Distributing Risk: Insurance, Legal Theory, and Public Policy
In this pioneering book, Kenneth Abraham examines the theoretical foundations and public policy implications of modern American insurance law. Using the insights of recent developments in economic analysis of law and moral theory, he explores the ways in which insurance can help to reconcile the competing values of individual responsibility and collective risk sharing at the heart of the American political system.In the first part of the book, Abraham analyzes the purposes and practice of insurance law from the standpoint of economic analysis, looks at the moral issues of risk distribution involved, and discusses the role of the major insurance law-making institutions-the courts, state legislatures, and state insurance commissioners-assessing their competence to perform this function. He then investigates a series of problems regarding insurance that have both theoretical and practical implications. These include the use of insurance to promote safety, as, for example, in disposing of toxic waste; discrimination in insurance through risk classification, by, for example, sex or past accident experience; and multiple policies to cover a single loss. In his concluding chapter Abraham assesses this way of looking at insurance and makes some predictions about the future of insurance. An unusual work, the book explores a subject about which most laypeople and even lawyers know very little in order to show how the tension between individual responsibility and collective risk sharing so central to the American political and ethical system is played out in this field. In doing this it brings the problems of insurance and insurance law into the mainstream of debate about public policy at the end of the twentieth century.