Reinsurance is a form of insurance for insurance companiesóa way of spreading the risk more widely. Until recently, reinsurance was a topic familiar only to those in the insurance industry directly involved in reinsurance transactions. Today, however, reinsurance is a subject of particular concern to those responsible for regulating the industry and of increasing interest to the financial community as a whole. To meet this growing interest, the Insurance Information Institute asked a number of reinsurance experts (...) to write articles on the technical aspects of reinsurance for readers unfamiliar with the business. These essays, as a group, describe in simple terms what reinsurance is, how the industry functions, and provide a broad overview of the new challenges facing the industry today. (shrink)

Insurers draw on sophisticated models for the probability distributions over losses associated with catastrophic events that are required to price insurance policies. But prevailing pricing methods don’t factor in the ambiguity around model-based projections that derive from the relative paucity of data about extreme events. I argue however that most current theories of decision making under ambiguity only partially support a solution to the challenge that insurance decision makers face and propose an alternative approach that allows for decision (...) making that is responsive to both the evidential situation of the insurance decision maker and their attitude to ambiguity. (shrink)

What level and kind of protection against relative misfortune should our community provide, and how should it distribute the costs of provision amongst its members? According to the answer this chapter explores, the willingness of fairly situated individuals to pay for protection against the risk of misfortune plays an essential, though limited, role in answering these questions. The authors call this approach _fair insurance_. The chapter’s aim is to identify the appeal of this position compared to its rivals and to (...) outline an amended variant of the most familiar version of the view. It then explains how that variant survives several influential objections that some have thought decisive. It concludes by showing that the fair insurance approach can contribute to recent debates about how best to develop a contractualist account of distributive decision-making in the face of risk. (shrink)

The paper takes a look at insurance customer dishonesty as a special case of consumer ethics, understood as a way of situation handling, as a moral choice between right and wrong, such as between self-interest vs. common-interest, in other words, a “moral temptation”. After briefly raising the question if different schools, of moral philosophy would conceptualize such moral temptations differently, the paper presents ‘moral psychology’ as a frame of reference, with a focus on cognitive moral development, moral attitude and (...) moral neutralization. Conceptualization questions can’t be answered finally without thinking at the same time of empirical research design and instrument design decisions, e.g. choosing between experiment vs. questionnaire studies, designing suitable moral temptation situations as an experiment vs. questionnaires with scenario vignettes. The paper discusses then experiences from a 2004 pilot survey, with a main focus on a few insurance dishonesty scenarios with follow-up questions. The paper has an open end, i.e. outlines desirable future theoretical, empirical and practical work with insurance customer dishonesty. (shrink)

Public insurance is commonly assimilated with redistributive tools mobilized by the welfare state in the pursuit of an egalitarian ideal. This view contains some truth, since the result of insurance, at a given moment, is the redistribution of resources from the lucky to unlucky. However, Joseph Heath considers that the principle of efficiency provides a better normative explanation and justification of public insurance than the egalitarian account. According to this view, the fact that the state is involved (...) in the provision of specific insurance is explained and justified by the greater efficiency of the state, in comparison with markets, in addressing market failures such as moral hazard or adverse selection. Our argument is that while insurance, intrinsically and idealistically, may diverge from a redistributive scheme, it is nevertheless difficult to deny that insurance has nothing to do with equality. More precisely, we argue that insurance may be understood as an egalitarian tool if our understanding of equality is broadened to include relational equality. Our paper aims to briefly recap the debates surrounding public insurance as a redistributive tool, advancing the idea that public insurance may be a relational egalitarian tool. It then presents a number of relational arguments in favor of the involvement of the state in the provision of specific forms of insurance, arguments that have been overlooked given the domination of luck egalitarian approaches in these debates. (shrink)

Catastrophe insurance differs from regular insurance in that individual claims are correlated and insurers have to pay more clients at once, which creates a liquidity strain. In this paper, I show two related findings: first, that when customers know their claims are correlated, this correlation can cause positive-sloping demand at low prices, and second, that because of this, a catastrophe insurance market can fail. Market failure is a stable equilibrium, which provides a better understanding of the frequent (...) failures in catastrophe insurance markets. (shrink)

