This paper copes with a real-world classification problem related to the management of claims received in an insurance company. The way to obtain the classifier is not easy due to the high amount of missing values as well as the inherent imbalanced scenario within class labels. Once the data partition has been done, the training set is submitted to an intensive double grid search in order to obtain the most promising type of missing value imputation approach and then (...) a step ahead is done using the best method and it starts the next round of data mining strategies which now falls into data rebalancing umbrella. Again, a grid search from an undersampling and oversampling family with different settings is done taking into account only seen data. The training data obtained after the first grid search are now submitted to the second step according the second grid search in order to get the ready training set for the further classifier training. The main objective of the work is to find the best combination of data mining techniques that suits the data set with a pipeline containing two types of data preparation methods coming from different families. As an outcome, first the problem of the presence of missing values has been addressed and then the data rebalancing techniques has been applied. The study focuses on obtaining classifiers based on Bayesian and lazy approaches as well as decision trees, evaluated on metrics such as the area under the ROC curve (AUC), Cohen’s kappa, Accuracy and the F-measure, among others. The imputation by the mean the mode is preferable to the Expectation Maximization Imputation in the scenario faced in this paper taking into account that the amount of missing values is higher than a forty percent for many features. (shrink)

Insurance claim fraud costs insurance companies, policymakers, and taxpayers billions of dollars every year and has been described as the second largest white collar crime. The most common insurance fraud activity and one that contributes a significant portion of dollar losses is the practice of padding claim amounts in the event of a loss. One of the largest issues insurance companies face is that policyholders often do not perceive insurance claim padding as an unethical behavior. (...) However, very little research has examined the factors that contribute to such perceptions. Considering how consumers often attempt to justify fraudulent behavior from a fairness perspective, the present work examines how the amount of the deductible in an insurance claim situation can influence feelings of fairness and ethicality. The results of an experimental study show that higher deductible amounts result in stronger perceptions that insurance claim padding is fair to the insurance company, weaker perceptions that the behavior is unethical, and higher proposed claim award amounts. The study also shows, however, that the deductible amount effects are attenuated for consumers who display higher ethical standards as reflected by their scores on the consumer ethics scale. Implications are discussed with respect to the insurance industry, deviant consumer behavior, and general business ethics theory. (shrink)

Insurance claims fraud receives increasing attention in the insurance industry, in academic studies and in public policy spheres. Claims fraud is variously viewed as an economic-contractual problem, a moral-psychological problem, a moral-sociological problem or a criminal problem. This article discusses these theoretical perspectives on insurance claims fraud and reviews the empirical evidence on its nature and prevalence. Most research concludes that opportunistic soft fraud is more prevalent than planned criminal fraud, and that consumer ethics, (...) attitudes and psychology are important aspects of the insurance fraud problem. On the contrary, much of the policy focus on reducing fraud has been directed toward detecting and criminalizing fraud. In light of existing research, care must be taken in applying these approaches to address soft fraud. Greater focus on the social and psychological dimensions of insurance claims fraud may increase the success of soft fraud prevention and decrease the likelihood that the focus on fraud will impair insurance relationships. Improving such prevention efforts requires a better understanding of the various dimensions of fraud, the determinants of fraud behaviors and the relationship between fraud behavior and the institutional setting. (shrink)

It was proposed that ethical evaluation of insurance claim padding behavior would be affected by characteristics of the policyholder, insurance agent, and company. These three factors were manipulated in written scenarios and the premise was tested in a factorial experimental design. No significant support was found for an effect of any of the three factors on ethical perceptions of claim padding. However, females found claims padding to be significantly less ethical than males. Given a claim scenario where (...) the actual loss was $500 and the claimed amount was $3000, subjects awarded an average of $986.91 on the claim. Many respondents were willing to compensate victims for intangible losses as well as tangible losses. (shrink)

The BP neural network model is a hot issue in recent academic research, and it has been successfully applied to many other fields, but few researchers apply the BP neural network model to the field of automobile insurance. The main method that has been used in the prediction of the total claim amount in automobile insurance is the generalized linear model, where the BP neural network model could provide a different approach to estimate the total claim loss. This (...) paper uses a genetic algorithm to optimize the structure of the BP neural network at first, and the calculation speed is significantly improved. At the same time, by considering the overfitting problem, an early stop method is introduced to avoid the overfitting problem. In the model, a three-layer BP neural network model, which includes the input layer, hidden layer, and output layer, is trained. With consideration of various factors, a total claim amount prediction model is established, and the trained BP neural network model is used to predict the total claim amount of automobile insurance based on the data of the training set. The results show that the accuracy of the prediction by using the BP neural network model to both the data of Shandong Province and to the data of six cities is over 95%. Then, the predicted total claim amount is used to calculate premiums for five cities in Shandong Province according to credibility theory. The results show that the average premium of the five cities is slightly higher than the actual claim amount of the city. The combination of BP neural network and credibility theory can perform accurate claim amount estimation and pricing for automobile insurance, which can effectively improve the current situation of the automobile insurance business and promote the development of insurance industry. (shrink)

