Description: 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.
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Return shipping will be paid by: Buyer
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EAN: 9780691129358
UPC: 9780691129358
ISBN: 9780691129358
MPN: N/A
Book Title: When Insurers Go Bust: An Economic Analysis of the
Number of Pages: 112 Pages
Language: English
Publication Name: When Insurers Go Bust : an Economic Analysis of the Role and Design of Prudential Regulation
Publisher: Princeton University Press
Item Height: 0.7 in
Publication Year: 2007
Subject: Economics / General, Insurance / Risk Assessment & Management, Insurance / General
Type: Textbook
Item Weight: 9 Oz
Subject Area: Business & Economics
Author: Guillaume Plantin, Jean-Charles Rochet
Item Length: 8.8 in
Item Width: 5.8 in
Format: Hardcover
