This paper documents that managers having large private benefits of control tend to purchase more insurance to reduce their exposure to the firm's unsystematic risk. Private benefits of control are estimated as the difference between the price of the stock and an equivalent synthetic stock (constructed with options). Our empirical analysis controls for the simultaneity between the choice of the...

Legal Solutions in Health Reform is a project funded by The RobeRT Wood Johnson FoundaTion Prepared for The o'neill insTiTuTe FoR naTional and Global healTh laW aT GeoRGeToWn univeRsiTy 600 new Jersey avenue, nW Washington, dC 20001

Catastrophe insurance, like most types of insurance, is essentially a protective put option purchased by someone to ensure or lock in the value of some underlying asset, be it a house, car, or health. The buyer pays the insurance company a premium to purchase the policy. If some predetermined event occurs, reducing the value of the protected asset, the insurance company effectively buys or repl...

Genetic testing is a concern for insurers if they cannot use test results in underwriting. We model adverse selection in an insurance market with genetic testing for breast and ovarian cancer. Increased forces of mortality resulting from a family history of cancer or a positive test for a BRCA mutation are calculated. Using a Markov model, we estimate costs of adverse selection, assuming variou...

2/9/06 2:08:34 PM Health savings accounts, or HSAs, are a new health insurance option that became available in 2004. HSAs couple a tax-preferred savings account (the HSA) with high-deductible health insurance. Enrollees or their employers, or both, make tax-free contributions to the HSA. Enrollees use the funds in their HSAs to purchase medical care until they reach their deductibles. At that p...

Life insurance companies in the Philippines are active contributors to country’s social and national development. This study aimed assess purchase of life among faculty members Visayas State University-Main Campus Baybay City, Leyte, Philippines. A stratified random sampling procedure was used gather pertinent data from 195 participants. Descriptive measures, correlation analysis, binary logit ...

Shows equilibrium always exists (Rothschild-Stiglitz-Wilson model) when firms enforce policy exclusivity via strategic (profit-maximizing) communication of client purchases. Strategic communication induces two equilibrium types: partial communication of purchase information or non-communication which exhibits a lemon effect (low-risk purchase no insurance). Nonetheless, Jaynes' configuration (J...