SD11 - The Liability Insurance Crisis and the Need for Tort Reform

  • Published: 1987
  • Author: Joint Subcommittee
  • Enabling Authority: Senate Joint Resolution 22 (Regular Session, 1986)

Executive Summary:
Following a comprehensive evaluation of the process by which liability insurance coverage is made available to the public and the process by which damages for civil wrongs are assessed and paid, a majority of the joint subcommittee makes the following recommendations:

1. That liability insurers be encouraged to utilize credible loss experience from Virginia in setting premium rates to be charged Virginia insureds to assure that Virginians reap the benefits of our relatively stable loss environment;

2. That commercial liability insurers be required to submit more detailed information on their direct experience in Virginia with respect to identified lines and subclassifications of insurance which have historically experienced availability and/or affordability problems and which it is anticipated will continue to experience such problems to provide additional data to be used in rate making and to better monitor any future problems;

3. That a closed-claim reporting requirement be adopted to facilitate a review of the claims experience of liability insurers and provide more data for policy analysis and decision making;

4. That the general provision which tolls the statute of limitations during the minority of an injured person be modified as it applies to medical malpractice actions brought on behalf of a minor in order to provide more predictability to the loss assessment process, reduce the risks of providing coverage for these losses and, thereby, make the necessary liability insurance coverage more widely available at a more reasonable cost;

5. That emergency obstetrical services be covered under the "Good Samaritan Statute" in order to ensure that such services continue to be available to indigent women.

6. That limitations be placed on the potential liability of corporate officers and directors and members of local governmental boards in order that qualified 1ndividuals will continue to serve in such positions;

7. That alternatives to mandatory insurance requirements, whether statutory or regulatory, be provided to alleviate hardships caused where such insurance becomes unavailable or unaffordable;

8. That most exemptions from jury service be eliminated to provide a broader cross-section of persons available for service and thereby improve the quality of justice dispensed;

9. That the courts be granted authority to impose sanctions on a party or counsel, or both, for asserting a frivolous claim or defense in a civil action;

10. That a limitation be placed on the amount of non-economic damages which may be awarded in order to strike a proper balance between affording an injured person his rightful compensation for losses incurred and providing a degree of predictability of loss exposure necessary to a system of compensation such as ours which is largely dependent upon the continued availability of insurance;

11. That payments on awards of future damages exceeding $250,000 be required to be made in installments rather than in a lump sum to provide a significant cost savings to the payor while equitably providing compensation to the injured party; and

12. That the joint subcommittee be continued to allow further consideration of the issues, specifically alternative methods of dispute resolution.