Understanding Insurance Law

by Jerry, Robert H., II

• ISBN13: 9780820524672
• ISBN10: 0820524670
• Format: Paperback
• Copyright: 1996-06-01
• Publisher: Lexis Nexis Matthew Bender

Table of Contents

Introduction	1	(1)
Why Study Insurance Law?	1	(2)
The Outline of This Book	3	(1)
Sources for Further Study	4	(7)
Multivolume Treatises: General	4	(1)
Multivolume Treatises: Specialized	4	(1)
One-Volume Treatises: General	4	(1)
One-Volume Treatises: Specialized	5	(1)
Casebooks	5	(1)
Case Reporting Services and Other Research Aids	6	(1)
Periodicals	6	(1)
One-Volume Works on the Insurance Industry and the Insurance Business	6	(1)
Other Written Materials	7	(1)
Electronic Data Resources	7	(4)
PART A WHAT IS INSURANCE LAW?
What Is Insurance?
Defining Insurance	11	(6)
The Nature of Risk	11	(1)
Coping with Risk	11	(2)
The Economics of Transferring and Distributing Risk	13	(1)
The Value of Transferring Risk	13	(1)
Economic Effects of the Transfer and Distribution of Risk	14	(2)
A Definition	16	(1)
A Brief Historical Overview	17	(3)
The ``Business of Insurance''	20	(5)
State Statutory Definitions	20	(4)
The McCarran-Ferguson Act Definition	24	(1)
Self-Insurance as the ``Business of Insurance''	24	(1)
Classification of Insurance	25	(1)
Classification by Nature of the Risk	26	(14)
Marine and Inland Marine	26	(1)
Life Insurance	27	(1)
Term versus Whole-Life	27	(4)
Other Categories of Life Insurance	31	(2)
Annuities	33	(2)
Life Insurance and Taxes	35	(1)
Fire and Casualty Insurance	36	(2)
Other Kinds of Insurance	38	(1)
First-Party versus Third-Party Insurance	38	(1)
A Trend Toward Reclassification?	39	(1)
Classification by Nature of the Insurer	40	(9)
Stock versus Mutual Companies	41	(1)
Lloyd's Syndicates	41	(4)
Fraternal Benefit Organizations	45	(1)
Other Private Insurance Entities	45	(1)
Government Insurance	46	(3)
Classification by Nature of Marketing	49	(2)
Sources of Insurance Law
The Rationale for Regulation: Generally	51	(3)
Legislative Regulation: State versus Federal Control	54	(30)
The Origins of the McCarran-Ferguson Act	54	(3)
The Substance of the McCarran-Ferguson Act	57	(1)
The Effects of the McCarran-Ferguson Act	58	(1)
Current Status of the State-Federal Accommodation	59	(1)
The ``Business of Insurance''	60	(6)
The ``Specifically Relates'' Exception	66	(1)
The Existence of a Conflict Between Federal and State Law	67	(2)
Federal Antitrust Law and State Regulation	69	(2)
The Boycott, Coercion, and Intimidation Exception	71	(3)
The Future of the State-Federal Accommodation	74	(1)
State-Federal Accommodation Issues Arising Under ERISA	75	(9)
The State Regulatory Framework: Statutory Controls	84	(14)
Objectives of State Regulation	85	(1)
Rate Regulation	85	(4)
Insurer Solvency	89	(2)
Unfair Practices and Insurer Overreaching	91	(2)
Coverage	93	(2)
Deregulation: A Realistic Alternative?	95	(3)
State Regulation: Administrative Controls	98	(4)
The Department of Insurance	98	(1)
National Association of Insurance Commissioners	99	(1)
How Effective Is State Regulation?	100	(2)
Case Studies in Regulation	102	(21)
The Controversy over Gender-Based Rating	102	(1)
Gender and Risk	102	(1)
The Supreme Court's Title VII Cases and Their Reach	103	(1)
The Proposed Federal Legislation	104	(1)
Is Gender-Based Rating Discriminating or Discriminatory?	104	(2)
State versus Federal Regulation	106	(1)
Unisex Insurance and Its Effect on the Marketplace	107	(2)
AIDS and Insurance Underwriting	109	(9)
Genetic Screening and Insurance Underwriting	118	(4)
A Concluding Thought on the Nature of Insurance	122	(1)
Judicial Regulation	123	(2)
Courts as Regulation	123	(1)