Catastrophe insurance differs from regular insurance in that individual claims are correlated and insurers have to pay more clients at once, which creates a liquidity strain. In this paper, I show two related findings: first, that when customers know their claims are correlated, this correlation can cause positive-sloping demand at low prices, and second, that because of this, a catastrophe insurance market can fail. Market failure is a stable equilibrium, which provides a better understanding of (...) the frequent failures in catastrophe insurance markets. (shrink)

Spanish legislation on insurance and reinsurance mediation stipulates that intermediary can only receive commissions and fees for the management of their policies and prohibits any other form of remuneration. However, it is possible that financial intermediaries who manage larger risks wait until the end of the legal deadline to settle with insurance companies. This common practice in the insurance market hides additional remuneration in defiance of the law. It also means that the risk is not covered within (...) the prescribed period and would, involve a commercial payment to the client, and, on the other hand, affect sustainable claims management. (shrink)

The aim of this article is to refute Ronald Dworkin's claim that the provision of an equal opportunity to insure against risks is sufficient to render differences in people's circumstances that are the result of luck consistent with his theory of equality of resources. Section I addresses bad luck in the circumstances of individuals in the form of mental or physical incapacitation resulting from the vicissitudes of nature. Section II addresses bad luck which is the result of the choices of (...) other individuals to give or bequeath. (shrink)

In his final years, Josiah Royce worked to develop his theories of community and interpretation in practical directions. In particular, he developed an account of insurance as a special community of interpretation, and proposed the creation of an international board of insurance as a deterrent for war. Rather than evaluating Royce’s policy recommendations, this paper explores how his conception of insurance clarifies his account of interpretation. For Royce, insurance provides the best model for communal interpretation thus (...) far because an insurer seeks to prevent loss in the face of risky action, in addition to adjudicating between competing claims. This paper concludes with some reflections on how the problem of moral hazard can inform a Roycean conception of philosophy. (shrink)

This article examines life assurance and the politics of ‘big data’ in mid-19th-century Britain. The datasets generated by life assurance companies were vast archives of information about human longevity. Actuaries distilled these archives into mortality tables – immensely valuable tools for predicting mortality and so pricing risk. The status of the mortality table was ambiguous, being both a public and a private object: often computed from company records they could also be extrapolated from public projects such as the census, or (...) clerical records. Life assurance more generally straddled the line between private enterprise and collective endeavour, though its advocates stressed the public interest in its success. Reforming actuaries such as Thomas Rowe Edmonds wanted the data on which mortality tables were based to be made publicly available, but faced resistance. Such resistance undermined insurers’ claims to be scientific in spirit and hindered Edmonds’s personal quest for a law of mortality. Edmonds pushed instead for an open actuarial science alongside fellow travellers at the Statistical Society of London, which was populated by statisticians such as William Farr as well as by radical mathematicians such as Charles Babbage. The article explores Babbage’s little-known foray into the world of insurance, both as a budding actuary but also as a fierce critic of the industry. These debates over the construction, ownership, and accessibility of insurance datasets show that concern about the politics of big data did not begin in the 21st century. (shrink)

Many transgender people need specific medical services to affirm their gender. Gender-affirming health care services may include mental health support, hormone therapy, and reconstructive surgeries. Scant information is available about the utilization or costs of these services among transgender people, which hinders the ability of insurance regulators, health plans, and other health care organizations to plan and budget for the health care needs of this population and to ensure that transgender people can access medically necessary gender-affirming care. This study (...) used almost three decades of commercial insurance claims from a proprietary database containing data on more than 200 million people to identify temporal trends in the provision of gender-affirming hormone therapy and surgeries and to quantify the costs of these services. (shrink)

With their intensive use of data to classify and price risk, insurers have often been confronted with data-related issues of fairness and discrimination. This paper provides a comparative review of discrimination issues raised by traditional statistics versus machine learning in the context of insurance. We first examine historical contestations of insurance classification, showing that it was organized along three types of bias: pure stereotypes, non-causal correlations, or causal effects that a society chooses to protect against, are thus the (...) main sources of dispute. The lens of this typology then allows us to look anew at the potential biases in insurance pricing implied by big data and machine learning, showing that despite utopic claims, social stereotypes continue to plague data, thus threaten to unconsciously reproduce these discriminations in insurance. To counter these effects, algorithmic fairness attempts to define mathematical indicators of non-bias. We argue that this may prove insufficient, since as it assumes the existence of specific protected groups, which could only be made visible through public debate and contestation. These are less likely if the right to explanation is realized through personalized algorithms, which could reinforce the individualized perception of the social that blocks rather than encourages collective mobilization. (shrink)

