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Rethinking Consumer Protection Regulation in Insurance Markets

Author

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  • Sharon Tennyson

Abstract

This paper examines consumer protection regulation in insurance markets and discusses how regulation could be made more efficient and robust. The paper argues that regulatory costs could be lowered and effectiveness enhanced by better targeting regulations to address market failures. Regulations should also recognize and attempt to harness the private incentives of market participants to encourage behaviors that are consistent with regulatory objectives. Applying theoretical and empirical insights from academic research and the experiences of other jurisdictions, specific approaches that make use of these principles are discussed.

Suggested Citation

  • Sharon Tennyson, 2010. "Rethinking Consumer Protection Regulation in Insurance Markets," NFI Policy Briefs 2010-PB-07, Indiana State University, Scott College of Business, Networks Financial Institute.
    • Handle: RePEc:nfi:nfipbs:2010-pb-07
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    File URL: http://www.indstate.edu/business/sites/business.indstate.edu/files/Docs/2010-PB-07_Tennyson.pdf
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    References listed on IDEAS

    as
    1. Georges Dionne & Olfa Ghali, 2005. "The (1992) Bonus‐Malus System in Tunisia: An Empirical Evaluation," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 72(4), pages 609-633, December.
    2. Leemore Dafny, 2008. "Are Health Insurance Markets Competitive?," NBER Working Papers 14572, National Bureau of Economic Research, Inc.
    3. Ginger Zhe Jin & Phillip Leslie, 2003. "The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 409-451.
    4. Mary A. Weiss & Sharon Tennyson & Laureen Regan, 2010. "The Effects of Regulated Premium Subsidies on Insurance Costs: An Empirical Analysis of Automobile Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(3), pages 597-624, September.
    5. Martin F. Grace, 2010. "The Insurance Industry and Systemic Risk: Evidence and Discussion," NFI Policy Briefs 2010-PB-02, Indiana State University, Scott College of Business, Networks Financial Institute.
    6. Scott Harrington, 2006. "Federal Chartering of Insurance Companies: Options and Alternatives for Transforming Insurance Regulation," NFI Policy Briefs 2006-PB-02, Indiana State University, Scott College of Business, Networks Financial Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Sharon Tennyson, 2011. "Consumers’ Insurance Literacy," NFI Policy Briefs 2011-PB-06, Indiana State University, Scott College of Business, Networks Financial Institute.
    2. John A. Tatom & Terrie Troxel, 2011. "A Report to the Federal Insurance Office," NFI Policy Briefs 2011-PB-07, Indiana State University, Scott College of Business, Networks Financial Institute.
    3. Annika Pape, 2014. "Miscounselling in the German Insurance Market—Utility-Orientated Implications for the Meaning of Miscounselling," Journal of Consumer Policy, Springer, vol. 37(4), pages 561-582, December.

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    More about this item

    Keywords

    Protection; Insurance;

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection

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