The Interplay Between Legislative and Judicial Regulation	123	(2)
Contract Interpretation	125	(13)
Kinds and Causes of Imprecision in Contracts	126	(3)
General Principles of Contract Interpretation	129	(5)
Interpretation of Insurance Contracts	134	(2)
The Role of Drafting History	136	(2)
Judicial Interpretation of Statutory Requirements	138	(1)
Insurance Policies as Adhesion Contracts	139	(2)
The Doctrine of Reasonable Expectations	141	(6)
Waiver and Estoppel	147	(3)
The Terminology	147	(1)
Common Uses of the Doctrines	148	(1)
Limitations on the Doctrines	149	(1)
Implied Warranty	150	(1)
Insurers' Liability for Bad Faith	151	(11)
The Early History of Bad Faith	152	(1)
Bad Faith in Third-Party Insurance	153	(3)
Bad Faith in First-Party Cases	156	(2)
Current Contours of Bad Faith	158	(1)
ERISA Preemption	158	(1)
Nature of Misbehavior Required to Constitute Bad Faith	159	(2)
Statutory Penalties and Related Remedies	161	(1)
Reverse Bad Faith	161	(1)
Reformation	162	(1)
The Policing Effect of the Absent Policy Defense	163	(6)
PART B ESTABLISHING THE CONTRACTUAL RELATIONSHIP
Contract Formation
The Process of Contract Formation: An Overview	169	(2)
The Legal Requirements for Forming a Contract	171	(7)
Offer and Acceptance	171	(3)
Consideration	174	(1)
Capacity	174	(1)
The Writing Requirement	175	(2)
Public Policy	177	(1)
Some Troublespots in the Process of Contract Formation	178	(14)
Insurer's Delay in Responding to the Application	178	(4)
The Insured's Duty to Read the Policy	182	(2)
The Insurer's Duty to Explain the Policy	184	(5)
The Role of Standardization and the Use of Forms	189	(1)
Vending Machine Marketing	189	(3)
The Binder	192	(8)
Nature and Purposes	192	(1)
Oral Binders	193	(1)
Types of Binders	194	(2)
Judicial Regulation of Binders	196	(4)
Delivery of the Policy	200	(3)
The Event and Its Purpose	200	(1)
Constructive Delivery	200	(1)
Good Health Clauses and Other Conditions on the Effectiveness of Delivery	201	(2)
The Intermediary's Role in Contract Formation	203	(26)
Overview	203	(1)
General Principles of Agency	204	(1)
General Agency Principles in the Context of Insurance	205	(1)
Types of Agents	206	(1)
Agents versus Brokers	207	(2)
Liability of Agents to Brokers	209	(1)
Liability of Agents to Insured	209	(1)
Liability of Agents or Broker to Insured or Applicant	210	(1)
The Professional's Duty of Care	211	(1)
Liability of Agents or Brokers to Insured for Failure to Provide Proper Advice	211	(4)
Liability of Agents or Brokers to Insured for Failure to Procure Insurance	215	(3)
Liability for Placing Insurance with Insolvent or Unauthorized Insurer	218	(2)
An Aside on the Duty to Procure: Obligations of Those Outside the Insurance Business to Procure Insurance	220	(2)
Liability of Agent or Broker to Third Party	222	(1)
Liability of Insurer to Agent or Broker for Damages Caused by Insurer's Nonpayment of Proceeds	223	(1)
Ability of Intermediary to Bind Insurer	224	(1)
Power of Intermediary to Contract on Insurer's Behalf	225	(1)
Ability of Intermediary to Modify or Alter Coverage	226	(1)
Effect of Misstatements on Application Prepared by Agent	226	(1)
Legal Effect of Liminations on Powers in Application or Policy	227	(2)
Effect of Giving Notice to Intermediary	229	(1)
Conflict of Laws	229	(4)
The Insurable Interest Requirement
Origins and Purposes of the Insurable Interest Requirement	233	(4)
Relationship of the Insurable Interest Requirement to the Principle of Indemnity	237	(1)
Property Insurance and the Insurable Interest Requirement	238	(12)
Legal Interest versus Factural Expectancy: The Early English Cases	238	(4)
The Legal Interest Test	242	(1)
Property Rights	243	(2)
Contract Rights	245	(1)