Many widely divergent accounts of luck have been offered or employed in discussing an equally wide range of philosophical topics. We should, then, expect to find some unified philosophical conception of luck of which moral luck, epistemic luck, and luck egalitarianism are species. One of the attempts to provide such an account is that offered by Duncan Pritchard, which he refers to as the modal account. This view commits us to calling an event lucky when it obtains in this world, (...) but fails to obtain in a wide class of nearby possible worlds. In support of this account, Pritchard argues that a theory of luck ought to capture the fact that luck comes in degrees and that luck is closely associated with risk. I argue against this claim by suggesting that an understanding of luck grounded in considerations of probability is better able to satisfy these demands, and that the probability theory better explains exemplary cases of luck like those brought up by Pritchard. (shrink)

A growing literature has focused on understanding how to detect and deter unethical consumer behavior. In this work, we focus on a particularly important type of unethical consumer behavior, consumer insurance fraud, and we analyze a unique dataset to understand how experts investigate suspicious claims. Two separate but related literatures inform the process of investigating suspicious insurance claims. The first literature is grounded in field research and emphasizes the importance of secondary sources. The second literature is (...) grounded in laboratory studies that emphasize the importance of interpersonal interactions. Here we draw upon both literatures to consider the importance of claimant interviews within the context of many investigative actions and the potential for claimants to avoid interviews. In an empirical study using qualitative and quantitative data from auto insurance claim investigations, we analyze investigative chronologies conducted by skilled experts. In doing so, we find that even when investigators can access information from a variety of sources such as witnesses, databases, and physical evidence, claimant interviews are the most important step in determining whether or not claims are denied or paid. Furthermore, we identify interpersonal avoidance as an important signal of unethical claimant behavior. Our findings inform deception detection theory and practice. We identify implications for deception detection in business, particularly for consumer unethical behavior and insurance fraud investigations. (shrink)

A growing literature has focused on understanding how to detect and deter unethical consumer behavior. In this work, we focus on a particularly important type of unethical consumer behavior, consumer insurance fraud, and we analyze a unique dataset to understand how experts investigate suspicious claims. Two separate but related literatures inform the process of investigating suspicious insurance claims. The first literature is grounded in field research and emphasizes the importance of secondary sources. The second literature is (...) grounded in laboratory studies that emphasize the importance of interpersonal interactions. Here we draw upon both literatures to consider the importance of claimant interviews within the context of many investigative actions and the potential for claimants to avoid interviews. In an empirical study using qualitative and quantitative data from auto insurance claim investigations, we analyze investigative chronologies conducted by skilled experts. In doing so, we find that even when investigators can access information from a variety of sources such as witnesses, databases, and physical evidence, claimant interviews are the most important step in determining whether or not claims are denied or paid. Furthermore, we identify interpersonal avoidance as an important signal of unethical claimant behavior. Our findings inform deception detection theory and practice. We identify implications for deception detection in business, particularly for consumer unethical behavior and insurance fraud investigations. (shrink)

It is difficult for prioritarians to explain the degree to which justice requires redress for misfortune in a way that avoids imposing unreasonably high costs on more advantaged individuals whilst also economising on intuitionist appeals to judgment. An appeal to hypothetical insurance may be able to solve the problems of cost and judgment more successfully, and can also be defended from critics who claim that resource egalitarianism is best understood to favour the ex post elimination of envy over individual (...) endowments. (shrink)

It is difficult for prioritarians to explain the degree to which justice requires redress for misfortune in a way that avoids imposing unreasonably high costs on more advantaged individuals whilst also economising on intuitionist appeals to judgment. An appeal to hypothetical insurance may be able to solve the problems of cost and judgment more successfully, and can also be defended from critics who claim that resource egalitarianism is best understood to favour the ex post elimination of envy over individual (...) endowments.u. (shrink)

The article presents two main arguments. First, we claim that in contemporary societies, insurance enacts peculiar kinds of solidarities as well as inequality and exclusion. Especially important in this respect are life, health, disability and old age pension insurance, both in compulsory and voluntary forms. Second, the article maintains that the ideas of solidarity, inequality and exclusion are transformed by the machinery of insurance. In other words, the concrete ways in which insurance relations are practically arranged (...) have an effect on the ways in which the related moral and political concepts are perceived. We elaborate on three different forms of insurance solidarity, which we call chance, risk and income solidarity. The existence of multiple forms of solidarity relevant to insurance is significant because practices of insurance require decisions concerning what kind of solidarity is emphasised, when it is emphasised, and on what grounds. Moreover, what is solidarity for some can entail exclusion and inequality for others. Showing these internal tensions within insurance practice underlines the inherently political and moral nature of insurance. (shrink)