This paper copes with a real-world classification problem related to the management of claims received in an insurance company. The way to obtain the classifier is not easy due to the high amount of missing values as well as the inherent imbalanced scenario within class labels. Once the data partition has been done, the training set is submitted to an intensive double grid search in order to obtain the most promising type of missing value imputation approach and then a (...) step ahead is done using the best method and it starts the next round of data mining strategies which now falls into data rebalancing umbrella. Again, a grid search from an undersampling and oversampling family with different settings is done taking into account only seen data. The training data obtained after the first grid search are now submitted to the second step according the second grid search in order to get the ready training set for the further classifier training. The main objective of the work is to find the best combination of data mining techniques that suits the data set with a pipeline containing two types of data preparation methods coming from different families. As an outcome, first the problem of the presence of missing values has been addressed and then the data rebalancing techniques has been applied. The study focuses on obtaining classifiers based on Bayesian and lazy approaches as well as decision trees, evaluated on metrics such as the area under the ROC curve (AUC), Cohen’s kappa, Accuracy and the F-measure, among others. The imputation by the mean the mode is preferable to the Expectation Maximization Imputation in the scenario faced in this paper taking into account that the amount of missing values is higher than a forty percent for many features. (shrink)

Purpose: The purpose of the study is to present the specificity of the social insurance system in Poland in the transition period, i.e., in the period of transition from the market to socialism. (Methodology) The aim of the study is achieved by using the method of analysis of literature on the subject, the method of analysis of normative acts, and the method of description, which is supplemented by comparative analysis. Results: The conducted analysis clearly shows that the issues of (...) the social insurance system were at the center of interest during the transition period. It should be indicated that in the period under study, in Poland, reference was made to the theoretical and pragmatic solutions of the interwar period. Contribution to the discipline: The conducted analysis may become part of a larger research program showing the specificity of the Polish social insurance system in the system of command and distribution economy, which has not yet been broadly analyzed in the economic literature. (shrink)

Insurers draw on sophisticated models for the probability distributions over losses associated with catastrophic events that are required to price insurance policies. But prevailing pricing methods don’t factor in the ambiguity around model-based projections that derive from the relative paucity of data about extreme events. I argue however that most current theories of decision making under ambiguity only partially support a solution to the challenge that insurance decision makers face and propose an alternative approach that allows for decision (...) making that is responsive to both the evidential situation of the insurance decision maker and their attitude to ambiguity. (shrink)

It is often thought that compulsory retirement funding gains support from paternalistic considerations. This paper examines this claim. I argue that compulsory retirement funding is more coherent when understood as an attempt at temporal smoothing than counterfactual insurance. An implication is that any paternalistic case for retirement funding faces problems that are more severe than they would be if compulsory retirement funding were insurance. I label these the problems of ‘inverted bias’ and of the ‘arbitrariness of income from (...) labour’. The paper then makes some suggestions about how these points about paternalism bear on the problem of justice in retirement funding. (shrink)

Environmental politics needs more than piecemeal institutional efforts and more than calls for a set of 'new' values. It needs a realistic, comprehensive, and effective policy programme. Such a programme can be derived from a conjunction of Hardin's work on the 'tragedy of the commons' and Beck's analysis of the 'risk society', and involves exploiting the possibilities for the internalisation of risk provided by the insurance and reinsurance industries. Such exploitation requires tailored changes to the politico-legal environment, enforcing strict (...) liability for the production of risk, permitting any and all agents adversely effected by such negative externalities to initiate action for damages. The aim is not to clog up social and economic life with endless legal disputation, but through such a threat to ensure that environmentally significant investment and productive strategies are actively constrained by actuarially calculated strategies for risk internalisation. (shrink)

The puzzling coincidence of gambling and insurance has often been analysed by taking recourse to utility functions with convex and concave regions. In this paper we show that it may be optimal for utility maximizing risk seekers to engage in insurance and gambling activities simultaneously. A possible reason for this behavior is that these individuals try to take advantage of a moral hazard situation.

Spanish legislation on insurance and reinsurance mediation stipulates that intermediary can only receive commissions and fees for the management of their policies and prohibits any other form of remuneration. However, it is possible that financial intermediaries who manage larger risks wait until the end of the legal deadline to settle with insurance companies. This common practice in the insurance market hides additional remuneration in defiance of the law. It also means that the risk is not covered within (...) the prescribed period and would, involve a commercial payment to the client, and, on the other hand, affect sustainable claims management. (shrink)

In his final years, Josiah Royce worked to develop his theories of community and interpretation in practical directions. In particular, he developed an account of insurance as a special community of interpretation, and proposed the creation of an international board of insurance as a deterrent for war. Rather than evaluating Royce’s policy recommendations, this paper explores how his conception of insurance clarifies his account of interpretation. For Royce, insurance provides the best model for communal interpretation thus (...) far because an insurer seeks to prevent loss in the face of risky action, in addition to adjudicating between competing claims. This paper concludes with some reflections on how the problem of moral hazard can inform a Roycean conception of philosophy. (shrink)