Legal Liability	246	(1)
The Factual Expectancy Test	247	(3)
Life Insurance and the Insurable Interest Requirement	250	(5)
Timing: When Must the Insurable Interest Exist?	255	(3)
Property Insurance	255	(1)
Life Insurance	256	(1)
Liability Insurance	257	(1)
Waiver and Estoppel: Preventing and Insurer from Denying the Existence of an Insurable Interest	258	(2)
Property Insurance and the Insurable Interest Requirement: Some Troublespots	260	(4)
Stolen Property	260	(2)
Property with a ``Negative'' Value	262	(2)
Life Insurance and the Insurable Interest Requirement: Some Troublespots	264	(9)
Assigning a Life Insurance Policy to One Lacking an Insurable Interest	264	(1)
Standing to Question Insurable Interest	265	(2)
Incontestability Clauses	267	(1)
Tort Liability for Inssuing Policy to One Lacking an Interest in the Insured's Life and the Role of Consent	268	(3)
Insurable Interest in Industrial Life Insurance	271	(2)
Scope of Obligations: Persons and Interests Protected
The Meaning of ``Insured''	273	(1)
Identifying the Insured (or Payee)	273	(9)
Specific Designations	273	(1)
The Omnibus Clause and Omnibus Coverage	274	(8)
The ``Loss Payable'' Clause	282	(1)
The Interests in a Life Insurance Policy	282	(1)
Beneficiaries Under Life Insurance Policies	283	(20)
When the Beneficiary's Rights Vest	283	(1)
Naming and Designating the Beneficiary	284	(3)
Changing the Beneficiary	287	(4)
Claims to Proceeds	291	(1)
Creditor versus Beneficiary	291	(2)
Creditor as Beneficiary	293	(1)
Trustee in Bankruptcy versus Beneficiary	293	(1)
Assignee versus Beneficiary	293	(3)
Disqualification of the Beneficiary	296	(3)
Community Property Laws	299	(2)
The Common Disaster Problem	301	(2)
Payment to Wrong Beneficiary	303	(1)
Assigness	303	(4)
Overview: The Nature of an Assignment	303	(1)
Assignment of Right to Proceeds versus Assignment of Entire Policy	304	(1)
Assignment in Property and Liability Insurance	304	(2)
Assignment in Life Insurance	306	(1)
Special Problems in Property Insurance	307	(1)
Mortgages and Conditional Sales	307	(13)
The Standard Mortgage Clause	307	(4)
The Open Mortgage Clause	311	(1)
Speical Problems in Applying the Standard Mortgage Clause	312	(1)
Mortgagee's Right to Satisfaction of Debt	312	(4)
Right of Mortgagee to Assign Interest in Policy to Successor Mortgagee	316	(1)
Effect of Mortgagee's Foreclosure on Insured Property	316	(3)
Reimbursing a Partial Loss When the Mortgagor is Disqualified from Coverage	319	(1)
The Unnamed Mortgage	320	(1)
Vendor-Purchaser Transactions	320	(6)
Mortgages and Real Estate Sales: An Observation	326	(2)
Life Tenant-Remainderman	328	(1)
Lessor-Lessee	329	(2)
Transactions in Goods	331	(3)
Bailments	334	(3)
Scope of Obligations: The Risks Covered
The Scope of Coverage	337	(1)
All-Risk versus Specified-Risk Coverage	337	(3)
The Nature of Coverage Provisions	340	(4)
The Personal Nature of Insurance	340	(1)
An Overview of the Various Kinds of Common Coverages	341	(3)
Expanding Coverage Beyond the Policy's Literal Language	344	(8)
Creating Coverage Through Estoppel	344	(5)
Other Doctrines	349	(1)
The Parol Evidence Rule	349	(3)
Limitations on Coverage: Generally	352	(1)
Explicit Limitation: Duration of Coverage	352	(18)
Commencement of Coverage	352	(2)
Termination of Coverage	354	(1)
Cancellation of Coverage	355	(1)
General Principles	355	(1)
Unilateral Cancellation	356	(2)
Statutory Canellation Procedures	358	(3)
Public Policy Restrictions on Cancellation by the Insurer	361	(2)
Reinstatement	363	(1)
Defining the Time During Which Loss Must Be Suffered	364	(6)
Conditions as Explicit Limitations on Coverage	370	(12)
An Overview	370	(1)
