses to this and previous crises in medical malpractice insurance have included various public policy responses, including things like tort law reforms designed to reduce the level and unpredictability of claims; e.g., caps on awards for non-economic damages, formation of alternative markets, and regulatory reforms.   Given the market evidence (e.g., moderating prices, more competition, and greater availability), it would appear that these reforms have worked in the sense that the most recent crisis has clearly abated.

Economics of insurance regulation

The public interest view of regulation is that explicit regulation should be applied only in cases where market conditions deviate significantly from the ideal of a competitive market; i.e., a market that is characterized by the existence of many buyers and sellers, where firms can freely enter and exit.  Even if markets are relatively concentrated, so long as they are contestable, then this notion still applies (e.g., the operating system software market, though dominated by Microsoft, is contestable (e.g., Linux, Mac OS X)).

The public interest perspective has important implications for insurance rate regulation.  Specifically, it implicitly recognizes that rates cannot be excessive if markets are sufficiently competitive or contestable.   In other words, if the market is either competitive or contestable, then this constitutes a sufficient condition for rate fairness.  To claim that rates are excessive when markets are competitively structured represents a reductio ad absurdum argument.

George Stigler’s “capture” theory (i.e., the notion that regulators are at risk of being “captured” by either the industry they regulate or other third parties whose self interests may be at odds with industry) describes well the historical record of insurance regulation.  During the early to mid 20th century, insurance rates were typically regulated out of the stated concern that insurers might be motivated to cut prices to unsustainably low levels as a way to acquire market share.  If this were the case, then such pricing behavior could trigger insurance insolvencies.  The empirical reality, at least during this earlier period of insurance regulation, was that rate regulations were implemented so as to make it possible for insurers to earn excess rates of return by charging excessive rates.  In recent years, however, the pendulum has generally swung more toward rate suppression.  The “special interests” that benefit from rate suppression include regulatory agencies, lawyers, consultants, and consumer groups.

The economic theory and corresponding empirical evidence pertaining to insurance regulation clearly demonstrates that it cannot possibly be in the public interest to eliminate competition as a factor in rate making.  A recently published book entitled “Deregulating Property-Liability Insurance: Restoring Competition and Increasing Market Efficiency” (see AEI-Brookings Joint Center for Regulatory Studies (2002)) notes that property-liability insurance regulation generally makes consumers worse off by limiting availability of coverage, reducing the quality and variety of services available in the market, inhibiting productivity growth, and increasing the volatility of insurance prices paid by consumers.

Concluding Remarks

In a free market economy, capital is allocated to its most highly valued use; therefore, if one state suppresses rates, then companies are free to go elsewhere.  Limiting exit rights (e.g., as has occurred in states such as Massachusetts and New Jersey in response to crises in these states’ auto insurance markets) is both unfair and counterproductive, and measures like these do not make insurance any more affordable or available in the long run.

Once we eliminate the competitive market as a regulator, we must rely upon the insurance regulator to “stand in the gap”.  If the insurance regulator is benevolent and wishes to maximize social welfare, then this individual will recognize that he or she has the very difficult task of mimicking what might otherwise occur in a competitive market environment.  However, the empirical evidence generally suggests that regulators are subject to political pressures from interest groups and therefore are not likely to be benevolent central planners.  Depending upon the political equilibrium that obtains, this may result in excess profits or losses for the regulated industry.  In the current political environment in Texas and many other states, one would expect that this equilibrium will most likely continue to be characterized by the suppression of rates.

In conclusion, removing competition as an objective method for benchmarking whether a rate is fair takes us onto a public policy slippery slope.  The economics of such a position are fundamentally unsound.  Furthermore, this position has virtually no precedent in the theory and practice of insurance regulation, and it unnecessarily subjects policyholders to the risks of “unintended” consequences.  Past experience with insurance regulation suggests that these “unintended” consequences imply that even more availability and affordability problems may be on the horizon.


References

AEI-Brookings Joint Center for Regulatory Studies, 2002, Deregulating Property-Liability Insurance: Restoring Competition and Increasing Market Efficiency, edited by J. D. Cummins, American Enterprise Institute Press.

Epstein, R., 1999, “Exit Rights and Insurance Regulation: From Federalism to Takings”, George Mason Law Review, Vol. 7, No. 2, 293-311.

