This study examines how tort reform affects uncertainty in insurance markets by testing whether noneconomic damage caps influence reserving volatility for medical malpractice insurers. Using a panel of insurers from 1986 to 2009, we estimate the determinants of loss reserve error volatility and focus on how this volatility is influenced by the percent of premiums an insurer writes that are subject to noneconomic damage caps. We find empirical evidence that tort reform reduces reserve volatility over the subsequent 3- and 5-year periods, consistent with tort reform improving insurers’ loss forecasting ability. Our findings address outcomes of tort reform that are prominent concerns of legislators, regulators, and policyholders. This article contributes both to the literature examining the insurance market effects of tort reform and to the literature examining loss reserving practices.

这项研究通过测试非经济损害赔偿上限是否会影响医疗事故保险公司的准备金波动，研究了侵权行为改革如何影响保险市场的不确定性。我们使用1986年至2009年的一组保险公司，估计损失准备金误差波动率的决定因素，并着眼于这种波动率是如何受到保险公司所写保费百分比的影响的，而保费收入受非经济损失上限的限制。我们发现经验证据表明，侵权改革降低了随后3年和5年期间的准备金波动性，这与侵权改革提高了保险公司的损失预测能力相一致。我们的研究结果针对的是侵权法改革的结果，这是立法者，监管者和投保人关注的重点。