How Is “Insurance Law” Defined — And Who Needs It?

To say insurance law is a complicated subject is no exaggeration. The average American has a limited understanding of insurance to begin with. The basics are simple enough: insurance is a contract, usually between two parties. The first party wishes to purchase a policy to become insured against the financial damages of certain outcomes. For example, if you get sick, health insurance helps. If you get into a car accident, car insurance helps. Home burned down? Homeowners insurance helps. Simple, right? 

Not so fast.

Behind the scenes, everything is a bit more complicated. Insurance companies are rich. They’re rich because the insurers are often insured — sometimes with literal insurance, and sometimes through insurance defense attorneys. These are lawyers hired by the insurance company to protect both of the aforementioned parties in case of lawsuit. 

Attorneys will also help the insurer cross all the “T’s” and dot all the “I’s” to reduce the opportunity for a third party to sue. The insured can also hire insurance attorneys to protect them in case an insurer decides not to pay up when it should. Keep in mind that insurance companies are rich for two reasons: first, they push people to purchase insurance even when statistically unnecessary (i.e. make sure you have it before you need it) and second, they do everything in their power to find a reason not to pay out claims.

Even attorneys who don’t practice insurance law will know a little about the subject. Personal injury attorneys will routinely represent car accident victims — and getting compensation for those victims often includes in-depth discussions with car insurance providers who represent both the victim and the person at fault. Real estate or estate planning attorneys will nearly always recommend that clients take out homeowners insurance policies. They know the ins and outs.  

The short answer to the second part of our question — who needs insurance? — is simple: Everyone needs insurance. Whether we like it or not, that’s how the system works.

Could A Conservative-Dominated Supreme Court Destroy Health Insurance For Millions?

This question has been propelled to the top of the list ever since Trump and McConnell fought to ram through a new Supreme Court nominee weeks ago: Will a 6-3 conservative-led Supreme Court fight to abolish the Affordable Care Act (ACA)? Depending on whether or not you support Obamacare, you might not like the answer. Truth be told, the ACA has been attacked for years, and many GOP government officials have made their distaste for the law very well known.

The moment that Trump made his nomination of Barrett, healthcare stocks began to react volatilely. 

Jefferies health care analyst Brian Tanquilut had warned: “It sounds like the Republicans are really gonna push for a Supreme Court nominee approval before the new administration (and) the fear is that the ACA will be probably repealed. I’m not sure that’s necessarily the case, but obviously that’s the fear that’s been baked into the stocks right now.”

Regardless of the outcome of the election, things were never going to get less uncertain than they are right now. There is a small amount of good news. During Obama’s time in office, the GOP members of the Senate made dozens of votes to repeal and replace Obamacare knowing they didn’t have enough votes to get anything done), but once Trump made it into office, and they might have been able to make waves, they stopped holding votes. In other words, it might all have been for show in order to retain the appeal of their constituents.

Unfortunately, that doesn’t mean a conservative-led Supreme Court won’t do what a conservative-led Senate wasn’t willing to do themselves. But Professor Nicholas Bagley of the University of Michigan Law School acknowledges that the balance of power is shifting so much that no one really knows what will happen.

He said, “If the case gets argued in front of a new Supreme Court with a new justice, the center of gravity and the court will no longer be with Chief Justice Roberts, who has turned away too much stronger challenges to the law. It’ll be with the other conservative justices.” 

Democrats need to start winning over “purple” states like Texas if they want to cement their chances of winning state, local, and federal elections over the long-term — as doing so is the only way to ensure that civil rights and well-liked healthcare programs (like the ACA) stay in place for years to come. Even should Democrats continue winning elections, though, the Supreme Court is still lopsided in favor of conservative voices, which means that the ACA remains in a state of constant peril for years to come.

Texas Senator John Cornyn made his opposition to the ACA clear weeks ago during a press conference at City Hall in Dallas, even though he admitted that he favored coverage based on preexisting conditions. To keep the ACA safe, officials like him need to continue to be kept away from higher office.

A ruling five years ago upheld many core tenets of the ACA:

Can We Make Coal And Oil Companies Liable For Climate Change Effects?

Remember when we held tobacco companies who made millions off of an addictive product liable for the damage that product caused? Yeah, well, some people are trying to apply the same kind of liability to coal and oil companies. Although the debate rages on, there’s no secret: burning coal and oil releases carbon into our atmosphere. Carbon is a greenhouse gas. That means it heats our planet. The more of it up in the sky, the warmer it is down here on the ground.

But lawsuits that would hold coal and oil accountable for the disastrous effects of man-made climate change (in part, at least) have so far been unsuccessful.