In Kimber v. Thiokol Corp., 196 F.3d 1092, the U.S. Court of Appeals for the Tenth Circuit upheld a U.S. District Court's grant of summary judgment against an employee's claim that an employeroperated disability insurance plan, which offered different levels of compensation for disabilities due to mental and physical conditions, violated Title I of the Americans with Disabilities Act. The Court of Appeals found that the Thiokol plan administrator's interpretations of the plan were not arbitrary and capricious, and that (...) the plan's different treatment of disabilities caused by physical and mental conditions did not violate the ADA. (shrink)

Critics of luck egalitarianism have claimed that, far from providing a justification for the public insurance functions of a welfare state as its proponents claim, the view objectionably abandons those who are deemed responsible for their dire straits. This article considers seven arguments that can be made in response to this ‘abandonment objection’. Four of these arguments are found wanting, with a recurrent problem being their reliance on a dubious sufficientarian or quasi-sufficientarian commitment to provide a threshold of goods (...) unconditionally. Three arguments succeed, showing that luck egalitarians have good reasons for assisting ‘negligent victims’ on account of changes that may occur in an individual between the time of their choice and their subsequent disadvantage, bad option luck, and doubts about free will and responsibility. Luck egalitarianism is therefore shown to offer strong support for public insurance. (shrink)

In the insurance literature, it is often argued that private markets can provide insurance against ‘risks’ but not against ‘uncertainties’ in the sense of Knight ([1921]) or Keynes ([1921]). This claim is at odds with the standard economic model of risk exchange which, in assuming that decision-makers are always guided by point-valued subjective probabilities, predicts that all uncertainties can, in theory, be insured. Supporters of the standard model argue that the insuring of highly idiosyncratic risks by Lloyd's of (...) London proves that this is so even in practice. The purpose of this article is to show that Bruno de Finetti, famous as one of the three founding fathers of the subjective approach to probability assumed by the standard model, actually made a theoretical case for uncertainty within the subjectivist approach. We draw on empirical evidence from the practice of underwriters to show how this case may help explain the reluctance of insurers to cover highly uncertain contingencies. (shrink)

[Andrew Williams] It is difficult for prioritarians to explain the degree to which justice requires redress for misfortune in a way that avoids imposing unreasonably high costs on more advantaged individuals whilst also economising on intuitionist appeals to judgment. An appeal to hypothetical insurance may be able to solve the problems of cost and judgment more successfully, and can also be defended from critics who claim that resource egalitarianism is best understood to favour the ex post elimination of envy (...) over individual endowments. /// [Michael Otsuka] Inequality is intrinsically bad when and because it is unfair. It follows that the ideal of equality is not necessarily realised by a distribution of resources which is envy-free prior to the resolution of risks against which people have an equal opportunity to insure. Even if the upshot of such an ex ante envyfree distribution is just, it is not necessarily fair. (shrink)

Creating a single national health insurance pool is not likely to destabilize the economy by supplanting the private health insurance industry. This industry insures a relatively small percentage of the population and holds very little of the risk such insurance implies. In effect, insurance companies function as middlemen, bundling risk packages to distribute to other, larger companies and so serve a limited purpose. Were insurers to handle claims for a national pool as they do for (...) the Medicare program, any destabilization to the economy more broadly would be further minimized. (shrink)

In recent years, critics have argued that, when inter-generational transfer programs such as Medicare are judged by the standard of "generational equity", these programs are seen to be unfair. It is argued that, under a pay-as-you-go system, future generations are committed to burdens without their consent; that claims are not contractually guaranteed; that early entrants reap windfalls gains; that successive cohorts are tempted to provide insupportably high benefit levels; and, finally, that fluctuations leave future generations at unacceptable risk. Attempts (...) have been made to defend social insurance programs by means of a "lifespan prudential model" of age-group resource allocation, but this defense does not adequately take account of uncertainties and inequities faced by historical birth cohorts. A deeper defense must acknowledge an element of risk-sharing and solidarity while trying to limit inequities within reasonable bounds. Keywords: elderly, health care, equity, social insurance CiteULike Connotea Del.icio.us What's this? (shrink)

Clients may feel trapped into sharing their private digital data with insurance companies to get a desired insurance product or premium. However, private insurance must collect some data to offer products and premiums appropriate to the client’s level of risk. This situation creates tension between the value of privacy and common insurance business practice. We argue for three main claims: first, coercion to share private data with insurers is pro tanto wrong because it violates the (...) autonomous choice of a privacy-valuing client. Second, we maintain that irrespective of being coerced, the choice of accepting digital surveillance by insurers makes it harder for the client to protect his or her autonomy. The violation of autonomy also makes coercing customers into digital surveillance pro tanto morally wrong. Third, having identified an economically plausible process involving no direct coercion by insurers, leading to the adoption of digital surveillance, we argue that such an outcome generates further threats against autonomy. This threat provides individuals with a pro tanto reason to prevent this process. We highlight the freedom dilemma faced by regulators who aim to prevent this outcome by constraining market freedoms and argue for the need for further moral and empirical research on this question. (shrink)

