Advantageous Effects of Regulatory Adverse Selection in the Life Insurance Market

Dados 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)
Ano2006
Volume116
Fascículo508
Páginas327-354
Data de publicação2006-01-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2006.01059.x
OpenAlexW2060806036
IdiomaEN
Citações recebidas1
Referências 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