They came to a head when Exxon Mobil recently won a lawsuit lodged by New York State’s attorney general, who wanted someone to take responsibility for the damage that had been done. After all, that damage will last for centuries — or perhaps, even, forever.

But don’t think that it’s over just because the one lawsuit failed.

Students in Florida have sued state government officials for doing little to nothing to combat the growing effects of climate change. One suit went down the tubes, but another is showing signs of momentum before heading to court. Part of the reason is publicity. Public outcry can change a judge’s mind quite fast. 

Relatively unheard of in the 80s and 90s, climate cases multiplied dramatically in 2007 and then again a decade later in 2017. We expect they will continue to multiply in the future as more and more people begin to understand the real consequences of releasing greenhouse gases into the atmosphere like it would never make a difference.

Director of the Rockefeller Family Fund Lee Wasserman said, “Through these cases, we will learn with great detail what the industry knew and when they knew it, and what they did to deceive the public about that knowledge. They are now leaving the public with an enormous bill.”

And in fact that might make all the difference: We already know that many big coal and oil companies did their own internal studies on the effects of releasing carbon into the atmosphere. Those studies came to the same conclusion as other climate scientists have in the decades since, i.e. that releasing greater amounts of carbon will result in catastrophic weather events, sea rise, and mass extinctions on a greater scale than anytime in the history of the world.

And these cases will eventually change the way insurance companies sell, say, flood or fire coverage. For example, you can’t find flood insurance down in Key West because everyone knows that it’ll be underwater sooner or later — and probably sooner. And is that fair? Courts will soon have their say.

Some Insurance Attorneys Forget They Are Held To A Higher Standard

There are plenty of cases in which attorneys fail to keep track of their clients’ actions — and are subsequently rebuked, sanctioned, or even slammed with contempt of court charges for not doing their job. But sometimes the tensions can run so high in important cases that a lawyer will start behaving like a rambunctious teenager. That’s what happened during an insurance litigation case against Allstate.

Attorney Christopher G. Hook wrote Allstate executives: “Pay up f—face.”

That was a somewhat inept attempt at persuasion for a lawyer trying to achieve a whopping nine-figure settlement on behalf of his clients, who may not have known that about his behavior at the time. Hook then wrote: “You are going to get [expletive] tattooed across the face.” Finally, “Tell Allstate I am going to water board each one of their trolls that show up for [depositions] without any mercy whatsoever.”

He then made personal threats to some of the Allstate attorneys, alleging that he knew where they lived.

Hook might have sounded like a shark had he managed to maintain some semblance of a professional attitude during the case. Allstate’s attorneys, not so surprisingly, decided to cut off correspondence when the cursing started.

When a judge decided Hook should stop practicing law, the reply was simple: it was all a part of smart negotiation!

United States District Judge Otis D. Wright II, who was appointed by George W. Bush, said, “Tell you what, slick, this profession does not need you. I am going to do what I can to remove you from this profession.”

Sometimes attorneys forget the far-reaching power of judges to make their lives — and the lives of their clients by association — an absolute nightmare. Hook refused to resign, prompting Wright to take up legal arms against him.

But resigning doesn’t matter if you have no more clients to represent. The homeowners quickly fired Hook when they found out about his backstage business with Allstate.

Hook seems to have pretended it didn’t happen, who wrote The Post: “I will continue to represent the interests of my clients and California consumers against the powerful interests of insurance companies.”

Hook defended his language by suggesting it was on par with what he experienced from insurance executives while defending them earlier in his career.

He said, “It’s a business that profits from risk and fear and human misery.” Having worked for such people a long time ago, he admitted, “I was kind of talking to myself.”

Officials Warn To Be Careful Where You Buy Insurance Outside Federal Marketplace

It’s that time of the year again — time to sign up for Obamacare! Those who are currently without access to healthcare can browse through a number of plans on But health experts have warned would-be buyers looking for plans outside of the federal marketplace to watch out for the so-called “junk insurance” plans that have popped up due to new laws signed by the Trump administration. 

Those plans don’t meet the standards of the Affordable Care Act (ACA). 

The Supreme Court will soon hear a case that will determine whether or not insurers are reimbursed $12.3 billion to which they believe they are entitled. We should have an answer before the Senate goes on recess in summer next year.

According to insurer Land of Lincoln Health, the company is down over $75 million that it should have been able to recover from the risk corridor program under the ACA. 

