Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/64127
Authors: 
Stoyanova, Rayna
Schlütter, Sebastian
Year of Publication: 
2012
Series/Report no.: 
ICIR Working Paper Series 10/12
Abstract: 
Insurance regulation is typically aimed at policyholder protection. In particular, regulators attempt to ensure the financial safety of insurance firms, for example, by means of capital regulation, and to enhance the affordability of insurance, for example, by means of price ceilings. However, these goals are in conflict. Therefore, we identify situations in which regulators should be more concerned with safety or, alternatively, affordability. Our model incorporates default-risk-sensitive insurance demand, capital-related frictional costs, and imperfect risk transparency for policyholders.
Subjects: 
Insurance Regulation
Regulatory Targets
Welfare
Opaqueness
Document Type: 
Working Paper

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