When Insurers Go Bust

An Economic Analysis of the Role and Design of Prudential Regulation

Guillaume Plantin, Jean-Charles Rochet

102 pages, parution le 30/03/2007

Ajouter à une liste

Indisponible

Résumé

In the 1990s, large insurance companies failed in virtually every major market, prompting a fierce and ongoing debate about how to better protect policyholders. Drawing lessons from the failures of four insurance companies, When Insurers Go Bust dramatically advances this debate by arguing that the current approach to insurance regulation should be replaced with mechanisms that replicate the governance of non-financial firms.

Rather than immediately addressing the minutiae of supervision, Guillaume Plantin and Jean-Charles Rochet first identify a fundamental economic rationale for supervising the solvency of insurance companies: policyholders are the "bankers" of insurance companies. But because policyholders are too dispersed to effectively monitor insurers, it might be efficient to delegate monitoring to an institution--a prudential authority. Applying recent developments in corporate finance theory and the economic theory of organizations, the authors describe in practical terms how such authorities could be created and given the incentives to behave exactly like bankers behave toward borrowers, as "tough" claimholders.

L'auteur - Guillaume Plantin

Guillaume Plantin est diplômé de l'École Polytechnique et de l'ENSAE, docteur en sciences économiques (université de Toulouse), et membre associé de l'Institut des Actuaires. Il est actuellement professeur assistant de Finance à la David A. Tepper School of Business de l'université Carnegie Mellon (Pittsburgh).

Autres livres de Guillaume Plantin

Le monde d'aujourd'hui

Théorie du risque et réassurance

Découvrir tous les livres de Guillaume Plantin

L'auteur - Jean-Charles Rochet

Autres livres de Jean-Charles Rochet

Méthodes mathématiques de la finance

Microéconomie de l'assurance

Découvrir tous les livres de Jean-Charles Rochet

Sommaire

Introduction
Four Recent Cases of Financially Distressed Insurers
- Independent Insurance Company Limited
- Groupe des Assurances Nationales
- Equitable Life
- Europavie
- Why Are Insurers Subject to Prudential Regulation? A First Pass
The State of the Art in Prudential Regulation
- The Main Features of Prudential Systems
- Regulation and Ruin Theory: Controlling the Probability of Failure
- Conclusions
Inversion of the Production Cycle and Capital Structure of Insurance Companies
- Inversion of the Production Cycle in the Insurance Industry
- An Analogy between Insurance Capital and Deductibles in Insurance Contracts
- The Role of Deductibles in Insurance Contracts
- The Role of Insurance Capital to Mitigate Informational Problems
- Conclusion: The Inversion of the Production Cycle Creates Agency Problems That Can Be Mitigated by Capital Requirements for Insurance Companies
- Appendix: Capital Requirements as an Incentive Device
Absence of a Tough Claimholder in the Financial Structure of Insurance Companies and Incomplete Contracts
- Absence of a Tough Claimholder
- Prudential Regulation and Incomplete Contracts
- The "Representation Hypothesis"
How to Organize the Regulation of Insurance Companies
- Simple Prudential Ratios
- "Double Trigger"
- An Independent but Accountable Prudential Authority
- Granting Control Rights to the Industry via a Guarantee Fund
- A Single Accounting Standard
- Limiting the Scope of Prudential Regulation
- What if This Is Not Enough?
The Role of Reinsurance
- Organization of the Reinsurance Market
- Reinsurance and Prudential Supervision
How Does Insurance Regulation Fit within Other Financial Regulations?
- Insurance and Financial Conglomerates
- The Regulation of Banks and of Insurance Companies Are Two Different Jobs
- Insurance and Systemic Risk
Conclusion: Prudential Regulation as a Substitute for Corporate Governance

Voir tout

Replier

Caractéristiques techniques

	PAPIER
Éditeur(s)	Princeton University Press
Auteur(s)	Guillaume Plantin, Jean-Charles Rochet
Parution	30/03/2007
Nb. de pages	102
Format	14,5 x 22,5
Couverture	Relié
Poids	270g
Intérieur	Noir et Blanc
EAN13	9780691129358
ISBN13	978-0-691-12935-8