Claims‐Made and Reported Policies and Insurer Profitability in Medical Malpractice
AbstractThe liability crisis of the 1970s led to the introduction of a new type of insurance policy designed, according to Doherty (1991), to reduce the un-diversifiable uncertainty associated with writing long-tail liability lines. These new claims-made and reported policies gained favor in place of the traditional occurrence coverage in the early eighties not only in medical malpractice, but also in the general liability arena. Under occurrence coverage, a loss incurred in a given year is covered by the contract for that year, regardless of when the claim is reported. In contrast, a claims-made policy pays only the claims reported in the policy year. Our paper presents a structure, conduct, and performance analysis Ã la Joskow (1973) of the medical malpractice insurance industry by focusing on the differences between the two contracts. The main question we want to address is why there are two types of contracts that cover the same risk exposure in the medical malpractice insurance industry whereas in other lines of insurance, only one exists primarily. La crise de la responsabilitÃ© civile des annÃ©es 70 a menÃ© Ã la crÃ©ation dâun nouveau type de contrat dâassurance qui avait pour but, selon Doherty (1991), de rÃ©duire le risque systÃ©matique associÃ© aux polices dâassurance Ã longue durÃ©e. Ces contrats CMR (Claims-Made and Reported) ont obtenu la faveur du public dans les annÃ©es 80 particuliÃ¨rement pour ce qui est de lâassurance de la responsabilitÃ© civile des professionnels de la mÃ©decine. Nous prÃ©sentons ainsi une Ã©tude de la structure et de la performance de lâindustrie de lâassurance de la responsabilitÃ© civile des professionnels de la mÃ©decine en mettant en relief les deux types de contrats dans ce marchÃ©. La question Ã laquelle nous voudrions ultimement rÃ©pondre est la suivante : pourquoi dans le marchÃ© de lâassurance de la responsabilitÃ© civile des professionnels de la mÃ©decine retrouvons-nous les deux types de contrats alors quâ
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Bibliographic InfoArticle provided by The American Risk and Insurance Association in its journal The Journal of Risk and Insurance.
Volume (Year): 78 (2011)
Issue (Month): 1 (03)
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- Patricia Born & M. Martin Boyer, 2008. "Claims-Made and Reported Policies and Insurer Profitability in Medical Malpractice," CIRANO Working Papers 2008s-13, CIRANO.
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