Microinsurance is the provision of insurance services to the poor, usually in developing countries. One of the key criteria of poverty is vulnerability even to minor events. In such cases, even micro coverage can make a major difference, yet still be funded by an affordable contribution by the insured. Like any kind of insurance, microinsurance can cover different risks to life, health, farming, property among other things. Our paper sketches how one could address and develop microinsurance business ethics. (...) First, we introduce microinsurance to the business ethics community and business ethics to the microinsurance community. Our draft of microinsurance ethics is then developed from two angles: as a holistic understanding of ideals and possible ethical conflicts in key stakeholder relationships and by distinguishing eight challenges when targeting the poor and when marketing microinsurance. As an open ending, the article suggests a three-stage action research design focusing on how microinsurance could (and should) internalize ethics, respecting rather than neglecting national- and local-cultural conditions. (shrink)

The aim of this article is to refute Ronald Dworkin's claim that the provision of an equal opportunity to insure against risks is sufficient to render differences in people's circumstances that are the result of luck consistent with his theory of equality of resources. Section I addresses bad luck in the circumstances of individuals in the form of mental or physical incapacitation resulting from the vicissitudes of nature. Section II addresses bad luck which is the result of the choices of (...) other individuals to give or bequeath. (shrink)

The study of community is an integral part of pragmatist thought, as is the continual reminder to reconstruct and re-evaluate our theories in light of changing conditions. A contemporary, literal, and significant source of changing conditions is anthropogenic global climate change, conjoined with a general increase in concern for non-human life. Already, a great deal of work has been done on applying pragmatist conceptions and insights to these issues.1 However, other pragmatist resources remain to be marshaled. One such resource is (...) Josiah Royce’s philosophy of insurance, which, while primarily offered as a way of preventing international conflicts, also concerned the mitigation of natural calamities, such as.. (shrink)

Insurance fraud and abuse—international concerns—are inherent in the proposition of insurance and prevalent in insurer–insured interactions. While the subject of considerable industry and regulatory attention, this little-researched area of consumer behavior and consumer ethics represents persistent social policy questions and problems at multiple levels. This article addresses the issue by first defining insurance fraud and its origins in contract, as well as consumer- and insurer-management. The authors conclude by re-envisioning the problem as one of co-creation by the (...) consumer-insured and insurer personnel, proposing a framework for its study and resolution. (shrink)

This article examines how a just society must address the needs of its imprudent members. I defend compulsory insurance as an answer to this question. It has been assumed that compulsory insurance can only be justified on paternalistic grounds. I argue that this assumption is incorrect, and defend non-paternalistic compulsory insurance. To display the merits of NPCI, I identify a trilemma that arises for views about how to address the needs of the imprudent, including libertarian and so-called (...) ‘ luck -egalitarian’ views. I then suggest that NPCI enables us to escape the trilemma. (shrink)

Many countries have imposed strict regulations on the genetic information to which insurers have access. Commentators have warned against the emerging body of legislation for different reasons. This paper demonstrates that, when confronted with the argument that genetic information should be available to insurers for health insurance underwriting purposes, one should avoid appeals to rights of genetic privacy and genetic ignorance. The principle of equality of opportunity may nevertheless warrant restrictions. A choice-based account of this principle implies that it (...) is unfair to hold people responsible for the consequences of the genetic lottery, since we have no choice in selecting our genotype or the expression of it. However appealing, this view does not take us all the way to an adequate justification of inaccessibility of genetic information. A contractarian account, suggesting that health is a condition of opportunity and that healthcare is an essential good, seems more promising. I conclude that if or when predictive medical tests (such as genetic tests) are developed with significant actuarial value, individuals have less reason to accept as fair institutions that limit access to healthcare on the grounds of risk status. Given the assumption that a division of risk pools in accordance with a rough estimate of people's level of (genetic) risk will occur, fairness and justice favour universal health insurance based on solidarity. (shrink)

