After seven years and countless drafts and revisions, the American Law Institute’s Restatement of the Law of Liability Insurance is scheduled for a final vote at the ALI’s Annual Meeting in Washington, D.C. on May 23, 2017.  Even as the project Reporters (Professors Tom Baker and Kyle Logue) start to contemplate life after this Restatement, a new challenge has surfaced that threatens the future of the project.

On April 5, the ALI posted a letter from Dean L. Cameron, the Director of the Idaho Department of Insurance.   In his letter, which was addressed to the Executive Director of the ALI, Cameron urges the ALI to defer final approval of this Restatement in light of its potential implications for the sale and regulation of liability insurance:

Dear Director Revesz,

The ALI’ s Restatement, Liability Insurance project proposes revisions in insurance law as well as black-letter rules. Not only are the proposed revisions and rules of concern to the insurance industry and policyholders, they may also be of concern to regulators. The proposed changes could significantly alter the course of doing business ergo, its regulation.

The Idaho Department of Insurance respectfully requests that the finalization of the Restatement, Liability Insurance project be delayed to a date later than May 2017, allowing state regulators the opportunity to weigh in on important issues raised by the proposed Restatement. This topic has just now come to the attention of our legal department which requires time to delve into this complicated topic in order to advise and submit an opinion.

Thank you for your attention to this matter and consideration of delaying the finalization of the Restatement, Liability Insurance project.

As yet, it does not appear that a formal response has been issued, nor is it clear whether similar requests have been submitted by other state regulators or may be forthcoming.