AIA, PCI Issues Joint Statement on NCOIL’s Letter

WASHINGTON, Nov. 29 -- The American Insurance Association issued the following joint statement with Property Casualty Insurers Association of America:

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At its annual meeting, NCOIL's Property & Casualty Committee unanimously approved sending a letter and resolution to the American Law Institute (ALI) expressing concerns regarding the proposed Restatement of the Law, Liability Insurance. After NCOIL sent the letter to ALI, the American Insurance Association (AIA) and the Property Casualty Insurers Association of America (PCI) issued the following statement:

"We are pleased that NCOIL has continued to voice strong concern regarding ALI's proposed Restatement of the Law, Liability Insurance. The Restatement's departure from current case law on liability insurance and the consequent failure to show proper deference to state legislative jurisdiction and expertise is troubling. AIA and PCI share the concerns outlined by NCOIL, as well as its suggested actions to bring the Restatement back into line with current law and the long-standing principles of the ALI.

"AIA and PCI agree with NCOIL that, absent meaningful change, the Restatement should not be recognized by courts as an authoritative reference regarding established rules and principles of insurance law.

"We look forward to working with ALI on addressing the sections of the Restatement that stray from sound, fundamental insurance contract law and may have adverse consequences for policyholders and the insurance marketplace."

Background:

Largely unknown to the public, the ALI, a private group of lawyers and legal scholars, provides judges and lawyers with "Restatements," written documents that "aim at clear formulations of common law... as it presently stands or might appropriately be stated by a court." For nearly a century, these documents have been looked upon as authoritative summaries and continue to be regularly cited by judges- almost like a trusted court-side companion for staying within the boundaries of the common law.

In recent years, however, the ALI has begun drafting Restatements that are neither clear nor reflective of the actual law. To the contrary, these Restatements have been more aspirational - not neutrally describing the current state of the law, but instead directing where the authors think it ought to go.

The American Insurance Association (AIA) is the trade association for today's leaders in the property-casualty insurance industry. Our members work each day to protect the American Dream, whether that's a house, car, business or otherwise. Now more than 150 years old, AIA has an unparalleled record of advocating on state, federal and international issues for insurers and their customers.

Our membership is comprised of more than 320 companies, collectively writing more than $125 billion in premiums each year.

We have the experience of a veteran organization coupled with the innovative ideas that drive our industry forward. AIA is leading the insurance industry into the second half of the 21st Century... today.