The background of this paper is the ongoing dismantling of the social insurance systems in favour of commercialisation and privatisation of insurances needed for illness, old age and premature death. This combined with the increased possibility of using genetic testing for differentiating personal insurance premiums has the potentiality of creating a ‘genetic proletariat’ — an uninsurable high-risk population. The common way of handling this problem in Sweden, and many other developed countries around the North Atlantic, has been to (...) regulate insurance companies’ right to ask for and use genetic information in various ways. There is a distinction between partial regulation (that allows insurance companies access to genetic information from genetic tests already made, sometimes only above a specified amount, but not to demand new tests) and total regulation (that forbids insurance companies to ask for or use any genetic information). I will argue that these forms of regulation probably will have adverse consequences given the dismantling of collective social insurance systems. If this is convincing, a better way to solve the problem of an uninsurable high-risk population (and other problems) is to resurrect the collective, obligatory insurance systems in which the individual risk profile does not constitute a basis for premium determination. Both arguments cast in terms of consequences and justice render support for this conclusion. (shrink)

Insurance claim fraud costs insurance companies, policymakers, and taxpayers billions of dollars every year and has been described as the second largest white collar crime. The most common insurance fraud activity and one that contributes a significant portion of dollar losses is the practice of padding claim amounts in the event of a loss. One of the largest issues insurance companies face is that policyholders often do not perceive insurance claim padding as an unethical behavior. (...) However, very little research has examined the factors that contribute to such perceptions. Considering how consumers often attempt to justify fraudulent behavior from a fairness perspective, the present work examines how the amount of the deductible in an insurance claim situation can influence feelings of fairness and ethicality. The results of an experimental study show that higher deductible amounts result in stronger perceptions that insurance claim padding is fair to the insurance company, weaker perceptions that the behavior is unethical, and higher proposed claim award amounts. The study also shows, however, that the deductible amount effects are attenuated for consumers who display higher ethical standards as reflected by their scores on the consumer ethics scale. Implications are discussed with respect to the insurance industry, deviant consumer behavior, and general business ethics theory. (shrink)

The insurance business models offer unparalleled benefits and challenges for insurers, policyholders, and stakeholders. With a paradigm shift from centralized structures, these models empower greater control and transparency, reducing intermediaries and enhancing claims processing efficiency. This chapter explores diverse decentralized insurance models, such as peer-to-peer insurance, parametric insurance, and mutual insurance, by presenting key components and resources that cater to specific customer segments with unique value propositions.This Chapter’s Learning GoalsExploring the disruptive potential and challenges associated (...) with decentralized insurance business models.Identifying the key components of various technologically diverse insurance models, including revenue streams, cost structures, and the role of key partners and resources.Discussing the ethical dilemma of insurers in policy underwriting and pricing. (shrink)

Public insurance is both everywhere and nowhere. It is everywhere in the sense that it is omnipresent in industrialised societies: public health insurance, unemployment benefits and pensions. It is a sizeable part of modern nations’ public budget . It has permeated our understanding of societal institutions to the extent that now access to public insurance coverage is understood as being a struggle for equality and equal citizenship .Public insurance is only one aspect of a broader phenomenon: (...) the transformation of modern societies into insurance societies, i.e. societies that are orientated toward risk-management . Nevertheless, public insurance is at the core of the welfare state as insurance system. Paul Krugman once said of the modern state that it is ‘an insurance company with an army’ while David Moss argues that government is the ultimate risk manager ( .. (shrink)

We examine the relationship between social insurance contributions and earnings management for publicly listed firms in China. Our empirical results show that the social insurance contributions burden significantly reduces the degree of earnings management by reducing the level of free cash flow. Additionally, the negative relation between social insurance contributions burden and earnings management is more pronounced when the internal and external social insurance pressures are high and when the firms are large non-state-owned enterprises. We also (...) discuss the heterogeneity among firms for different financing constraints, external financing environment, regional marketization, and internal and external corporate governance. Finally, we further find that under the dual collecting system, although the social security administration is a better collecting agency, the local tax bureau acting with full responsibility is more effective than the collecting system. (shrink)

Genetic testing raises concerns that individuals will be denied health insurance (and thus, effectively, access to health care), or that employers will screen to eliminate potentially costly workers. Although we as a society do not yet concur on the degree to which private businesses have a responsibility to promote social justice, several different policy alternatives might allow us to weigh the interests of insurers, as businesses, against the interests of citizens in a responsible manner.

