Risk Aversion, Insurance Insurance, and the Limits of Regulation

24 Pages Posted: 11 Feb 2016  

Kenneth S. Abraham

University of Virginia School of Law

Date Written: 2015

Abstract

The heart of insurance – what enables insurance to function – is risk aversion. It follows from the fact that potential policyholders are risk averse that sometimes they are also averse to the risk that insurance covering a loss will not be available or will not be reliable. In this Article I show that administrative and judicial regulation is sometimes directed at providing insurance against these risks. I call this “insurance insurance,” and explore where this way of thinking about the potential insurance insurance features of the regulation of insurance may lead.

Keywords: insurance, insurance regulation

JEL Classification: K23

Suggested Citation

Abraham, Kenneth S., Risk Aversion, Insurance Insurance, and the Limits of Regulation (2015). 5 U.C. Irvine Law Review 513 (2015); Virginia Public Law and Legal Theory Research Paper No. 24. Available at SSRN: https://ssrn.com/abstract=2729876

Kenneth S. Abraham (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States
434-924-3616 (Phone)
434-982-2845 (Fax)

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