Author: Paul L. GronewollerPublisher:
ISBN:
Category :
Languages : en
Pages : 312
Book Description
A Contingent Claims Analysis of the Impact of Rate Regulation on Property-liability Insurance Price Levels
Author: Paul L. GronewollerPrice Regulation in Property-liability Insurance
Author: Neil A. DohertyFair Rate of Return in Property-Liability Insurance
Author: J. David CumminsPublisher: Springer Science & Business Media
ISBN: 9401577536
Category : Business & Economics
Languages : en
Pages : 164
Book Description
Property-liability insurance rates for most lines of business are regulated in about one-half of the states. In most cases, this me ans that rates must be filed with the state insurance commissioner and approved prior to use. The remainder of the states have various forms of competitive rating laws. These either require that rates be filed prior to use but need not be approved or that rates need not be filed at all. State rating laws are summarized in Rand Corporation (1985). The predominant form of insurance rate regulation, prior approval, began in the late 1940s following the V. S. Supreme Court decision in United States vs. South-Eastern Underwriters Association, 322 V. S. 533 (1944). This was an anti trust case involving one of four regional associa tions of insurance companies, which constituted an insurance cartel. The case struck down an earlier decision, Paul vs. Virginia, 8 Wall 168 (1869), holding that the business of insurance was not interstate commerce and hence that state regulation of insurance did not violate the commerce clause of the V. S. Constitution. Following South-Eastern Underwriters, the Vnited States Congress passed the McCarran-Ferguson Act, which held that continued state regulation and taxation of insurance was in the public interest. The act also held that the federal antitrust laws would not apply to insurance to the extent that the business was adequately regulated by state law. (See V. S. Department of Justice 1977.
The Impact of Rate Regulation in U.S. Property-liability Insurance Markets
Author: J. David CumminsThe Valuation of Property-Liability Insurance Contracts Under Frequency and Severity Risk
Author: Jiun-Fei ChiouPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
In order to regulate the pricing of property-liability insurance contracts, this study, based on the theory of contingent claim valuation, develops the insurance pricing formulas, which will lead to fair insurance pricing. Firstly, this study constructs a general valuation model for property-liability insurance contracts, which takes into account the cash flows consisting of both the claim indemnity and the investment income incurred during the insurance coverage period. Various risks will influence the stochastic processes followed by the claim indemnity and the investment income, respectively. Secondly, to obtain a closed form solution of the pricing formula, this study considers the specific case in which the insurer confronts with the frequency and severity risk, and thence derives a pricing formula, into which the jumps incurred in claim indemnity are considered. The results show that the pricing of property-liability insurance contracts will depend on the ratio of the claim indemnity relative to the investment income. Furthermore, the jumps incurred in claim indemnity will exert significant impact upon both the assets and liabilities of the insurer. Hence, the price of property- liability insurance contracts will also increase drastically with these jumps.
Strategic Opportunities in the Property and Liability Insurance Industry
Author: Serng Jae KimPublisher:
ISBN:
Category : Insurance
Languages : en
Pages : 424
Book Description
Dissertation Abstracts International
Author: Publisher:
ISBN:
Category : Dissertations, Academic
Languages : en
Pages : 704
Book Description
Policy Form and Rate Regulation in the Property-liability Insurance Market
Author: Junhao LiuPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
The regulation of financial products plays an important role in U.S. financial markets. While there are benefits to regulation, policymakers must weigh these benefits against the costs. This dissertation studies the costs of complying with policy form and rate regulation in the U.S. property-liability (P/L) insurance market. In the first chapter, we estimate the cost of complying with regulation by exploiting the rich cross-sectional and time-series variation in regulation, focusing on the regulation of policy forms. The costs of complying with stringent form regulation are significant, approximately 3.1 percent of the general expenses for the average insurer per line of business and year-$1.8 billion for the industry per year. The compliance costs are higher in personal lines of insurance. The burden of these costs falls unevenly on insurers, with the regulatory effects isolated to the firms writing less than $5 million in premiums in a line of business per year. A potential way to reduce regulatory compliance costs is the use of digital technology to streamline the regulatory process. In Chapter 2, we leverage a quasi-experimental policy change which mandates use of an internet-based flow management tool that enables insurers and regulators to exchange form and rate filing information, and find that digitization lowers the costs of complying with regulation. The average insurer per line of business and year in the highest quartile regarding the proportion of business under the mandate saves 4.8 percent of general expenses. Our results also suggest a fixed cost of adopting the technology, with larger cost-saving accruing to firms that adopt the new technology more widely. While Chapters 1 and 2 are closely related, the scope of the cost estimation is different in the two chapters. Chapter 1 focuses on the policy form regulation, and it contrasts stringent form regulation with non-stringent form regulation by measuring the \textit{extra} costs of complying with stringent regulation compared to other types of regulation. In Chapter 2, we consider policy form and rate regulation as a whole and measure the costs of complying with all types of regulation. The two chapters complement each other and, in combination, provide empirical evidence of the costs of insurance product regulation.
The Cost of Capital and Rate Regulation of Property-liability Insurance Companies
Author: Kyung Lyong LeePublisher:
ISBN:
Category : Liability insurance
Languages : en
Pages : 482
Book Description
A Contingent Claims Analysis of the Equity Interest in Property-casualty Insurance Companies
Author: Wallace Quentin WeaverPublisher:
ISBN:
Category : Casualty insurance claims
Languages : en
Pages : 318
Book Description