Experts discuss the economic, legal, and social issues surrounding the use of genetic testing in determining eligibility for life insurance. Insurance companies routinely use an individual's medical history and family medical history in determining eligibility for life insurance; this is part of the process of medical underwriting. Insurers have also long used genetic information, often derived from family history, in underwriting. But rapid advances in gene identification and genetic testing are changing the way we look at genetic (...) information. Should the results of genetic testing (which might identify a predisposition toward disease not related to medical history) be available to life insurance medical underwriters? Few if any life insurers currently require genetic testing, but there are no laws or regulations prohibiting its use. Genetics and Life Insurance examines the complex economic, legal, and social issues surrounding the use of genetic information in life insurance underwriting. The contributors are legal scholars, representatives of the life insurance industry (including an actuary and an insurance physician), a geneticist, a genetic counselor, a philosopher, and a consumer advocate. They explore all aspects of an issue that has only recently drawn the attention of policymakers and the public. The book opens with a report on the results of a public opinion poll on genetics and life insurance. Succeeding chapters present the insurer perspective, a discussion of the economics of risk selection in life insurance, background information on the process of underwriting, a scientific analysis of genetic risks and mortality rates, a philosophical discussion of fairness and genetic underwriting, the viewpoints of consumers and genetics counselors, a comparison of different international policy approaches to the issue, and a legal analysis of antitrust implications when insurers collaborate in setting standards for medical underwriting. In the final chapter the editor addresses various policy options, examining the pros and cons of each one and assessing their political feasibility. (shrink)

Madison Kilbride recently argued that insurance ) should cover in vitro fertilisation with preimplantation genetic testing services for couples at high risk of having a child affected with a genetic condition. She argues that IVF-PGT meets CMS’s definition of ‘medically necessary care’, where such care includes ‘services or supplies needed to diagnose or treat an illness, injury, condition, disease or its symptoms’. Kilbride argues that IVF-PGT satisfies this definition in two ways: as a diagnostic tool and as a treatment. (...) Contradicting Kilbride, however, I argue that IVF-PGT provides neither diagnosis nor treatment under CMS’s definition. Thus, as long as we accept CMS’s definition of medically necessary care—which Kilbride does, explicitly—it follows that IVF-PGT does not count as medically necessary care. Still, there may be other reasons to conclude that IVF-Preimplantation genetic testing should be covered, and so, it would be a mistake to reject Kilbride’s conclusion altogether. The problem is simply that Kilbride’s argument—that the procedure should be covered because it is medically necessary per CMS’s definition—is not sound. I conclude by discussing a number of other genetic services that are not currently being covered despite the fact that they do seem to satisfy CMS’s definition of ‘medically necessary diagnosis or treatment’. These services, I argue, should be provided under CMS before we consider expanding coverage to include elective procedures such as IVF-PGT. (shrink)

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. (shrink)

Theorists of the welfare state increasingly recognize that social insurance programs are not well-justified by distributive egalitarianism—meaning concern for equality considered as a pattern in the distribution of some good. However, recent work by several relational egalitarian theorists suggests that these programs may be justified on relational egalitarian grounds. Relational egalitarians hold that the proper object of egalitarian concern is the way that citizens relate to one another. In this paper, I review the problems facing a distributive egalitarian justification (...) for social insurance before considering and rejecting three relational egalitarian justifications. I close by offering a justification for these programs grounded in efficiency, not equality. (shrink)

Most consumer morality studies focus on consumer immorality, i.e. different types and degrees of consumer dishonesty or deviance. This paper follows this tradition, by looking at insurance customer dishonesty. For looking at insurance customer dishonesty in a wider perspective, the paper drafts a sociology of insurance customer morality, including outlines of micro-level, meso-level and macro-level moral sociologies of insurance fraud, as well as a discussion of moral heterogeneity and a critical understanding of deviance. As a next (...) step a few empirical rsearch questions are formulated and illustrated with data from a Norwegian-German pilot study. (shrink)

What level of government subsidy of higher education is justified, in what form, and for what reasons? We answer these questions by applying the hypothetical insurance approach, originally developed by Ronald Dworkin in his work on distributive justice. On this approach, when asking how to fund and deliver public services in a particular domain, we should seek to model what would be the outcome of a hypothetical insurance market: we stipulate that participants lack knowledge about their specific resources (...) and risks, and ask what insurance contracts they would take out to secure different types of benefit and protection in the domain in question. The great benefit of the hypothetical insurance approach is that it allows us to take apparently intractable questions about interpersonal distribution and transform them into questions about intrapersonal distributions: that is, questions about how an individual would choose to distribute risks and resources across the various lives that they might end up living, in light of their individual ambitions and preferences. Applying this approach to higher education, we argue that the UK model of higher education funding in which the costs of an individual's higher education are shared between general taxation and the individual herself, with the latter element to be paid retrospectively through an income-contingent state-backed loan, is vindicated as just. In particular, we argue that it is more just than alternatives such as a graduate tax, full funding through general taxation, and full privatisation. (shrink)

