Catastrophe Risk Financing in the United States and the European Union: A Comparative Analysis of Alternative Regulatory Approaches

31 Pages Posted: 13 Oct 2009

See all articles by Robert W. Klein

Robert W. Klein

Georgia State University

Shaun Wang

Georgia State University's Robinson College of Business

Abstract

The regulation of insurance companies in the United States and the European Union (EU) continues to evolve in response to market forces and the changing nature of risk but with somewhat different philosophies and at different rates. One important area where both economic realities and markets are changing is catastrophe risk and its financing. This article examines and compares regulatory and other government policies in the United States and the EU generally and their approaches to the financing of catastrophe risk specifically. It is important to understand the fundamental differences between the two systems to gain insights into their disparate treatment of catastrophe risk financing. Although policies could be improved in both jurisdictions, we argue that the much greater reform is needed in the United States relative to the EU regulatory policies that are being developed. We offer recommendations on how U.S. policies could be significantly improved as well as comment on issues facing the EU. We conclude with some observations on the needs for further progress in the U.S. and EU regulatory systems.

Suggested Citation

Klein, Robert Warren and Wang, Shaun S., Catastrophe Risk Financing in the United States and the European Union: A Comparative Analysis of Alternative Regulatory Approaches. Journal of Risk and Insurance, Vol. 76, Issue 3, pp. 607-637, September 2009. Available at SSRN: https://ssrn.com/abstract=1487229 or http://dx.doi.org/10.1111/j.1539-6975.2009.01308.x

Robert Warren Klein (Contact Author)

Georgia State University ( email )

5387 Northchester Ct
Atlanta, GA GA 30338
United States
404-386-1591 (Phone)

Shaun S. Wang

Georgia State University's Robinson College of Business ( email )

P.O. Box 4036
Atlanta, GA 30302-4036
United States
404-413-7486 (Phone)
404-413-7499 (Fax)

HOME PAGE: http://www.rmi.gsu.edu/Faculty/pages/wang.htm

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