The liability crisis: a law and economics analysis
The structure and regulation of insurance markets in Europe
The capitalization and portfolio risk of insurance companies
The strategies of financial intermediaries in the United States presumed a stability of interest rates that began to break down in the late 1960s. Not only did rising interest rates during the past two decades tend to depress the value of the assets of all intermediaries, they also fostered competition among intermediaries as all sought new opportunities for profit. In order to cope, many financial institutions assumed new bets by "reaching" for riskier assets offering higher yields or by operating with less capital per dollar of assets. To varying degrees, many insurance companies have ...
The financial condition and regulation of insurance companies: an overview
In October 1990 questions were raised about real estate problems in the life insurance industry after the ninth largest life company sustained a major loss as a consequence of a write-down of real-estate-related assets. The value of insurance company stocks declined as the financial community began to take a hard look at the recent changes that had taken place. During the spring of 1991 the press increasingly focused on the industry, once it became evident that the life subsidiaries of First Executive and First Capital were impaired as a consequence of substantial investments in junk bonds. ; ...
Risk and the capital of insurance companies
Insurance companies, like other financial institutions, have been evolving from specialized businesses to enterprises offering a variety of financial services. Rising interest rates impelled this evolution during much of the past three decades as most insurers tried to remain competitive. However, as insurers' profit margins subsided and they attracted new business, their assets generally grew more rapidly than their capital. To maintain the safety and soundness of insurance companies, regulators increasingly are adopting risk-based capital requirements instead of rules that limit insurers' ...
Financial innovation and standards for the capital of insurance companies
Since their inception, insurance companies, banks, and other financial institutions have played prominent roles in our capital markets. These intermediaries have fostered saving and investment by issuing liabilities that appeal to savers in order to purchase the obligations of investors on attractive terms. Among financial intermediaries, life insurance companies traditionally have distinguished themselves by attracting long-term savings and by providing long-term financing for investment in real estate and durable equipment by businesses.> This article reviews the distinctive features of ...
A measured approach to tort reform
The cycle in property/casualty insurance