While a number of jurisdictions internationally prohibit insuring companies to be able to use genetic information in their risk classification, a voluntary code of practice permits insurers the limited use of predictive genetic test results in the UK. Jonathan Pugh1 offers a pluralist justice-based argument in support of the UK practice. Pugh’s position is developed to avoid what he sees as flaws with the current debate on insurers’ access to genetic information, including an alleged reliance on idealised assumptions about the (...) predictive power of genetic test results, revisionary implications for the provision of insurance suggested in the debate and failings of commentators to engage adequately with a conception of justice that undergirds the status quo approach in the UK. Pugh suggests that a quasi-libertarian approach to justice is implicit within the terms of the present Code and should be phrased as a principle of equity. Further, he argues that basic egalitarian and non-comparative concerns should be captured in broad principles: equal access and need. This leaves him with three principles that should be balanced in order to guide protection insurance policy. When the argument is applied to review …. (shrink)

Regulation, product complexity, and insurers’ large balance sheets have traditionally hindered the integration of decentralized insurance within the industry. However, the landscape is evolving, allowing incumbents to embrace this new era. By acting swiftly and ethically, insurers can thrive in the decentralized age, reaping the benefits of this transformative shift.This Chapter’s Learning GoalsUnderstanding the transformative impact of decentralization on the insurance industry, including technology-based decentralized insurance solutions.Exploring real-world cases of decentralized insurance applications in the insurance (...) sector. (shrink)

Exploring the transformative landscape of insurance, this chapter illuminates the rise of decentralized platforms as industry disruptors. Utilizing innovative technologies such as blockchain, machine intelligence, and digital platforms, these platforms revolutionize insurance transactions for enhanced transparency and efficiency. Through vivid portrayals of industry pioneers, it showcases the profound influence of decentralization and technology on reshaping insurance landscapes. The chapter emphasizes the transformative role of advanced technologies in modernizing insurance practices by categorizing platforms by their handling of (...) on-chain and off-chain risks.This Chapter’s Learning Goals.This Chapter’s Learning GoalsExploring the role of cutting-edge technologies, including blockchain, machine intelligence, and digital platforms, in revolutionizing the conventional insurance landscape.Understand the categorization of decentralized insurance platforms based on their methods of managing risks, providing insights into the diverse approaches shaping modern insurance practices. (shrink)

This study examines the public's and physicians' willingness to support deception of insurance companies in order to obtain necessary healthcare services and how this support varies based on perceptions of physicians' time pressures. Based on surveys of 700 prospective jurors and 1617 physicians, the public was more than twice as likely as physicians to sanction deception (26% versus 11%) and half as likely to believe that physicians have adequate time to appeal coverage decisions (22% versus 59%). The odds of (...) public support for deception compared to that of physicians rose from 2.48 to 4.64 after controlling for differences in time perception. These findings highlight the ethical challenge facing physicians and patients in balancing patient advocacy with honesty in the setting of limited societal resources. (shrink)

This article examines some of the reasons why banks and insurance companies have been accused of discrimination, and shows that this is by and large a false accusation. Economic analysis demonstrates that racial discrimination is not a profit‐maximizing strategy. Actually, unwise public policies are actually precluding many consumers from the market.

Les professeurs Macey et Miller analysent la relation entre l’assurance des dépôts et l’ inadé quation dans la structure des échéances des actifs et passifs des banques commerciales. Après avoir critiqué l’hypothèse traditionnelle concernant la réglementation, d’après laquelle les banques sont incitées à financer les actifs à long terme par des passifs à court terme parce que l’assurance des dépôts garantie par l’Etat stimule le crédit des banques et subventionne les passifs à court terme, ils utilisent l’analyse économique des décisions (...) publiques pour soutenir qu’une version modifiée de l’hypothèse de la réglementation est la meilleure explication de la déstructuration des échéances des actifs et passifs bancaires.Finalement, ils considèrent que soutenir l’hypothèse de la réglementation n’entraîne pas l’ acceptation du modèle d’assurance des dépôts garantie par l’Etat tel qu’il existe aux Etats-Unis aujourd’hui.Professors Macey and Miller explore the relationship between deposit insurance and the mismatch in the term structure of commercial banks’ assets and liabilities. After criticizing the traditional regulatory hypothesis, which posits that banks have incentives to fund long-term assets with short-term liabilities because government-sponsored deposit insurance enhances bank credit and subsidizes short-term liabilities, they use public choice theory to argue that a modified version of the regulatory hypothesis is the best explanation for the mismatch in the term structure of banks’ assets and liabilities. Finally, they argue that embracing the regulatory hypothesis does not imply acceptance of the government-sponsored deposit insurance scheme as it exists in the U.S. today. (shrink)

