Tort Reform Works: In the past two elections, Ohio has voted pro-tort reform candidates into office- including judges who believe the job of the court is to uphold the law rather than act as an instrument of social justice (and by that I mean they aren't likely to find that tort reform legislation is unconstitutional.).
It's working.
It probably has more to do with rising interest rates than tort reform. (Insurance companies make their money by investing premiums in things like government bonds, which are highly dependent on the fed funds rate.)
ReplyDeleteBen you are correct that the rising market is helping, but I don't think it explains much of the difference in rate increases over the past five years vs this year. For the rising-interest-rate arithmetic to fully explain what happened, the amount of premium invested would have to be something like 6 or 7 times the annual premium. That's not likely.
ReplyDeleteTo establish whether tort reform is working, one must determine whether there is less claim expense emerging now vs before.
To make that statistical determination more than one or two years' data are needed. So I think it's too early to tell - - even though the early indications look very good.
John Fembup