Insurance, Equity, and Justice Roundtable Discussion

Police in St. Ann, Missouri, used to engage in high-speed chases even for minor offenses such as expired license plates – promising that “St. Ann will chase you until the wheels fall off.” Predictably, that policy produced serious injuries and multiple lawsuits with big payouts. Neither government officials nor advocates could convince the police department to change the destructive practice. Then the department’s insurers stepped in: change the policy or forego coverage. The police chief changed his policy, reducing risk, increasing public safety, and improving community/justice relations. Are there strategies for scaling this approach where insurers’ business interests in managing police department risks and reducing claims payouts might align with a municipality’s interests in protecting its residents and keeping down tax costs?

Some employers – especially those in industries with worker shortages – may unnecessarily filter out qualified candidates because of their criminal record and fears of liability for “negligent hiring”. Could the combined expertise and research of social justice advocates and insurers’ actuarial expertise and data analytics capacity result in risk management practices that are effective without unnecessarily limiting candidate pools? How could insurers update underwriting guidelines and rates to support employers who adopt fair chance hiring best practices?

About half the states in the U.S. suspend the driver’s licenses of people who cannot afford to pay the steep fines and fees imposed for traffic tickets, toll violations, uninsured driving, and misdemeanor and felony convictions. The result is millions of people with suspended licenses – and no car insurance – not because they are dangerous drivers, but because they are struggling financially. A recent study about Florida shows these debt-based license suspensions exacerbate statewide labor shortages, contribute to the highest rates of uninsured drivers nationally, disproportionately impact people of color, and raise car insurance premiums for all Floridians.  Might auto insurers weigh in with state policymakers to reform license-for-payment practices and in the process expand their market? Could they factor in the reason for a license suspension when setting rates? Would carriers participate in research about the intersection of insurance premiums, uninsured driving, and driver’s license suspensions?

Capital punishment in the U.S. is predominantly implemented by lethal injection despite the pharmaceutical manufacturing industry uniformly opposing this misuse of their life-saving medicines. Accordingly, most have developed policies and controls to protect their medicines from misuse. Some of the ones that were slow to act and whose drugs were used in US executions have faced costly lawsuits, negative press, and regulatory action. There are, however, some actors in the industry who remain exposed, including compounding pharmacies, and in turn their insurers. At least one insurer recently implemented a due diligence policy for their insureds clarifying that if they identify a practice of knowingly marketing and distributing drugs for the purpose of lethal injection, the insurer may issue exclusionary wording or decline to insure the business. Can this approach be more widely adopted among pharmaceutical and pharmacy / healthcare insurers?

The Consumer Financial Protection Bureau recently reached a settlement in its lawsuit against a debt-collection firm for illegal practices all too common in the debt collection industry. The court-ordered protocols, including retaining proper documentation of a debt before filing a debt-collection lawsuit, read like potential underwriting standards. Could this kind of law enforcement action guide insurer debt-collection standards and training to promote fairness and lawful collection practices, and reduce risk and the occurrence or severity of claims?