Currently there is an inequity in transfer rates of uninsured patients versus their insured counterparts. While this may vary by hospital system, studies indicate that this is a national trend, especially in emergency situations, and represents a prioritisation of profits over ethical obligations. This creates a variety of ethical issues for patients and society that generates a concordance between deontological and utilitarian viewpoints, two generally opposed schools of thought. The prioritisation of profit maximisation in order to provide better care for (...) a select population is insufficient to justify deleterious health outcomes, stress and financial burden on patients. Current policy regarding patient transfers in the emergency department is insufficient to protect the uninsured and must be reevaluated. (shrink)

Prior studies have extensively explored factors that drive misselling behavior in life insurance markets, but considered little the influences of attributes of clients (particularly vulnerable clients) on unethical sales. Our study that is based on the neoclassical theory of the firm aims to investigate the relationships between attributes of life insurance clients and unethical selling behavior of salespeople. Applying logit and probit models to a sample of 35,075 observations from a Chinese life insurance company, our study finds (...) that salespeople are more likely to perform unethical selling to ill-educated clients. Further, when salespeople’s sex and education are considered, the result shows that male or poorly-educated salespeople are more likely to make unethical selling. These findings enrich the literature of misselling of life insurance and offer some practical implications for both insurers and regulators to manage life insurance markets and control misselling behaviors. (shrink)

Reviews issues in the ethics of access to health insurance based on health problems due to genetic inheritance.

This paper examines the role that population vulnerabilities play in insurance coverage for a representative sample of Latinos and Asians in the United States. Using data from the National Latino and Asian American Study (NLAAS), these analyses compare coverage differences among and within ethnic subgroups, across states and regions, among types of occupations, and among those with or without English language proficiency. Extensive differences exist in coverage between Latinos and Asians, with Latinos more likely to be uninsured. Potential explanations (...) include the type of occupations available to Latinos and Asians, reforms in immigration laws, length of time in the United States, and regional differences in safety-net coverage. Policy implications are discussed. (shrink)

Beginning with the seminal work by Williams and Nagel, moral philosophers have used auto accident hypotheticals to illustrate the phenomenon of moral luck. Moral luck is present in the hypotheticals because (and to the extent that) two equally careless drivers are assessed differently because only one of them caused an accident. This Article considers whether these philosophical discussions might contribute to the public policy debate over compensation for auto accidents. Using liability and insurance practices in the United States as (...) an illustrative example, the Article explains that auto liability insurance substantially mitigates moral luck and argues that, as a result, the moral luck literature is unlikely to make a significant contribution to this public policy debate. The debate would benefit more from philosophical analysis of victims’ luck, which is not as substantially mitigated by liability insurance. (shrink)

The overriding goal of health reform is to provide every American affordable access to adequate health care. Yet in every national effort to date, the focal means to this end has always been health insurance. Massachusetts is congratulated for having achieved nearly universal insurance coverage, and congressional Democrats are aiming for the same. But what if they don't succeed? Even in Massachusetts, 167,000 residents remain uninsured. Is it still possible to provide adequate access to medical care for those (...) without insurance? If so, shouldn't we reframe social goals to achieve universal access through any means possible, whether or not insurance is involved? (shrink)

This “Legal Solutions in Health Reform” paper identifies and analyzes the legal issues raised by health insurance exchanges. Like all Legal Solutions papers, it does not purport to provide a concrete proposal as to how health insurance exchanges should be organized or even whether they should play a role in health care reform. Rather, it attempts simply to describe the legal issues that health insurance exchanges raise, and to propose alternative solutions to legal problems where useful. More (...) specifically, it analyzes and offers alternative solutions to the legal problems raised by proposals to establish insurance exchanges by the federal government, by state governments, and by private entities or associations. Because the focus of this project and paper is on legal issues, discussion of policy and design issues is attenuated. Nevertheless, some attention to policy issues is unavoidable because law is the realization of policy. (shrink)

