The rising cost and diminishing availability of homeowners insurance have become a hot topic in many parts of the country. A number of factors have been blamed for causing the adverse price and availability trends, with insurers and consumer groups offering differing opinions on the causes. Questions also have been raised about insurers' underwriting practices, including the use of a homeowner's credit record and claims history in considering applications for coverage. This paper examines and attempts to explain recent developments in homeowners insurance. We analyze several sources of information on the price and availability of coverage, as well as factor affecting these key market outcomes. Our analysis confirms that the price of coverage has increased significantly in some states and there is evidence that the availability of coverage has also tightened. The data further suggest that rising claim costs and operating losses are the principal factors behind these developments. There is no support for the contention that imprudent investments or "price-gouging" are responsible for higher rates and diminished availability. We conclude that policies that help to control claim costs and encourage market entry, not increased regulation, offer the most promise in improving market conditions for consumers.
{"title":"Homeowners Insurance: Market Trends, Issues and Problems","authors":"Martin Grace, R. Klein","doi":"10.2139/ssrn.816927","DOIUrl":"https://doi.org/10.2139/ssrn.816927","url":null,"abstract":"The rising cost and diminishing availability of homeowners insurance have become a hot topic in many parts of the country. A number of factors have been blamed for causing the adverse price and availability trends, with insurers and consumer groups offering differing opinions on the causes. Questions also have been raised about insurers' underwriting practices, including the use of a homeowner's credit record and claims history in considering applications for coverage. This paper examines and attempts to explain recent developments in homeowners insurance. We analyze several sources of information on the price and availability of coverage, as well as factor affecting these key market outcomes. Our analysis confirms that the price of coverage has increased significantly in some states and there is evidence that the availability of coverage has also tightened. The data further suggest that rising claim costs and operating losses are the principal factors behind these developments. There is no support for the contention that imprudent investments or \"price-gouging\" are responsible for higher rates and diminished availability. We conclude that policies that help to control claim costs and encourage market entry, not increased regulation, offer the most promise in improving market conditions for consumers.","PeriodicalId":29865,"journal":{"name":"Connecticut Insurance Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2003-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87156098","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2003-01-01DOI: 10.1097/01974520-200304000-00005
M. Rodwin
If we adopt a full consumer model for our healthcare system, we will incorporate not only the positive elements of consumerism but some negative ones as well. These negative aspects are often overlooked. This essay examines the negative side. In brief, health care consumers are only entitled to what they can pay for so those with no money get nothing and those with little money receive little; the market may respond to consumers by lowering quality while lowering price.
{"title":"The Dark Side of a Consumer-Driven Health System","authors":"M. Rodwin","doi":"10.1097/01974520-200304000-00005","DOIUrl":"https://doi.org/10.1097/01974520-200304000-00005","url":null,"abstract":"If we adopt a full consumer model for our healthcare system, we will incorporate not only the positive elements of consumerism but some negative ones as well. These negative aspects are often overlooked. This essay examines the negative side. In brief, health care consumers are only entitled to what they can pay for so those with no money get nothing and those with little money receive little; the market may respond to consumers by lowering quality while lowering price.","PeriodicalId":29865,"journal":{"name":"Connecticut Insurance Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2003-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74573379","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Suitability has long been in the spotlight and on the radar screens of state and federal regulators. State and federal suitability standards governing fixed and variable life insurance and annuities are complex and comprehensive, especially when state replacement regulations and needs-based selling standards are factored in. This document highlights the principal state and federal suitability rules, and discusses recent regulatory applications of them.
{"title":"Covering All the Bases: An Integrated Approach to Suitability","authors":"Carl B. Wilkerson","doi":"10.2139/SSRN.2367443","DOIUrl":"https://doi.org/10.2139/SSRN.2367443","url":null,"abstract":"Suitability has long been in the spotlight and on the radar screens of state and federal regulators. State and federal suitability standards governing fixed and variable life insurance and annuities are complex and comprehensive, especially when state replacement regulations and needs-based selling standards are factored in. This document highlights the principal state and federal suitability rules, and discusses recent regulatory applications of them.","PeriodicalId":29865,"journal":{"name":"Connecticut Insurance Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2002-05-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86439820","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper explores the value of purchasing joint life annuities for married couples. It describes the existing market for joint life annuities, and summarizes the range of annuity products that are currently available to couples. It then considers the value that married couples would place on access to an actuarially fair annuity market, and defines a measure of willingness-to-pay for annuities. This calculation differs from the analogous one for a single individual for two reasons. First, joint-and-survivor life tables differ from individual life tables. The life expectancy of the second-to-die in a married couple is substantially greater than that for a single individual. Second, joint life annuities provide time-varying payouts, because survivor benefit options permit the payout when both members of a couple are alive to differ from that when one member has died. The paper develops a new annuity valuation model and applies it to evaluate a married couple's utility gain from annuitization. The findings suggest that previous estimates of the utility gain from annuitization, which applied to individuals, overstate the benefits of annuitization for married couples. Since most potential annuity buyers are married, these findings may help to explain the limited size of the private market for single premium annuities.
{"title":"Joint Life Annuities and Annuity Demand by Married Couples","authors":"Jeffrey R. Brown, J. Poterba","doi":"10.2307/253849","DOIUrl":"https://doi.org/10.2307/253849","url":null,"abstract":"This paper explores the value of purchasing joint life annuities for married couples. It describes the existing market for joint life annuities, and summarizes the range of annuity products that are currently available to couples. It then considers the value that married couples would place on access to an actuarially fair annuity market, and defines a measure of willingness-to-pay for annuities. This calculation differs from the analogous one for a single individual for two reasons. First, joint-and-survivor life tables differ from individual life tables. The life expectancy of the second-to-die in a married couple is substantially greater than that for a single individual. Second, joint life annuities provide time-varying payouts, because survivor benefit options permit the payout when both members of a couple are alive to differ from that when one member has died. The paper develops a new annuity valuation model and applies it to evaluate a married couple's utility gain from annuitization. The findings suggest that previous estimates of the utility gain from annuitization, which applied to individuals, overstate the benefits of annuitization for married couples. Since most potential annuity buyers are married, these findings may help to explain the limited size of the private market for single premium annuities.","PeriodicalId":29865,"journal":{"name":"Connecticut Insurance Law Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"1999-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89833020","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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