Recent events involving major insurance companies and insurance brokerage firms highlight substantial incentive …

intermediary to impose redemption fees or gates in a crisis - a form of suspension of convertibility - can lead to preemptive runs … uncertainty is resolved before redeeming if redemption fees or gates cannot be imposed, but those same investors would redeem … preemptively if fees or gates are possible. Second, we show that for the intermediary, which maximizes the expected utility only of …