This paper addresses two examples of overconfident presentations of utilitarian moral conclusions. First, there is Peter Singer’s widely discussed claim that if the consequences of a medical experiment are sufficiently good to justify the use of animals, then we should be prepared to perform the experiment on human beings with equivalent mental capacities. Second, I consider defences of infanticide or after-birth abortion. I do not challenge the soundness of these arguments. Rather, I accuse those who seek to translate these conclusions (...) into moral advice of a dangerous overconfidence. This paper offers an insurance policy that protects against some of the costs of mistaken moral reasoning. An interest in moral insurance is motivated by the recognition that, in the event that overconfident ethicists have reasoned incorrectly, some actions recommended by their conclusions are not just bad, but very bad. We should reject suggestions that we conduct medical experiments on humans or kill newborns. (shrink)

An increasing number of genetic tests are available as an early spin-off from human genetic research. Beyond their application in the context of medical diagnosis there are other possible domains of use: e.g. in the testing of individuals asking for life or health insurance. It is claimed that individuals with an increased genetic risk might have to pay higher premiums or, worse, might be unable to obtain insurance coverage at all. The main question discussed in this paper will (...) be whether there is a right to health and/or life insurance coverage without prior genetic testing. The legal regulations of the use of genetic tests in the insurance system are various. While some countries in principle permit the use of (some) genetic tests for the calculation of actuarial risks, others banned genetic tests for non-medical uses; still other countries have not made any explicit provisions up to now. In the face of the attempted harmonisation of legal systems, as well as an increasing commercialisation of the international market for genetic tests, which neglects national borders, providing criteria for a moral evaluation of this issue appears to be a timely and urgent task. The view defended in this paper is that a right to health insurance without genetic testing is legitimised, insofar as health insurance belongs to the provision of elementary requirements, and insofar as the latter is everybody's moral right. On the other hand, it is implausible to postulate a right to life insurance without genetic testing – as long as life insurance is understood to be a part of one's provision of supplementary requirements. (shrink)

In Kimber v. Thiokol Corp., 196 F.3d 1092, the U.S. Court of Appeals for the Tenth Circuit upheld a U.S. District Court's grant of summary judgment against an employee's claim that an employeroperated disability insurance plan, which offered different levels of compensation for disabilities due to mental and physical conditions, violated Title I of the Americans with Disabilities Act. The Court of Appeals found that the Thiokol plan administrator's interpretations of the plan were not arbitrary and capricious, and that (...) the plan's different treatment of disabilities caused by physical and mental conditions did not violate the ADA. (shrink)

Practice guidelines are an increasingly relevant feature of health insurance. One hundred and seventy-eight million people in the United States have some form of private health insurance coverage; coverage for 150 million of them is employment-related. Traditionally, this coverage was provided by employers purchasing a group contract under which an insurance carrier provided indemnity coverage for employees—that is, the insurance company paid all usual, customary, and reasonable charges incurred by an employee for medical care, subject in (...) some cases to an annual deductible and to a percentage of covered expenses, co-paid by the employee, for each service. In recent years, however, employers in greater numbers have switched to so-called self-insurance plans in which employees’ health care claims are paid directly by the employer. (shrink)

Lawsuits alleging illegal and unethical insurance sales practices have received widespread publicity in recent years. Although many observers have argued that one source of ethical conflicts for insurance agents is the industry's reliance on straight commission compensation, there remains a paucity of empirical data to support the claim. Therefore, we tested whether different forms of compensation influence insurance agent recommendations of products. We obtained survey responses from 336 insurance agents. Respondents were presented with a composite sketch (...) of a hypothetical client. Following this description, they were asked to identify which one of eight specified life insurance products they would recommend to the client. A between-groups design was employed to manipulate differences in compensation associated with the eight products. Results indicated that neither amount of coverage nor type of coverage (term life versus cash value) recommended was associated with compensation. However, an unanticipated finding was that amount of coverage recommended was significantly higher when the insured was male than when the insured was female. (shrink)

Practice guidelines are an increasingly relevant feature of health insurance. One hundred and seventy-eight million people in the United States have some form of private health insurance coverage; coverage for 150 million of them is employment-related. Traditionally, this coverage was provided by employers purchasing a group contract under which an insurance carrier provided indemnity coverage for employees—that is, the insurance company paid all usual, customary, and reasonable charges incurred by an employee for medical care, subject in (...) some cases to an annual deductible and to a percentage of covered expenses, co-paid by the employee, for each service. In recent years, however, employers in greater numbers have switched to so-called self-insurance plans in which employees’ health care claims are paid directly by the employer. (shrink)