Actuarial underwriting, or discrimination based on an individual's health status, is a business feature of the voluntary private insurance market. The term “discrimination” in this paper is not intended to convey the concept of unfair treatment, but rather how the insurance industry differentiates among individuals in designing and administering health insurance and employee health benefit products. Discrimination can occur at the point of enrollment, coverage design, or decisions regarding scope of coverage. Several major federal laws aimed at (...) regulating insurance discrimination based on health status focus at the point of enrollment. However, because of multiple exceptions and loopholes, these laws offer relatively limited protections. This paper provides a brief overview of discrimination practices, the federal law, and federal reform options to manage discriminatory practices in the insurance and employee health benefit markets. (shrink)

As the main sales force of life insurance companies, salespeople have accounted for more than 50% of life insurance sales channels over the years, playing a pivotal role in the development of the industry. Since the adoption of the model of employment at an agency, the commission income of life insurance salespeople has largely relied on their sales volume, which requires employee proactivity under a great number of stressors. However, because previous studies have analyzed stressors in a (...) single dimension, our understanding of the relationship between work stressors and proactive behaviors remains limited. Applying self-determination theory, we investigated differential relationships between challenge/hindrance stressors and proactive behaviors, which were expected to be mediated by passion and moderated by servant leadership. In the sample of 332 insurance salespeople, there was a positive relationship between challenge stressors and proactive behaviors. In addition, passion mediated the relationship between stressors and proactive behaviors, and servant leadership moderated the relationship between stressors and passion. Theoretical and practical implications are discussed. (shrink)

The deposit insurance makes the value of deposits independent from the behavior of other depositors or from the value of bank assets. Its existence induces a moral hazard which might threaten the stability of the banking system. The efficiency of the DI depends on the control of moral hazard, which means the agents’ responsibilisation, depositors included. There is a conflict between the DI principles and the present propositions improving this mechanism.The possible solutions in order to solve this paradox are (...) the restriction of the insurance coverage only for the demand deposits and the implementation of the double liability for the bank shareholders.The demand deposits insurance eliminates the incentive to bank runs caused by the fear of lack of liquidity, whereas the term deposits are exposed to losses which reduce the moral hazard induced by the demand deposit insurance.The double liability forces the shareholders of the defaulting banks to make supplementary payments limited to the nominal value of the owned shares. This combines the advantages of the limited liability and the unlimited liability.The efficiency of both propositions implies the enforcement of a closure rule of the banks whose net worth is close to zero.La garantie des dépôts rend la valeur des dépôts indépendante du comportement des autres déposa- nts ou de la valeur des actifs bancaires. Son instauration induit un aléa moral qui peut menacer la stabilité du système bancaire. L’efficacité de ce mécanisme dépend de la maîtrise de l’aléa moral. Cela suppose, entre autres, la responsabilisation des agents, y compris des déposants. Par conséquent, il existe un conflit entre le principe de la garantie des dépôts et les propositions courantes d’amélioration de ce dispositif.Les solutions envisagées dans cet article pour résoudre ce paradoxe sont la limitation de la garantie aux seuls dépôts à vue et l’instauration de la double responsabilité pour les actionnaires des banques.La garantie des dépôts à vue élimine l’incitation à la ruée due à la crainte de manque de liquidité, tandis que les dépôts à terme sont assortis d’une clause permettant à la banque de refuser tout retrait anticipé. Les titulaires des dépôts à terme s’exposent à des pertes, ce qui réduit l’aléa moral induit par la garantie des dépôts à vue.La double responsabilité oblige les actionnaires des banques défaillantes à effectuer des versements supplémentaires dans la limite de la valeur nominale des actions détenues. Cela réunit les avantages de la responsabilité limitée et de la responsabilité illimitée.L’efficacité des deux propositions suppose l’application d’une règle de fermeture des banques dont l’actif net avoisine zéro. (shrink)

According to US law, insurance companies can lawfully differentiate individual health insurance premiums on the basis of non-genetic medical information, but not on the basis of genetic information. The article reviews the case for such genetic exceptionalism. First, I critically assess some standard justifications. Next, I scrutinize an argument appealing to the view that genetically based premium differentiation expresses that persons do not all merit equal concern and respect. In the final section, I argue that even if genetic (...) exceptionalism is unjustified, there is a forceful luck egalitarian argument against basing premiums on genetic risks, to wit, that this tends to make some individuals worse off than others as a result of the bad brute luck involved in having a genetically determined, above-average risk of developing health problems. (shrink)