Evidentiary Conditions	371	(4)
Some Common Conditions and Their Legal Effects	375	(1)
Increase of Hazard Clauses	375	(3)
Reporting Conditions	378	(1)
Vacancy and Occupancy Clauses	379	(3)
Intentional Conduct: An Overview	382	(2)
Intentional Conduct and Property Insurance	384	(4)
Intentional Conduct and Personal Insurance: Life and Accidental Death	388	(12)
Suicide	388	(2)
Death While Intentionally Involved in Unlawful Conduct	390	(4)
Execution of Insured	394	(1)
Accidental Death Benefit: Distinguishing Intentional Acts and Accidents	395	(5)
Intentional Conduct and Liability Insurance	400	(13)
``Intended'' and ``Expected''	401	(2)
``Intended'' Construed	403	(6)
Self-Defense	409	(1)
Diminished Mental Capacity	410	(3)
Particular Coverage Issues in Personal Insurance	413	(27)
Life Insurance	413	(1)
Accidental Death: Defining ``Accident''	413	(6)
Accidental Death: Limits on the Time Between the Accident and the Death	419	(2)
Disability Insurance	421	(3)
Health Insurance	424	(1)
Health Insurance and Health Care Reform	425	(4)
Pre-Existing Conditions	429	(2)
Experimental Treatments	431	(2)
Medically Necessary Services	433	(4)
Mandated Coverages	437	(3)
Special Coverage Problems in Liability Insurance	440	(37)
The Scope of the CGL	440	(3)
The Meaning of Occurrence	443	(1)
Problems With the Word ``Accident''	443	(4)
Problems of Multiple Losses From a Single Cause	447	(4)
Problems of What Triggers Coverage	451	(8)
Problems of Environmental Liability	459	(1)
The Regulatory Context	459	(1)
The ``As Damages'' Issue	460	(1)
The Voluntary Cleanup Issue	461	(1)
PRP Letters and the Duty to Defend	462	(1)
The Existence of an Occurrence	462	(1)
The Pollution Exclusions	463	(7)
The Owned-Property Exclusion	470	(1)
Coverage of Punitive Damages Assessed Against the Insured	471	(6)
Particular Coverage Issues in Property Insurance: The Friendly Fire Rule	477	(5)
Coverage of Remote or Distant Causes of Loss	482	(25)
The Basic Problem	482	(2)
The Doctrine of Efficient or Predominant Cause	484	(5)
The Liberal View of Causation	489	(2)
The Conservative View of Causation	491	(3)
Other Causation Frameworks	494	(1)
The Patterson Framework	494	(3)
The Brewer Framework	497	(1)
A Dual-Filter Approach to Causation	498	(3)
Problems With the Term ``Proximate''	501	(2)
Summary	503	(4)
PART C PERFORMING THE CONTRACTUAL OBLIGATIONS
The Insured's Duty to Pay Premiums
Nature of the Obligation to Pay Premiums	507	(2)
The Nature of a ``Premium''	507	(1)
The ``Duty'' to Pay Premiums	508	(1)
Installment Premium Financing	508	(1)
The Necessity of Paying the Premium	509	(8)
Generally	509	(1)
Conclusiveness of Representation in Policy that First Premium Has Been Paid	509	(1)
Necessity of Paying Premium Before Loss	510	(2)
Mode of Paying Premiums	512	(1)
Time for Payment	513	(3)
Timeliness of Payment	516	(1)
Grace Periods	517	(2)
Automatic Premium Payments Through Financial Institutions: Special Problems	519	(4)
The Mechanics of Claim Presentation
Overview	523	(1)
Notice of Loss Provisions	523	(11)
Purpose of the Notice of Loss Provision	523	(1)
Manner of Giving Notice	524	(2)
When Notice Is Due	526	(2)
Excuses for Noncompliance	528	(1)
Effect of Noncompliance	529	(5)
Proof of Loss	534	(7)
Overview	534	(1)
Substantive Requirements	534	(2)
Effect of Noncompliance	536	(1)
False Swearing	537	(4)
Disposition of Claims: Alternatives to Litigation	541	(2)
Appraisal (Property Insurance)	541	(1)
Arbitration	541	(2)
Disposition of Claims: Litigation	543	(8)
Timeliness of the Suit Against the Insurer	543	(5)
No-Action Clauses and Direct Action Statutes	548	(3)
The Insured's Duty to Cooperate With the Insurer	551	(8)