Many private business relationships are increasingly characterized by claims that certain actions should not be permitted since particular right claims are involved. Such claims should be taken seriously, but are they always ethically legitimate? This paper analyzes one context, the use of age as a rating variable in the pricing of automobile insurance, where such claims are made. By identifying, evaluating and assessing the relevant basis for the differentiation, actuarial equity, it is concluded that there (...) is an ethical basis for such a practice. The analysis also provides an equivalent means for considering other such analogous claims where actuarial equity is involved. (shrink)

In this paper, we discuss how access to health-related data by private insurers, other than affecting the interests of prospective policy-holders, can also influence their propensity to make personal data available for research purposes. We take the case of national precision medicine initiatives as an illustrative example of this possible tendency. Precision medicine pools together unprecedented amounts of genetic as well as phenotypic data. The possibility that private insurers could claim access to such rapidly accumulating biomedical Big Data or to (...) health-related information derived from it would discourage people from enrolling in precision medicine studies. Should that be the case, the economic value of personal data for the insurance industry would end up affecting the public value of data as a scientific resource. In what follows we articulate three principles – trustworthiness, openness and evidence – to address this problem and tame its potentially harmful effects on the development of precision medicine and, more generally, on the advancement of medical science. (shrink)

abstract Individuals tend to change their behaviour as a response to insurance. Such behavioural responses to insurance are commonly seen as ethically and morally problematic. This is especially true of effects on behaviour from social insurance. These effects have been seen as an ethical problem, associated with irresponsibility, fraud and an immoral character. This article discusses the relevance of four different types of reasons for claims that behavioural responses to social insurance are immoral. These reasons (...) are (1) independent reasons (2) con‐tract related reasons (3) reasons related to fraud and (4) reasons related to justice. I argue that reasons related to justice are most relevant, but that this type of reason does not render the individual morally blameworthy. Hence, insofar as behavioural responses to social insurance are an ethical problem it is a problem that concerns the institution, i.e. what incentives social insurance exhibits, rather than the individual, i.e. the morality of the individual responding to it. Insofar as behavioural responses to social insurance are an ethical problem it is a problem for political philosophy rather than individual ethics. (shrink)

This paper claims that health insurance is not a human right; that the reason the medical care industry is in such an unsatisfactorystate is that there is not enough competition in the field. To wit, there are government interferences on both the supply and demand sides of health care; the former in terms of restrictions on entry for physicians, the latter based on the moral hazard attendant on the subsidization of medicine.

This essay discusses unlimited insurance subrogation (UIS) as a means of improving the deterrence and compensation results of medical malpractice law. Under UIS, health care insureds could assign their entire potential medical malpractice claims to their first-party commercial and government insurers. UIS should improve deterrence by establishing first-party insurers as plaintiffs to confront liability insurers on the defense side, leading to more effective prosecution of meritorious claims and reducing meritless and unnecessary litigation. UIS should improve compensation outcomes (...) by converting litigation cost- and risk- laden “tort insurance” into cheaper and enhanced first-party insurance. UIS also promises dynamic benefits through further reforms by contract between the first-party and liability insurers that would take charge of system. No UIS-related costs are apparent that would outweigh these benefits. (shrink)

The uses of statistical distributions for modeling real phenomena of nature have received considerable attention in the literature. The recent studies have pointed out the potential of statistical distributions in modeling data in applied sciences, particularly in financial sciences. Among them, the two-parameter Lomax distribution is one of the prominent models that can be used quite effectively for modeling data in management sciences, banking, finance, and actuarial sciences, among others. In the present article, we introduce a new three-parameter extension of (...) the Lomax distribution via using a class of claim distributions. The new model may be called the Lomax-Claim distribution. The parameters of the Lomax-Claim model are estimated using the maximum likelihood estimation method. The behaviors of the maximum likelihood estimators are examined by conducting a brief Monte Carlo study. The potentiality and applicability of the Lomax claim model are illustrated by analyzing a dataset taken from financial sciences representing the vehicle insurance loss data. For this dataset, the proposed model is compared with the Lomax, power Lomax, transmuted Lomax, and exponentiated Lomax distributions. To show the best fit of the competing distributions, we consider certain analytical tools such as the Anderson–Darling test statistic, Cramer–Von Mises test statistic, and Kolmogorov–Smirnov test statistic. Based on these analytical measures, we observed that the new model outperforms the competitive models. Furthermore, a bivariate extension of the proposed model called the Farlie–Gumble–Morgenstern bivariate Lomax-Claim distribution is also introduced, and different shapes for the density function are plotted. An application of the bivariate model to GDP and export of goods and services is provided. (shrink)

abstract Individuals tend to change their behaviour as a response to insurance. Such behavioural responses to insurance are commonly seen as ethically and morally problematic. This is especially true of effects on behaviour from social insurance. These effects have been seen as an ethical problem, associated with irresponsibility, fraud and an immoral character. This article discusses the relevance of four different types of reasons for claims that behavioural responses to social insurance are immoral. These reasons (...) are independent reasons con‐tract related reasons reasons related to fraud and reasons related to justice. I argue that reasons related to justice are most relevant, but that this type of reason does not render the individual morally blameworthy. Hence, insofar as behavioural responses to social insurance are an ethical problem it is a problem that concerns the institution, i.e. what incentives social insurance exhibits, rather than the individual, i.e. the morality of the individual responding to it. Insofar as behavioural responses to social insurance are an ethical problem it is a problem for political philosophy rather than individual ethics. (shrink)

