Attorney: Supreme Court Is Helping Insurance Industry

"The insurance industry was never intended to be—nor should it become—the income redistribution system of the United States,” says Cozen.

NU Online News Service, June 16, 12:41 p.m. EST

NEW ORLEANS - In his opening keynote address at the ACE America’s Claims Event conference, attorney Stephen A. Cozen said the Supreme Court has become a valued partner of the insurance industry, working to reduce punitive damage awards and reject exposure lawsuits.

“The Supreme Court has been quietly helping the insurance industry in important ways over the last few years,” says Cozen, founder and chairman of Cozen O’Conner, during his address Wednesday afternoon. “In particular, the Court has been discouraging exorbitant punitive damage awards and now appears poised to reject the species of climate change litigation that could have imposed ruinous liability on every business in the country.”

In terms of punitive damages, Cozen said that the Supreme Court is requiring jury verdicts not be given primacy, but instead that the courts look at factors such as comparable fines and penalties for comparable conduct while taking into account factors such as degree of reprehensibility.

“The result has meant that punitive damage awards have been going down and will continue going down,” says Cozen. “The Supreme Court will, in my opinion, ultimately conclude that if the ratio between compensable damages and punitive damages is not in the single digit category—1:1, 2:1, 3:1—depending on the nature of reprehensibility, it will declare that particular result unconstitutional as a denial of due process.”

Cozen also made his opinions known about the case American Electric Power v. Connecticut, which was recently presented to the Court.

“American Electric Power v. Connecticut is the case where states sued for emissions that added to global warming, seeking to use a nuisance law theory to convince a court to take what was essentially political action,” says Cozen. “The court has heard arguments in this case, and in my view will be rejecting the ultimate liability under that nuisance law theory.”

Lastly, Cozen said the having certainty in the law is critical for insurance companies to continue to exist.

“Certainty in the law means that we know when we write a policy it covers what is intended, and we know the courts will impose the limitations of our language the way that we intended them to be imposed,” he says. “That has happened more and more in the past, and I think will happen more and more in the future. The certainty of the law is the safety of us all.

“I hold to one philosophy, and that is the insurance industry was never intended to be—nor should it become—the income redistribution system of the United States.”

Comments

Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Union used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.