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Tax compliance costs and related issues

It is well known that the U.S. income tax system has enormous compliance costs.  Economists generally view compliance costs as the sum of direct payments made to tax lawyers and tax accountants for tax-related services plus the opportunity cost of time spent by everyone else.  Everyone else basically includes firms and individuals who complete their own tax forms and deal directly with the IRS with respect to tax audits and litigation (rather than employ tax professionals to do the “dirty work” for them). A cursory survey of the tax compliance literature yields estimates (based upon this specific compliance definition) ranging from $200 to $300 billion, or approximately 1.7 to 2.5% of GDP. 

In 2002, it is estimated that individuals, businesses and non-profits spent 5.8 billion man-hours complying with the federal income tax code, which is the financial equivalent of imposing a 20.4-cent surcharge for every dollar that the income tax system collects.  Apparently it is quite expensive to figure out what taxable income actually is.  This is not surprising in light of the substantial and growing complexity of the Internal Revenue Code.  The number of words in the Internal Revenue Code that specifically address the topic of income taxation has grown from 172,000 words in 1955 to 982,000 by 2000, an increase of 472 percent. Income tax regulations, which provide taxpayers with the “guidance” they need to calculate their taxable income, have grown at an even faster pace from 572,000 words in 1955 to 5,947,000 words by 2000, an increase of 939 percent. Combined, the federal income tax code and regulations grew from 744,000 words in 1955 to 6,929,000 by 2000—an increase of 831 percent.  (Source: “The Cost of Tax Compliance”).

Interestingly, the CNNMoney website published an article yesterday that points out another yet another important cost related to the current U.S. income tax system that is of a similar order of magnitude as the cost of compliance.  This relates to the cost of noncompliance.  Preliminary findings from a recently published IRS study show that the gap between what’s owed and what’s actually paid is between $257 billion and $298 billion (see the article entitled  “Taxpayers stiff IRS by nearly $300B”).  So let’s summarize.  The current U.S. income tax system has substantial transactions costs (1.7 to 2.5% of GDP) and at the same time produces a net shortfall of tax revenues to the government of a similar order of magnitude (i.e., an additional 2.1 to 2.5 percent of GDP).  Relative to the amount of money actually collected by the IRS, these costs total around 40%.

In the risk management literature, it is well known that the asymmetric nature of the corporate income tax creates incentives for firms to prefer hedging over retaining risk.  Tax asymmetries derive from two important features of the corporate income tax; specifically, tax rate progressivity and incomplete tax loss offsets.  Thus the incentives conveyed by the manner in which the tax system is structured creates yet another cost; specifically, firms and individuals have a tendency to underinvest in risky (but potentially profitable) assets, which in turn limits the economy’s prospective growth potential.   Thus the current U.S. income tax system gives rise to underinsvestment problems in the economy and is also very costly to administer.

Clearly, very powerful vested economic interests (with lots of money to “invest” in lobbyists) prefer the status quo, so it will be interesting to see whether Congress is able to reform the tax system such that administrative costs are substantially reduced and economic incentives with respect to risk bearing are less distorted.  Most of the proposals (e.g., a “flat” income tax or a consumption tax) that are on the table presently have the potential (at least in theory) to accomplish both of these goals, which in turn would bode well for the future growth and competitiveness of the U.S. economy.

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Some thoughts concerning the economics of the “Loser Pays” rule

It is widely believed that the U.S. tort system needs to be reformed in order to ensure that the U. S. remains globally competitive.  Of course, this begs the obvious policy question: what kinds of reforms are likely to be most effective without significantly compromising beneficial aspects of the tort system?  One reform proposal which has been debated for quite some time involves requiring that the loser reimburse the winner’s legal fees. The rationale for “Loser Pays” is that it would likely have the effect of reducing the number of cases brought to court (along with the associated legal expenditures).  Other legal systems (such as exist in the U. K. and throughout most of Europe) typically require losers to compensate winners for a portion of their legal costs, and the evidence appears to suggest that such rules do in fact reduce the frequency of litigation and related expenses.

