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dc.contributor.authorSchlütter, Sebastianen_US
dc.date.accessioned2012-09-21en_US
dc.date.accessioned2012-09-21T12:33:43Z-
dc.date.available2012-09-21T12:33:43Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/64136-
dc.description.abstractDepending on the point of time and location, insurance companies are subject to different forms of solvency regulation. In modern regulation regimes, such as the future standard Solvency II in the EU, insurance pricing is liberalized and risk-based capital requirements will be introduced. In many economies in Asia and Latin America, on the other hand, supervisors require the prior approval of policy conditions and insurance premiums, but do not conduct risk-based capital regulation. This paper compares the outcome of insurance rate regulation and risk-based capital requirements by deriving stock insurers' best responses. It turns out that binding price floors affect insurers' optimal capital structures and induce them to choose higher safety levels. Risk-based capital requirements are a more efficient instrument of solvency regulation and allow for lower insurance premiums, but may come at the cost of investment efforts into adequate risk monitoring systems. The paper derives threshold values for regulator's investments into risk-based capital regulation and provides starting points for designing a welfare-enhancing insurance regulation scheme.en_US
dc.language.isoengen_US
dc.publisherInternational Center for Insurance Regulation, House of Finance, Goethe University Frankfurt am Mainen_US
dc.relation.ispartofseriesICIR Working Paper Series 03/11en_US
dc.subject.ddc330en_US
dc.subject.stwVersicherungsprämieen_US
dc.subject.stwBetriebliche Preispolitiken_US
dc.subject.stwSolvency IIen_US
dc.subject.stwBasler Akkorden_US
dc.subject.stwVersicherungen_US
dc.subject.stwRegulierungen_US
dc.subject.stwWohlfahrtsanalyseen_US
dc.subject.stwTheorieen_US
dc.titleCapital requirements or pricing constraints? An economic analysis of measures for insurance regulationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn719842158en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
dc.identifier.repecRePEc:zbw:icirwp:0311-
Appears in Collections:ICIR Working Paper Series, International Center for Insurance Regulation, Universität Frankfurt

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