Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306401 
Year of Publication: 
2023
Citation: 
[Journal:] The Geneva Risk and Insurance Review [ISSN:] 1554-9658 [Publisher:] Springer Nature [Place:] Berlin [Year:] 2023 [Pages:] 1-37
Publisher: 
Springer Nature, Berlin
Abstract: 
When consumers are neither particularly financially literate nor price sensitive, insurers have a strong incentive to pay high commissions to intermediaries for profitable new business. As a part of cost reduction regulation in the German private substitutive health insurance market, a commission cap and a minimum cancelation liability period for insurance intermediaries were introduced in 2012. Despite the fact that the commission cap lowered commissions paid to intermediaries, we provide evidence that the reform was only partly effective, as it led to a decrease in reshuffling of new business in the substitutive market, but did not significantly reduce total acquisition costs of health insurers. Our findings confirm that cost regulation is tricky and can be easily circumvented by insurers, as commission payments are only a part of total acquisition costs.
Subjects: 
Insurance regulation
Health insurance
Commission cap
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.