The economics of “Loser Pays” compared with “Loser Doesn’t Pay” would appear to be fairly straightforward.  Under the “Loser Doesn’t Pay” that is actually practiced in the U.S., the payoff from litigation resembles a call option.  From the plaintiff’s perspective, downside risk is limited to the option premium, which comprises the legal costs (if any) that are directly borne by the plaintiff.  Although the plaintiff will typically share upside risk (in the form of contingency fees), her payoff is not bounded from above.  Since the plaintiff does not fully internalize the cost of litigation, this creates an apparent moral hazard.  By linearizing the payoffs from litigation so that the plaintiff bears downside as well as upside risk, one would expect that such a rule would likely reduce the frequency and expense of litigation, a result that is corroborated by Baye, Kovenock, and de Vries (2004) in an auction-theoretic framework.

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Insurance Reform in the State of Texas

Starting today, the state of Texas will be taking a sorely needed step in the direction of more competitive insurance markets by reforming insurance regulation. The specific reform involves the adoption of an alternative rate regulation protocol known as “File and Use” in place of “Prior Approval”. Under Prior Approval, insurers must submit information concerning the rates they wish to charge to the state insurance regulator and get these rates formally approved prior to their use. While the File and Use protocol requires that rate information be submitted to the state insurance regulator, the submitted rates do not require formal regulatory approval.[1]

As an applied economist, I candidly find the notion that insurance rates ought to be regulated by regulatory fiat rather than competitive markets to be somewhat peculiar. In the economics literature, typical arguments for regulation of prices rely upon the existence of monopoly or some form of market failure. In the case of the insurance business, neither argument is particularly compelling. If anything, a more compelling argument is that society is better served by relying upon competitive markets rather than regulatory fiat. Anyway, in what follows, I will sketch some of the public policy issues that are at play in this particular insurance reform.

1. Theory of price regulation[2]

According to George Stigler, public price control has two aspects:

1. Correction of monopolistic pricing (e.g., most public-utility regulation in the United States).

  • By granting firms monopoly licenses in various local domiciles, policymakers are hoping to take advantage of economies of scale in production. If there are scale economies, monopolists will face significantly lower costs of production on a per unit basis than will firms competing with each other in a competitive market environment.
  • This is a “have your cake and eat it too” strategy. Without price regulation, the benefits of these scale economies would naturally accrue to the owners of such firms. However, price regulation is imposed so that benefits accrue instead to consumers in the form of lower prices.
    • Ideally, the objective is to regulate rates so that the firm still earns a “fair” return while providing the scale economies which lead to lower consumer prices.
    • The “fair” return standard was set by a U.S. Supreme Court case which was argued in 1943 and decided in 1944 (Federal Power Commission et al. v. Hope Natural Gas Co.).
    • By providing a “fair” return, the government does not violate the “Takings” clause of the U.S. Constitution (the last clause of the 5th amendment, which reads, “nor shall private property be taken for public use, without just compensation”).

2. Provide private benefits at public expense to special interest groups.

  • Prices of farm products are regulated (raised) in most nations with the intention of improving farmers’ incomes.
  • Prior to the deregulation of the banking industry more than twenty years ago, the fixing of interest rates paid by banks was undertaken to improve bank earnings.
  • Such policies are invariably defended on various economic and ethical grounds but reflect primarily the political strength of large and well organized interest groups.

There are no natural scale economies in the production of insurance services. This is a fact that is well documented by at least two generations of rigorous empirical research. Therefore, it would appear that Stigler”s second rationale better fits the case of insurance. Originally, insurance rate regulations were imposed because there was a stated concern that insurers might be motivated to cut prices to unsustainably low levels as a way to acquire market share. Therefore, it would seem that price regulations were initially intended to benefit producers of insurance services by providing excess rates of return on their investments in the insurance business. The argument here is that such groups were successful in coalescing and bringing political pressure to bear on the regulatory authorities to produce such an outcome. This idea of regulatory “capture” was quite insightful and profound, and it (among other things) helped Stigler win the Nobel Prize in 1991.

In recent years, however, the pendulum has swung in such a way that rate suppression (as opposed to expansion) has become more the rule rather than the exception. The special interests here include regulatory agencies, the plaintiff”s bar, and consumer groups.[3] Economic theory suggests that over time, persistent regulatory suppression of insurance rates will likely cause product quality to deteriorate and limit insurance availability as insurers seek opportunities to exit the market (sound familiar?).

