Shook, Hardy & Bacon Public Policy co-chair Victor Schwartz and Public Policy associate Chris Appel authored a May 3, 2016, Law360 article about the upcoming commentary from Yale Law School professor and insurance law and policy expert George L. Priest. Priest’s article, titled “A Principled Approach to Insurance Law: The Economics of Insurance and the Current Restatement Project,” scrutinizes the American Law Institute’s (ALI) Restatement of the Law of Liability Insurance (RLI) project. Schwartz and Appel outline Priest’s most poignant observations as they relate to the RLI.
The authors note, “Professor Priest’s fundamental criticism of the RLI project is its failure to recognize just how vital, from an economic and public policy perspective, it is to develop insurance law rules with an eye towards promoting greater availability of insurance.” The article provides three methods for “maximizing the availability of liability insurance,” including, “aggregation of risks, segregation of risks and controlling moral hazard”.
Schwartz and Appel conclude that Professor Priest’s observations show that the RLI project “has its priorities misplaced,” thus creating a negative long-term impact on all policyholders and that the main focus, as presented by Professor Priest, should be to “develop provisions that maximize the availability of insurance.”