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LIFE INSURANCE: REGULATION AS CONTRACT ENFORCEMENT 1
Author(s) -
Morrison Alan D.
Publication year - 2004
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/j.1468-0270.2004.00515.x
Subject(s) - monopoly , business , insurance policy , regulator , insurance law , actuarial science , key person insurance , economics , law and economics , general insurance , market economy , biochemistry , chemistry , gene
Debating the minutiae of insurance regulation without a clear understanding of why insurance companies are regulated is futile. In this article I discuss the economic rationale for insurance business regulation and conclude that the appropriate role of the regulator is to enforce contracts which might otherwise be broken. I argue that if this is the case, regulation should be optional, and that it need not be a monopoly activity.