Risk classification refers to the use of observable characteristics by insurers to group individuals with similar … expected claims, to compute the corresponding premiums, and thereby to reduce asymmetric information. Permitting risk … undesirable equity consequences and undermine the implicit insurance against reclassification risk which legislated restrictions …

Despite the use of VaR as a means to control risk, using VaR can have the opposite effect. VaR is used by bank and … insurance regulators more than any other risk measure. A value-at-risk (VaR) constraint on the probability that future firm … systemic risk, the large banks, to use VaR constraints thereby encouraging the banks to which the global financial system is …