In Vencor, Inc. v. National States Insurance Co., the U.S. Court of Appeals for the Ninth Circuit held that a Medigap insurance provider was only obligated to pay the rates that Medicare would have paid for the same care.Clarence Rollins purchased a Medigap insurance policy from National States Insurance Company to supplement his Medicare coverage. When Rollins became ill and required care beyond that which Medicare would cover, he received his medical treatment from Vencor Hospital-Phoenix. Upon (...) Rollins's death, NSIC paid Vencor $38,760. Vencor claimed that NSIC owed an additional $132,438 because NSIC was not entitled to the lower care rates established by Medicare. NSIC refused to pay Vencor's higher rates. As a result, Vencor sued NSIC for breach of contract.The U.S. District Court for the District of Arizona held, on a motion for summary judgment, that no breach occurred, and that NSIC was obligated to pay only the lower rates established by Mediare. The Ninth Circuit affirmed this decision. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Hildegard: Medieval Holism and ‘Presentism’—Or, Did Sigewiza Have Health Insurance?Jerome L. Kroll (bio)Keywordsholistic healing, presentism, Hildegard of Bingen, medieval medicineSuzanne Phillips and Monique Boivin have published an article examining Hildegard of Bingen’s (1098–179) treatment and cure of Sigewiza, a possessed woman. The purpose of their article is to demonstrate Hildegard’s holistic, or biopsychosocial, approach to healing as a model that we in the twenty-first century have lost but (...) would do well to recover. Several questions come to mind:What is Hildegard’s model?Have we lost it?Is it something we wish to emulate?The basics of the case history is that a noblewoman, Sigewiza, is ill or possessed of an evil spirit. Attempts by her local abbot and community to send her on pilgrimages or otherwise to cure or exorcise her, even with Hildegard’s recommendation, have only short-lived success, after which Sigewiza’s illness or demon returns. Finally, the abbot asks Hildegard to take the noblewoman into her Benedictine monastery, and after a suitable time and various interventions, Sigewiza is permanently (presumably) cured. The arduous process of effecting this cure has left Hildegard weak and ill herself, a pattern of poor physical health from which Hildegard suffered all her life.Phillips and Boivin claim that this is an early example of conceptualizing and utilizing a bio-psychosocial model to treat a complex illness. Hildegard, well known for her medical and pharmaceutical knowledge, applies the proper dietary changes to correct Sigewiza’s humoral (biological) imbalance. She treats the psyche and its partner, the soul, by long hours of discussion with Sigewiza and verbal duels with her demon, as well as by exorcising the demon, and she includes the social aspects of treatment by bringing Sigewiza into the Benedictine community of sisters as a participating member. Which of these three modalities may be sufficient for a cure depends upon the medieval literary genre in which the case appears. If in a medical text, then the proper dietary treatment and application of compounds to neutralize and correct the offending humoral imbalances would be the therapeutic agents. In medieval hagiography, [End Page 369] the biological modality is never sufficient and often ridiculed, because the entire thrust of the text is to demonstrate the futility of medical (secular) ministrations and the effectiveness of saintly intervention in producing a cure, whether or not exorcism is technically part of the process. In Sigewiza’s case, perhaps because of the stubbornness of the possessing demon or because of other factors attached to Sigewiza’s condition, the three (biopsychosocial) modalities are utilized. It seems that Sigewiza has a treatment-resistant illness.The narrative follows a familiar topos in saint’s lives (Kroll and Bachrach 2005). Attempts to cure a demoniac by prayers, pilgrimages, intercessions of other local saints or reputedly holy persons, and sometimes by physicians (when available) are to no avail. The sufferer is brought, amidst great fanfare and public attention (a media event), to the holy woman who is the central figure of the particular Vita, and the sufferer is promptly, or protractedly, cured. In such an account, the holiness of the holy woman is further demonstrated and her reputation, shrine, and influence are duly extended and enhanced. The holy person, with humility, attributes the intercession and cure to the power of God, or Jesus or Mary or a particular patron saint, but the crowd of onlookers and the audience of the Vita understand that God (or Jesus or Mary) has in fact granted the miracle cure as a way of demonstrating the holiness of this holy person in contrast to those who previously tried to cure the ill person. The abbot who ‘referred’ Sigewiza to Hildegard, and the previous saints’ shrine to whom Sigewiza was brought, although generally acknowledged as being of fine character or respectability, had to suffer the ignominy of their petitions being rejected to dramatize the special regard in which Hildegard is held.Although we can say that the “purposes” for which Hildegard’s hagiographer includes such anecdotes is to demonstrate her holiness and her importance in God’s eyes, this does not stop us, nine centuries later, from using such... (shrink)

