The Impact Of Regulation On The Property Liability Insurance Industry
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A Comparative Analysis of Government Regulation of Property-liability Insurance in Selected Countries and the United States
| Author | : Samuel H. Weese |
| Publisher | : |
| Total Pages | : 212 |
| Release | : 1980 |
| Genre | : Insurance law |
| ISBN | : |
The Future of Insurance Regulation in the United States
| Author | : Martin F. Grace |
| Publisher | : Rowman & Littlefield |
| Total Pages | : 244 |
| Release | : 2009-12-01 |
| Genre | : Business & Economics |
| ISBN | : 0815703864 |
A Brookings Institution Press and Georgia State University publication Important changes have buffeted the insurance industry over the past decade. The 1999 repeal of key provisions of the Glass-Steagall Act unleashed a wave of conglomeration in financial services, as bank holding companies acquired insurance and securities businesses and, to a much lesser degree, insurance companies acquired securities firms and banks. Rivalry within the sector has intensified: insurance companies have developed products that compete directly with the offerings of banks and securities firms and vice versa. In addition, the industry has become increasingly global. Against this backdrop, pressure has been building for fundamental changes to the structure of insurance regulation in the United States. Despite several court challenges over the years, insurance continues to be regulated by the states. Many insurance companies view state regulation as an increasing drag on their efficiency and competitiveness and support a federal regulatory system. However, powerful stakeholders, including state officials, state and regional insurance companies, and many insurance agents, oppose federal regulation. As a result, proposals to establish an optional federal charter (OFC) for insurance companies and agents remain mired in fierce debate. The Future of Insurance Regulation in the United States gathers some of the country's leading experts on financial regulation to assess the case for an enhanced federal role in the insurance sector. They pay particular attention to the merits of an OFC and how it might be designed. They also consider the principles that should guide insurance regulatory policies, regardless of the institutional framework, and examine the implications of financial convergence and the internationalization of insurance markets for an optimal regulatory structure. The debate over insurance regulation has only grown in complexity and intensity since the financial crisis began in the fall of 2008. This book will both inform and help to shape those critical discussions. Contributors: John A. Cooke (International Financial Services London), Robert Detlefsen (National Association of Mutual Insurance Companies), Martin F. Grace (Georgia State University), Robert W. Klein (Georgia State University), Robert E. Litan (Ewing Marion Kauffman Foundation and Brookings Institution), Phil O’Connor (PROactive Strategies), Hal S. Scott (Harvard Law School), Harold D. Skipper (Georgia State University), Peter J. Wallison (American Enterprise Institute).
Policy Form and Rate Regulation in the Property-liability Insurance Market
| Author | : Junhao Liu |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
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.
Fair Rate of Return in Property-Liability Insurance
| Author | : J. David Cummins |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 164 |
| Release | : 2013-03-09 |
| Genre | : Business & Economics |
| ISBN | : 9401577536 |
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.
Deregulating Property-Liability Insurance
| Author | : J. David Cummins |
| Publisher | : Rowman & Littlefield |
| Total Pages | : 421 |
| Release | : 2004-06-23 |
| Genre | : Business & Economics |
| ISBN | : 0815798415 |
Over the past two decades, the United States has successfully deregulated prices and restrictions on most previously-regulated industries, including airlines, trucking, railroads, telecommunications, and banking. Only a few industries remain regulated, the largest being the property-liability insurance business. In light of recent sweeping financial modernization legislation in other sectors of the insurance industry, this timely volume examines the basis for continued regulation of rates and forms of the U.S. property-liability insurance market. The book focuses on private passenger automobile insurance—the most important personal line of property-liability coverage, with annual premiums of about $120 billion. The authors analyze five state case studies: California, Massachusetts, and New Jersey—three of the most heavily regulated states—as well as Illinois, which has been deregulated for about 30 years, and South Carolina, which began to deregulate in 1997. The study also includes an econometric analysis based on all fifty states over a 25-year period that gauges the impact of regulation on insurance price levels, price volatility, and the proportion of automobiles insured in residual markets. The authors conclude that regulation does not significantly reduce long-run prices for consumers, and generally limits availability of coverage, reduces the quality and variety of services available in the market, inhibits productivity growth, and increases price volatility. Contributors include Dwight Jaffee (University of California, Berkeley), Thomas Russell (Santa Clara University ), Laureen Regan (Temple University), Sharon Tennyson (Cornell University), Mary Weiss (Temple University), John Worrall (Rutgers University), Stephen D'Arcy (University of Illinois, Urbana-Champaign), Martin Grace (Georgia State University), Robert Klein (Georgia State University), Richard Phillips (Georgia State University), Georges Dionne (University of Montreal), and Richard Butler (Brigham Young University).
The Political Economy of Regulation
| Author | : Kenneth J. Meier |
| Publisher | : SUNY Press |
| Total Pages | : 252 |
| Release | : 1988-01-01 |
| Genre | : Political Science |
| ISBN | : 9780887067310 |
This is the first comprehensive study of the history, politics, and economics of the insurance industry in the United States. It is designed as a theoretical challenge to the conventional wisdom in political economy which says that regulation benefits the regulated. In fact, Meier shows that because the insurance industry is far too divided to impose its will on the regulatory system, the political economy of regulation is actually the product of a complex interaction of industry interests, consumer groups, insurance regulations, and political elites. Using both historical and quantitative approaches, the author examines a variety of insurance issues including the development of insurance regulation; the impact of regulation on the availability and price of insurance; the stringency of state regulation; and the product liability insurance crisis of 1985-86. The book concludes with a series of recommendations for reforming the regulation of insurance.
