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The case of the missing billions: estimating losses to customers due to mis-sold life insurance policies

Author

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  • Monika Halan
  • Renuka Sane
  • Susan Thomas

Abstract

Regulation of retail finance has been the subject of policy interventions in several countries, including India. Much of the regulatory change in India has been carried out with little support of empirical evidence. This paper is motivated by questions of the evidence of losses due to mis-sales of financial products. It constructs two measures of the loss to customers due to mis-selling of life insurance policies. The first is calculated using the value of lapsed policies, and the second uses the persistence of premium payments. Both arrive at estimates of around USD 28 billion lost between 2004 and 2011.

Suggested Citation

  • Monika Halan & Renuka Sane & Susan Thomas, 2014. "The case of the missing billions: estimating losses to customers due to mis-sold life insurance policies," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 17(4), pages 285-302, October.
    • Handle: RePEc:taf:jecprf:v:17:y:2014:i:4:p:285-302
    DOI: 10.1080/17487870.2014.971797
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    Cited by:

    1. Reurink, Arjan, 2016. "Financial fraud: A literature review," MPIfG Discussion Paper 16/5, Max Planck Institute for the Study of Societies.
    2. Sane, Renuka, 2019. "Stock market trading in the aftermath of an accounting scandal," Emerging Markets Review, Elsevier, vol. 40(C), pages 1-1.
    3. Renuka Sane, 2019. "The Way Forward for Personal Insolvency in the Indian Insolvency and Bankruptcy Code," Working Papers id:12987, eSocialSciences.
    4. Chul Choi, 2024. "The Microstructure of Mis-Selling: Financial Investment Markets and Regulation in Korea," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 13, January.
    5. Sane, Renuka & Halan, Monika, 2017. "Misled and mis-sold: financial misbehaviour in retail banks?," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 429-444.
    6. Rashmi Baura & Renuka Sane, 2014. "Repayment in microfinance: The Role of financial literacy and caste," Discussion Papers 14-06, Indian Statistical Institute, Delhi.
    7. Saibal Ghosh, 2020. "Access to and use of finance in India: does religion matter?," Indian Economic Review, Springer, vol. 55(1), pages 67-92, June.
    8. Renuka Sane & Susan Thomas, 2014. "The way forward for India's National Pension System," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-022, Indira Gandhi Institute of Development Research, Mumbai, India.
    9. Malhotra, Shefali & Patnaik, Ila & Roy, Shubho & Shah, Ajay, 2018. "Fair play in Indian Health Insurance," Working Papers 18/228, National Institute of Public Finance and Policy.
    10. Stefan J. Vella & Simon Grima & Eleftherios I. Thalassinos, 2020. "The Impact and Challenges of the Insurance Distribution Directive (IDD) on Maltese Insurance Undertakings," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 10(1), pages 120-134.
    11. Halan, Monika & Sane, Renuka, 2017. "Regulating consumer finance: Do disclosures matter? The case of life insurance," Working Papers 17/212, National Institute of Public Finance and Policy.
    12. Ajay Shah, 2023. "The journey of Indian finance," Working Papers 25, xKDR.

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