In Vencor, Inc. v. National States Insurance Co., the U.S. Court of Appeals for the Ninth Circuit held that a Medigap insurance provider was only obligated to pay the rates that Medicare would have paid for the same care.Clarence Rollins purchased a Medigap insurance policy from National States Insurance Company to supplement his Medicare coverage. When Rollins became ill and required care beyond that which Medicare would cover, he received his medical treatment from Vencor Hospital-Phoenix. Upon (...) Rollins's death, NSIC paid Vencor $38,760. Vencor claimed that NSIC owed an additional $132,438 because NSIC was not entitled to the lower care rates established by Medicare. NSIC refused to pay Vencor's higher rates. As a result, Vencor sued NSIC for breach of contract.The U.S. District Court for the District of Arizona held, on a motion for summary judgment, that no breach occurred, and that NSIC was obligated to pay only the lower rates established by Mediare. The Ninth Circuit affirmed this decision. (shrink)

The general consensus is that reform of medical malpractice law should be part of the health care system's overhaul. Medical malpractice litigation results in the expenditure of tens of billions annually, largely paid out of health care insurance funds and mostly paid to defendants' and plaintiffs' lawyers. By all accounts, this tort law regime ill serves the basic deterrence and compensation goals of civil liability. The causes and magnitude of these failings are disputed, and many typical reform proposals sidestep (...) the basic problems and may do more harm than good. In contrast, we advance a straightforward way to improve both deterrence and compensation. Essentially, the proposal is to remove current legal limitations on the scope of insurance subrogation that bar private and public health care insurers from “buying” the whole of their insureds' potential medical malpractice claims in exchange for lower premiums and taxes and expanded insurance coverage. Our proposal’s benefits accrue regardless of the cause and magnitude of the failings of malpractice law or the further reforms that might be adopted. (shrink)

Policyholders and other claimants in insurance companies are interested in solidity, i.e., the ability of insurers to meet their claims obligations in both the short run and the long run. Insurance regulators exist in order to represent the interests of consumers. Great emphasis is placed by the regulators of the market on the mandatory and uniform disclosure of relevant financial and operating aspects of insurers. This paper employs simple gametheoretic techniques to address two aspects of the general (...) issue of the desirability of establishing a regulator to assess the solidity of insurers. First, why would uniform information about insurers be desirable? Given that uniformity is desirable, it could be achieved by voluntary agreement of insurers or via regulation. The second issue is how that uniformity is to be achieved; that is, what is the value of a regulator in achieving uniformity? Insurance provides an interesting instance of the general problem. A key determinant is the structure of costs and benefits of securing voluntary agreements across firms. (shrink)

The globalizing or totalizing imposition of a particular understanding of justice, fairness, or equality, as seen, for example, in Canada's single health care system, which forbids the sale of private insurance and the purchase of better basic health care, cannot be justified in general secular terms because of the following limitations: the plurality of understandings of justice, fairness, and equality, and the inability to establish one understanding as canonical. The secular state lacks plausible moral authority for the coercive imposition (...) of one such account on peaceable, consenting adults. This state of affairs, with regard to the weakness of human moral epistemological powers, means that the secular state fails to have the moral authority to forbid coercively the sale and purchase of organs. It further lacks the secular, moral authority to impose equal access to organ transplantations. Assertions of such authority amount to reckless claims of fairness, and for this reason, health care policy must be set within the constraints of limited, constitutional regimes. (shrink)

The objective of this study was to take a closer look at defense-related expenses for medical malpractice cases over time. We conducted a retrospective review of medical malpractice claims reported to the Physician Insurers Association of America's Data Sharing Project with a closing date between January 1, 1985 and December 31, 2008. On average a medical malpractice claim costs more than $27,000 to defend. Claims that go to trial are much more costly to defend than are those that (...) are dropped, withdrawn, or dismissed. However, since the overwhelming majority of claims are dropped, withdrawn, or dismissed, the total amount spent to defend them surpasses that spent on claims that go to trial. Defense attorney expenses account for the majority of defense-related expenses (74%), while expert witness expenses and other expenses split the remaining 26%. A strong association was also found between the average indemnity payment and the amount it costs to defend individual claims by specialty. Our study found that defense-related expenses for medical malpractice claims are not an insignificant cost. As state and federal governments debate how to repair the malpractice system, addressing the high cost of defending claims should not be ignored. (shrink)