Duties, Conditions, Express and Implied Terms	551	(1)
Generally	551	(1)
As Applied to Insurance	552	(1)
What Constitutes Noncooperation	553	(1)
When Noncooperation Gives the Insurer a Valid Defense	554	(5)
The Insurer's Duty to Pay Proceeds
Source of the Duty	559	(1)
Failure of the Insured to Mitigate the Amount the Loss	559	(5)
Measuring the Amount of the Loss: Marine Insurance	564	(6)
Total Loss, Partial Loss, and ``Average''	565	(1)
General Average	566	(1)
A General Formula	567	(2)
Particular Average	569	(1)
The ``Memorandum''	569	(1)
Measuring the Amount of the Loss: Property Insurance	570	(22)
The Principle of Indemnity	570	(4)
Coinsurance Requirements	574	(5)
Valued Policies	579	(2)
``Actual Cash Value''	581	(1)
Replacement Cost Less Depreciation	582	(1)
Market Value	582	(2)
Replacement Cost	584	(1)
Broad Evidence Rule	585	(1)
Choosing a Measure: Some Problems	586	(1)
Used Goods	586	(1)
Appreciated Property	587	(1)
Obsolescent Property	588	(1)
Coinsurance Calculations	589	(1)
Interest	590	(2)
Measuring the Amount of Loss: Personal Insurance	592	(4)
Generally	592	(1)
Accelerated Benefits in Life Insurance	593	(3)
Measuring the Amount of Loss: Liability Insurance	596	(4)
Generally	596	(1)
Interest, Expenses, and Costs	596	(1)
Insolvency Clauses and Statutes	597	(1)
Immunity of Insureds	597	(3)
The Insurer's Right of Subrogation	600	(27)
Overview	600	(2)
Equitable versus Conventional Subrogation	602	(2)
Existence or Nonexistence of Subrogation by Line of Insurance	604	(1)
The Requirement that the Insurer Must Have Paid the Debt	605	(6)
The Requirement that the Insurer Must Not Be a Volunteer	611	(1)
Subrogation Against Insured Not Allowed	612	(1)
Defenses to Subrogation and the Effect of Releases on Coverage	613	(1)
The General Rule Regarding Defenses	613	(1)
Release of Tortfeasor Prior to Loss	614	(3)
Release of Tortfeasor After Loss	617	(2)
Summary	619	(1)
Parties in Interest	620	(2)
Loan Receipts	622	(5)
Other Insurance Clauses	627	(24)
Overview	627	(1)
Other Insurance Clauses in Personal Insurance	628	(1)
Types of Other Insurance Clauses	629	(3)
Conflicts Among Other Insurance Clauses and Other Problems of Enforcement	632	(2)
Pro Rata Clause versus Excess (or Escape) Clause	634	(2)
Excess versus Excess (and Escape versus Escape)	636	(2)
Excess versus Escape	638	(1)
The Problem of Secondary or ``True Excess'' Coverage	639	(2)
Impact of Insolvency of Primary Insurer	641	(1)
Toward a Solution	642	(1)
Proration Formulas	643	(2)
Some Additional Troublespots	645	(1)
Sharing Defense Costs	645	(1)
Invalidity of Otherwise Collectible ``Other Insurance'' Due to Act or Neglect of Insured	646	(1)
Self-Insurance as ``Other Insurance''	647	(1)
Deductibles and Coinsurance Requirements	647	(4)
Resolving Disputes on Who Gets the Proceeds: The Interpleader Remedy	651	(3)
Remedies for the Insurer's Breach of the Duty to Pay Proceeds	654	(9)
General Contract Remedies	654	(1)
Loss of the Bargain	654	(1)
Other Loss	655	(1)
Attorney's Fees and Penalties	656	(1)
Punitive Damages	657	(1)
Tort Remedies	657	(1)
Effect of Mistaken Payment by the Insurer	658	(5)
Excuses for the Insurer's Nonperformance
Generally	663	(1)
Insured's Breach of Warranty	663	(19)
Definition	663	(1)
Creation of a Warranty	664	(1)
Effect of Noncompliance with a Warranty	665	(2)
Warranties versus Representations	667	(2)
Mitigating Doctrines	669	(1)
Affirmative versus Promissory Warranties	669	(1)
Judicial Interpretation	670	(3)
Statutory Mitigation	673	(4)
Is Mitigation Appropriate?	677	(1)
The Distinction between Warranties and Coverage Provisions	678	(4)
Insured's Misrepresentation	682	(15)
A General Rule	682	(1)
Representation versus Warranty	683	(1)
