Statement of Signing the Product Liability Risk Retention Act of 1981
September 25, 1981
I have today signed into law H.R. 2120, the Product Liability Risk Retention Act of 1981. I am pleased to have the opportunity to approve this much-needed legislation.
During the 1970's many businesses, especially smaller ones, experienced severe increases in their product liability insurance premiums. Others had difficulty obtaining needed coverage. The Interagency Task Force on Product Liability, chaired by the Department of Commerce, and its successor, the Task Force on Product Liability and Accident Compensation thoroughly studied the problems. The Product Liability Risk Retention Act is an outgrowth of the Federal Government's efforts to address the concerns identified by the Federal task forces and numerous citizen groups.
This act is a marketplace solution designed to provide product manufacturers, distributors, and sellers with affordable product liability insurance. In keeping with this administration's policies, this goal is accomplished without imposing any new Federal regulations or expenditures. The act, respecting the rights of States to regulate the insurance industry within their borders, utilizes existing mechanisms of State insurance departments, streamlined to address the specific needs for regulating this type of insurance. In particular, the act removes selected State regulatory barriers so that product sellers can form self-insurance cooperatives or purchase product liability insurance from commercial insurers on a group rate basis.
By making product liability insurance more easily available and affordable, the best interests of the consumer are also served. Not only will participating companies have lower insurance costs, and hence lower operating costs, but consumers will also benefit by the added protection provided to them through more widespread utilization of product liability insurance.
In short, the act is a good example of how the Federal Government can resolve a nationwide problem without creating additional programs or agencies.
This has been a bipartisan effort. Members of both the House and Senate deserve a great deal of credit for forging a solution which is so widely supported by the small business, insurance, and legal communities.
Note: As enacted, H.R. 2120 is Public Law 97 - 45, approved September 25.