We study the optimal insurance design problem. This is a risk sharing problem between an insured and an insurer. The … for the insurance cover. This risk-adjusted premium calculation principle uses the cost-of-capital approach as it is … suggested (and used) by the regulator and the insurance industry. …

This paper demonstrates the existence of adverse selection in the group insurance market with no individual choice. We … provide evidence against the “conventional wisdom” that group insurance mitigates adverse selection because of the mixture of …