This article discusses key issues that policymakers should consider when evaluating potential changes to U.S. insurance regulation in the aftermath of the financial crisis, including implications of both the Dodd-Frank Act and the Solvency II initiative in the European Union. Fundamental...

Mutual insurers generally face higher costs of raising new capital than stock insurers. Other things being equal, the higher costs of raising capital should cause mutual insurers to have higher ex ante target capital to liability ratios than stock insurers. Mutual insurers' capital ratios also...

Following Becker's (1993) suggestion that tests for discrimination should attempt to infer whether profits differ for products sold to minorities and nonminorities, this article tests the hypothesis that racial discrimination affects market prices of auto insurance in Missouri. Compared with...

This article analyzes alleged underpricing of general liability insurance prior to the mid-1980s liability insurance quot;crisis.quot; The theoretical analysis considers whether moral hazard and/or heterogeneous information for forecasting claim costs can cause some firms to price too low and...

This paper provides estimates of the changes in premiums, average or expected out of pocket payments, and the sum of premiums and out of pocket payments (total expected price) for a sample of consumers who bought individual insurance in 2010 to 2012, comparing total expected prices before the...

The combination of risky cash flows, leverage and absolute priority rules in bankruptcy create a well known agency problem; shareholders face incentives to take risky, as opposed to value maximizing, investment projects. Recently, it has been argued that deviation from absolute priority rules in...

The use of captive reinsurance arrangements in life insurance has generated significant debate and led to recent adoption of new regulatory requirements by the National Association of Insurance Commissioners (NAIC). This paper provides an overview of the regulatory reserve requirements that...

This paper estimates the change in net (of subsidy) financial burden (“the price of responsibility”) and in welfare that would be experienced by a large nationally representative sample of the “non-poor” uninsured if they were to purchase Silver or Bronze plans on the ACA exchanges. The...

This paper provides an overview of the rationale and options for federal intervention in insurance regulation. Despite a number of positive and incremental reforms throughout the past decade, several key aspects of state insurance regulation, including regulation of rates, rate classification,...

We demonstrate analytically that cross-sectional variation in the effects of events, i.e., in true abnormal returns, necessarily produces quot;event-inducedquot; variance increases, biasing popular tests for mean abnormal returns in short-horizon event studies. We show that unexplained...