Advantageous Effects of Regulatory Adverse Selection in the Life Insurance Market

Datos Bibliográficos

ID9706069
AutoresMattias Polborn (0000-0001-7775-1716, University of Illinois System), Mattias K Polborn (University of Illinois Urbana-Champaign), Michael Hoy (0009-0003-0718-8827, University of Guelph), Asha Sadanand (University of Guelph)
Año2006
Volumen116
Número508
Páginas327-354
Fecha de publicación2006-01-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2006.01059.x
OpenAlexW2060806036
IdiomaEN
Citas recibidas1
Referencias citadas29

We analyse the effects of regulations prohibiting the use of information to risk-rate premiums in a life insurance market. New information derived from genetic tests is likely to become increasingly relevant in the future. Many governments prohibit the use of this information, thereby generating 'regulatory adverse selection'. In our model, individuals early in their lives know neither their desired level of life insurance later in life nor their mortality risk, but learn both over time. We obtain both positive and normative results that differ qualitatively from those in standard, static models. Legislation prohibiting the use of genetic tests for ratemaking may increase welfare. Copyright 2006 Royal Economic Society

Actuarial science · Adverse selection · Asha · Economic history · Economics · Library science · Political science · Selection (genetic algorithm · Theology · Computer Science · History · Insurance and Financial Risk Management · Law, Economics, and Judicial Systems · Medicine · Philosophy