2. Empirical evidence on the effects of rate regulation[4]

Previous studies (using U.S. and Canadian data) have found that rate regulation:

  • reduces competition,
  • reduces availability of coverage, and
  • increases volatility of insurance premiums.

Competition is reduced by prior approval regulation because the ability to compete on price is by definition (arbitrarily) limited by the state. Availability is reduced by prior approval regulation because this form of rate regulation tends toward rate suppression; since one cannot earn a fair return in a rate-suppressed environment, there is little incentive to expand one”s business of writing insurance policies! Finally, increased volatility in insurance premiums likely results from delays in the rate approval process under prior approval rate regulation. Regulatory lags typically produce lower rate increases during periods of rapid cost growth and larger rate increases or a slower rate of reduction in periods of stable or declining claims costs (see Harrington, 2001 AEI-Brookings, available at http://www.aei-brookings.org/admin/authorpdfs/page.php”id=48).

The state of Illinois is unique because it does not have any formal rate regulation of automobile insurance rates whatsoever. Steve D’Arcy notes that the Illinois auto insurance market is amongst the most competitively structured insurance markets in the U.S. economy.[5] He finds that insurer loss ratios and premiums are less volatile than in regulated markets, and premium levels tend to be lower than in comparable areas. Illinois also boasts the lowest percentage of uninsured drivers, one of the lowest residual market shares, and lowest costs of insurance regulation in the entire U.S. economy.

3. Texas has a longstanding reputation for suppressing auto insurance and workers compensation rates

Although the Kramer study cited below is obviously dated, its findings are qualitatively consistent with Texas”s longstanding reputation of persistent regulatory suppression of insurance rates.

Kramer (1991) Study Rate Suppression States
Private Automobile Insurance Workers’ Compensation Coverage
Delaware Alabama New Hampshire
District of Columbia Arkansas New Mexico
Louisiana Florida North Carolina
Massachusetts Georgia Oregon
Nevada Iowa Pennsylvania
New Hampshire Kansas Rhode Island
New Jersey Kentucky South Carolina
Pennsylvania Louisiana South Dakota
Rhode Island Maine Tennessee
South Carolina Massachusetts Texas
Texas Mississippi Vermont
Missouri Virginia
Nebraska

Source: Kramer, S. Rate Suppression and Its Consequences. New York: Insurance Information Institute Press, 1991.


[1]For a more detailed explanation and analysis of insurance rate regulation, see the recently published Insurance Information Institute white paper entitled Rates and Regulation, available on the web at http://www.iii.org/media/hottopics/insurance/ratereg/.

[2]This section elaborates primarily upon George Stigler”s excellent essay entitled “Economic Theory: Price”, available online at http://www.britannica.com/nobel/macro/5001_98_11.html, and applies his insights to an analysis of the insurance industry in particular.

[3]The cynical view here is that by suppressing rates, regulatory agencies are given more work to do, which enables them to expand their staffing and overall influence. The plaintiff”s bar likes rate suppression because this process renders the insurance ratemaking process into a very opaque and largely unintelligible process which makes it all the more difficult for consumers to discern the relative magnitude of the impact that the U.S. civil justice system has upon insurance rates. The reason why consumers” groups prefer low rates should be apparent, but an often overlooked second order effect derives from that fact that many of these groups are funded primarily by plaintiff”s attorney associations (e.g., Ralph Nader”s Public Citizen group is known to receive as much as 2/3 to 3/4 of its funding from plaintiff”s attorneys).

[4]For more detailed information concerning empirical evidence on the effects of rate regulation, see the recent working paper by Leadbetter, D., J. Voll, and E. Wieder, 2004, The Effects of Rate Regulation on the Volatility of Auto Insurance Prices: Evidence from Canada, presented at the 38th Annual Meeting of the Canadian Economics Association, June 2004, Ryerson University, Toronto, Ontario (available at http://economics.ca/2004/papers/0007.pdf).

[5]See D’Arcy, Stephen P., 2001, “Insurance Price Deregulation: The Illinois Experience”, paper presented at the Brookings Institution Insurance Rate Regulation Conference (January 18, 2001).

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