An Examination of catastrophes, insurance guaranty funds

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Collection: Articles
Title: An Examination of catastrophes, insurance guaranty funds / Mary Kelly, Anne Kleffner, Grant Kelly
Author: Kelly, Mary
Notes: Sumario: Many countries have formalised solvency insurance programmes that provide payments to policyholders of insolvent insurers. Like most insurance schemes, these programmes operate most effectively when failures are firm- specific. Using Canada as a case study, we examine the issue of using ex post guaranty fund assessments following a peak peril loss resulting in the simultaneous failure of multiple insurers. In this case, the guaranty fund assessment levied on surviving insurers is so large that it causes a contagion effect: several insurers fail because of the asessment, and the end result is the collapse of the entire industry. We conclude with a discussion of possible policy alternatives to address this issue, including increasing prudential requirements, changing the ex post funding mechanism, prefunding the guaranty fund for a peak peril loss , using the government as the insurer of large catastrophic losses, or developing public-private partnerships. We highlight both prudential and public policy implications of each of these alternatives and make recommendations for countries that face a large peak peril relative to the size of the private insurance industry.
Related records: En: Geneva papers on risk and insurance : issues and practice. - Geneva : The Geneva Association, 1976- = ISSN 1018-5895. - 01/04/2020 Volumen 45 Número 2 - abril 2020 , p. 256-280
Materia / lugar / evento: Fondos de garantía Empresas de seguros Mercado de seguros Solvencia Fondo de Catástrofe Canadá
Other authors: Kleffner, Anne E.
Kelly, Grant
Other categories: 214
Rights: In Copyright (InC):
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