Bernier, Gilles; Mahfoudhi, Ridha M. - In: Journal of Risk & Insurance 77 (2010) 4, pp. 857-892
This article proposes a model that suggests there are contagion effects among members of an insurance guaranty fund when postassessments are charged to all other insurers upon the failure of a member company. Indeed, these extraordinary payments are shown to increase the default rate of other...