Centro de Documentación de Fundación MAPFRE - An Examination of catastrophes, insurance guaranty funds

MAP20200022817

An Examination of catastrophes, insurance guaranty funds / Mary Kelly, Anne Kleffner, Grant Kelly

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

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

1. Fondos de garantía . 2. Empresas de seguros . 3. Mercado de seguros . 4. Solvencia . 5. Fondo de Catástrofe . 6. Canadá . I. Kleffner, Anne E. . II. Kelly, Grant . III. Title.