The Requirement That the Representation Be Untrue or Misleading	684	(2)
Materiality	686	(4)
Reliance	690	(1)
Intent and Its Relation to Materiality and Reliance	691	(1)
Misrepresentation of Age in Life Insurance	692	(1)
Statutory Regulation	693	(1)
The Obligation to Correct Misrepresentations	694	(2)
How Much Regulation of the Defense is Appropriate?	696	(1)
Insured's Concealment	697	(5)
Overview: Distinguishing Misrepresentation from Concealment	697	(1)
The General Rule	698	(2)
Materiality	700	(1)
Intent	700	(1)
A Continuing Obligation	701	(1)
Justifications for Not Disclosing Material Information	701	(1)
Limitations on the Insurer's Defenses	702	(1)
Waiver and Estoppel	702	(1)
Incontestability	703	(11)
Overview	703	(1)
Scope of Incontestability Clauses	704	(1)
Temporal Scope	704	(1)
Coverage versus Validity	705	(1)
Void Ab Initio Versus Voidable	706	(1)
Exceptions versus Conditions	707	(1)
Incontestability and the Defense of Fraud	707	(2)
Troublespots	709	(1)
Reinstatement and Renewal	709	(1)
Group Insurance	710	(4)
Divisibility or Severability	714	(5)
The Additional Duties in Third-Party Insurance
The Insured's Duty to Cooperate and Assist in the Defense	719	(10)
Overview	719	(1)
The Reciprocal Nature of the Insurer's Duties and the Insured's Duty to Cooperate	720	(4)
Materiality and Prejudice	724	(2)
Burden of Proof	726	(1)
Common Instances of Noncooperation	726	(1)
Insured's Absence from Trial or Other Proceeding	726	(1)
Making False Statements to the Insurer	727	(1)
Collusion	728	(1)
Noncooperation and Compulsory Insurance	728	(1)
The Insurer's Duty to Defend	729	(34)
Source of the Duty	729	(3)
To Whom Is the Duty Owed?	732	(1)
The Tests for Whether the Insurer Must Defend a Particular Claim	733	(1)
The General Rule	734	(1)
Evidence Extrinsic to the Complaint	734	(2)
Ambiguous Claims	736	(1)
Complaint Containing Claims Within Coverage and Claims Outside Coverage	737	(3)
Narrowing the Duty When a Fact Issue Dispositive of Coverage Will Not Be Resolved in the Underlying Action	740	(4)
Triggering the Duty to Defend: When Does the Duty Exist?	744	(1)
Premature Termination of the Duty to Defend	745	(1)
Discovery of Facts That Negate Coverage	745	(1)
Terminating the Duty to Defend by Paying the Policy Limits	746	(4)
Disclaiming Coverage	750	(1)
Standard of Conduct: The Duty of Care	751	(1)
Remedies for Breach of the Duty to Defend	752	(1)
Attorney's Fees and Other Costs Incurred in Defending the Underlying Action	752	(1)
Excess Judgment	752	(2)
Attorney's Fees in the Insured's Action Against the Insurer's Declaratory Judgment Action	754	(1)
Tort Damages	755	(1)
Liability for the Insured's Settlement of the Underlying Action	756	(2)
Breach of the Duty to Defend as an Estoppel to the Insurer's Denial of Coverage	758	(2)
Other Consequences of Breaching the Duty to Defend	760	(1)
The Insured's Duty to Mitigate Damages When the Insurer Breaches the Duty to Defend	760	(2)
``Defense Within Limits'' Politices	762	(1)
Settlement Obligations	763	(13)
Insured's Settlement Without Insurer's Consent	764	(1)
The Standard for Determining the Nature of the Insurer's Duty to Settle	765	(1)
The Reasonable-Offer Test	765	(2)
The Strict Liability Alternative	767	(2)
Source of the Insurer's Obligation: Tort or Contract?	769	(2)
Insurer Conduct Constituting Breach of the Duty to Settle	771	(1)
The Mechanics of Handling Settlement Offers	772	(1)
Remedies for Breach of the Duty to Settle	773	(1)
Effect of Breaching the Duty to Defend on the Duty to Settle	774	(2)
A Duty to Mitigate?	776	(1)
The Insurer's Duty With Regard to Appeals	776	(3)
Conflicts of Interest	779	(40)
Overview	779	(3)