Risk Corridors are a provision of the ACA. They “limit the risk borne by qualified health plans on the insurance marketplaces. Risk Corridors are a mechanism to minimize the year-end losses of insurers who covered a disproportionate share of sicker, often older, insured customers. The federal government, through the Department of Health and Human Services, agrees to cover 50% of the excess costs borne to insurers if those costs exceeded premiums by 3-8%.”

Land of Lincoln Health says that their monthly premiums were set low due to the provision. In addition, insurers Moda Health Plan, Blue Cross and Blue Shield of North Carolina, and Maine Community Health Options are all suing as well.

A federal appeals court has already ruled that the Risk Corridor provision of the ACA was non-binding, and that it was more of a description of what an optimal system should look like. The Supreme Court has been asked and subsequently agreed to review the previous rulings.

America’s Health Insurance Plans (AHIP) CEO Matt Eyles said, “The Supreme’s Court’s decision to hear this case recognizes how important it is for American businesses, including health insurance providers, to be able to rely on the federal government as a fair and reliable partner. Strong, stable and predictable partnerships between the private and the public sector are an essential part of our nation’s economy, and our industry looks forward to having this matter heard before the Court.”

Association for Community Affiliated Plans (ACAP) CEO Margaret Murray said, “We’re pleased that the Supreme Court has agreed to hear the case, as it gets to the heart of the concept of the full faith and credit of the United States government. We asked the appeals court in an amicus brief to affirm that the Federal government should be as good as its word in statute, and urge the Supreme Court to do the same.”

The Supreme Court Case: United States vs South Eastern Underwriters Association Explained

The  Supreme Court case United States vs the South-Eastern Underwriters Association is known because the outcome inspired the McCarran-Ferguson Act, which gave Congress the power to help regulate the Insurance industry.

The case took place in 1942. The Attorney General of Missouri requested the case because the insurance regulators in Missouri felt that they were not able to correct abuses that had been taking place since the 1920s. The Department of Justice investigated the case, and a grand jury then indicted the South-Eastern Underwriters Association, as well as many of their officers and member companies. The defendants were charged with two counts of antitrust violations as well as conspiracy to fix premium rates for fire insurance policies, boycotting independent sales agencies that did not comply. They were also charged with monopolizing markets in several states.

The district court dismissed the indictment, noting that the business of insurance is not commerce and that while it might be considered trade that is subject to local laws, the commerce clause is not to be relied upon.

The question that the Court formulated for the case was whether or not the Commerce Clause gave Congress the power to regulate insurance companies (from health insurance, to social security and disability insurance, to homeowners and life insurance) doing trade across state lines. The Supreme Court had, for the last 80 years, held the belief that insurance is not a commerce transaction, and this is what the case tested. The case in the Supreme Court ruled that the Sherman Act was intended to cover monopolization and that the sales of insurance was indeed a form of commerce that Congress could regulate.

In response to this, the McCarran-Ferguson Act was passed in 1945, giving formal protection to states to allow them to regulate their own insurance transactions, and limiting the way that insurance could be regulated on a federal level. The act still stands now, although it could be modified to change how health care insurance is treated.

Summary Of Paul v. Virginia In 1869

In 1868, the U.S. Supreme Court ruled that states could regulate insurance sales and issuance. The deciding factor, according to the Court was that insurance sales were not interstate commerce. This case was brought by the National Board of Fire Underwriters. The purpose of the case was to challenge the states’ ability to regulate insurance sales.

In the 19th century, life and fire insurance companies began marketing products nationally. In an effort to encourage local enterprise, states began levying license fees and taxes on insurance companies that were not based in the state. This type of legislation was mostly focused on the large insurance companies headquartered in the Northeast United States.

Paul v. Virginia became a landmark case for states’ rights. Paul was an insurance agent for several New York state fire insurance companies. He was selling insurance in Virginia and was convicted for selling insurance without a license under Virginia law.

Paul lived in Virginia and was a resident of the Commonwealth. He was appointed to sell insurance against fire by several New York insurance companies. He applied for a license with the state, but did not deposit bonds with the state treasurer and was refused the license.

The insurance company lawyers argued that their corporations should be considered citizens and be covered under Article IV and the Privileges and Immunities Clause. The ruling by the Supreme Court denied this argument and found that corporations were not citizens as defined by this clause.

In a later 1944 ruling in United States v. Southeastern Underwriters Association, the court found that insurance was interstate commerce, however by this time state regulatory systems were well-defined. Congress strengthened the states’ positions in 1945 when they authorized the McCarran-Ferguson Act and recognized state insurance regulation.

This ruling also held that the federal government could regulate insurance transactions under the Commerce Clause. To date, this ruling has not been reversed.