Are Your Torture Insurance Premiums Paid Up?
Since it now appears quite likely that certain CIA officers are going to be charged with torturing detainees, I figured it was time to dust off a three year old post: Is Torture Insurance a Smart Investment?
My conclusion then – which still holds – is that the insurance companies would have a pretty good shot of repudiating such insurance contracts on public policy grounds, though they’d probably then have to disgorge any premiums paid to date. That’s not to say that insurance companies are going to repudiate the contracts – reputational concerns in this market are pretty important – but I think they could.
That’s a bad approach for the law to take. Putting aside moral hazard issues, which presumably the insurance companies had to think they had a way to price, there are larger social concerns in the balance. Let’s say you think that its generally good for the new administration to be able to change its position on something like torture. To preserve that freedom, it’s particularly important to provide some kind of back-end reliance protection for agents of the old regime, or the old regime will work twice as hard to entrench their position against change. (Imagine if the Bush administration’s lawyering here had been moderate and compentent!) It’s better for that reliance protection to be the prospective payment of legal fees, rather than immunity from prosecution. Insurance enables the litigation of claims, and the disinfectant of trial, while immunity doesn’t. Thus, torture prosecution insurance, and some other forms of insurance against socially harmful conduct, ought to be generally enforceable in court.