The Basic Alternatives: To Whom Is Loyalty Owed?	782	(1)
The Dual Representation Model	782	(3)
What Happens When Dual Representation Is No Longer Possible?	785	(1)
Assessing the Dual Representation and One-Client Models	786	(5)
A Concluding Thought	791	(2)
Managing Conflicting Interests	793	(1)
The ``Do Nothing'' Alternative	793	(1)
The ``Abandon the Insured'' Alternative	794	(1)
The Nonwaiver Agreement and Reservation of Rights Notice	795	(3)
Declaratory Judgment	798	(2)
Joint Lawsuit to Determine Coverage and the Validity of the Plaintiff's Claim	800	(1)
Separate or Independent Counsel for Insured	801	(1)
The Separate Counsel Approach	801	(1)
Independent Counsel for Insured	801	(6)
Particular Conflicts and Their Resolution	807	(1)
Claims Exceeding the Policy Limits	807	(2)
Insured's Noncooperation	809	(5)
Disclosure of Information by Insured Inconsistent with Insurer's Obligation	814	(2)
Common Issue Cases	816	(1)
Multiple Insureds with Conflicting Interests	817	(2)
Insured's Counterclaims	819	(1)
Problems of Primary versus Excess Coverage	819	(8)
Some ``Guiding Principles''	820	(1)
The Primary Insurer's Duty and Its Source	821	(1)
Allocating Defense Costs Between Primary and Excess Carrier	822	(5)
PART D SOME REMAINING MATTERS
Group Insurance
Overview: The Nature of Group Insurance	827	(1)
The Tripartite Contract: Problems of Agency	828	(3)
Special Problems of Contract Interpretation	831	(4)
The Problem of Multiple Documents	831	(2)
The ``Actively at Work'' Problem	833	(2)
Special Problems of Risk Control	835	(1)
Termination and Modification	836	(2)
Assignments; Changing the Beneficiary; Standing to Sue	838	(1)
Legislation Affecting Group Insurance	839	(4)
Automobile Insurance
Overview	843	(1)
The History of Automobile Accident Compensation	843	(6)
The Current Landscape for Compensating Automobile Accident Injuries	849	(12)
The Traditional System	849	(1)
Overview	849	(1)
The Liability Insurance Component	849	(1)
Financial Responsibility Requirements	849	(2)
Observations	851	(1)
Add-on-No-Fault	852	(1)
True-No-Fault	852	(2)
Choice Systems	854	(1)
Possible Future Developments	855	(1)
Preceptions of the Current System	855	(1)
Second-Generation No-Fault Proposals	856	(3)
Applying No-Fault Beyond the Motor Vehicle Setting: Neo-No-Fault Proposals	859	(2)
Compulsory Liability Insurance and Financial Responsibility Insurance: Some Additional Issues	861	(5)
The Problem of Intenational Conduct	861	(2)
The Effect of the Insured's Bankruptcy on Victim Compensation	863	(2)
Insurer's Defense Against Insured	865	(1)
Uninsured and Underinsured Motorist Insurance	866	(10)
Purpose	866	(1)
Nature of Uninsured Motorist Coverage	866	(1)
Four Elements of Coverage	866	(1)
The ``Legally Entitled'' Requirement and Immunity	867	(1)
Exclusions	868	(2)
Hit-and-Run Acciddents	870	(5)
The Nature of Underinsured Coverage	875	(1)
Property Coverage in Automobile Insurance	876	(2)
Other Issues in Automobile Insurance	878	(1)
What Constitutes ``Use'' of an Automobile	878	(9)
What Constitutes ``Ownership''	887	(2)
The Family (or Household) Exclusion	889	(3)
Stacking of Automobile Insurance Benefits	892	(5)
Overview	892	(1)
Liability Insurance	893	(1)
Uninsured Motorist Insurance	893	(2)
No-Fault Coverages	895	(2)
Reinsurance
Overview	897	(3)
Definition	897	(1)
Types of Reinsurance Arrangements and Coverage	898	(2)
Purposes	900	(1)
Legal Issues Involving Reinsurance	901
Insurable Interest	901
Insolvency of the Primary Insurer	902
Reinsurer's Defenses and the Duty of Utmost Good Faith	903
Rights of Original Insured Against Reinsurer	903
``Following the Fortunes''	904
Table of Cases	TC-1
Index	I-1