Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102683
Authors: 
Pape, Annika
Year of Publication: 
2013
Series/Report no.: 
University of Lüneburg Working Paper Series in Economics 299
Abstract: 
How should intermediaries influence the insurance demand decision? The answer must refer to the interdependence of economic determinants and legal duties. Intermediaries potentially guide demand decisions by delivering objective information and by considering individuals' situation and economic circumstances. The economic theory provides determinants that are essential for the insurance demand decision. Undoubtedly, consumers lack information about certain variables, and therefore misjudge their demand for insurances. In response to the consumer, an intermediaries' task is to discover possible misjudgments and to provide the correct information. Since the information in the insurance market is asymmetrically distributed, an insurance agent has an incentive to behave opportunistically, a tendency that is reinforced by the remuneration scheme in Germany. In 2007/2008, insurance intermediaries became regulated by law. That law states, among other things, the four basic obligations of insurance intermediaries and a liability rule to sanction violations. In order to interpret and substantiate the legal terms, those have to match the relevant economic determinants to state the ideal behavior of an intermediary.
Subjects: 
insurance
insurance intermediation
advice
liability
Insurance Contract Act
JEL: 
G22
D83
D89
K29
K40
Document Type: 
Working Paper

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