A Report on the Liability Insurance Crisis in the State of California

OVERVIEW

This study identifies five major factors in the liability insurance crisis in California, including the evolution of tort reform, lack of predictability in risk assessment, unsound rate-setting practices, withdrawal of the reinsurance market, and the Insurance Commissioner’s lack of authority in the rate-setting process.

The report contains 16 findings and 16 recommendations, which include establishing a “cap” on the recovery of compensatory damages in personal injury actions; prohibiting collusion between plaintiffs and settling defendants; and establishing a stricter burden of proof for punitive damages.