scholarly journals Subrogation and the Theory of Insurance When Suits Can Be Brought for Losses Suffered

2018 ◽  
Vol 34 (4) ◽  
pp. 619-649
Author(s):  
A Mitchell Polinsky ◽  
Steven Shavell
Keyword(s):  
Moral Hazard ◽  
Insurance Coverage ◽  
Expected Value ◽  
Administrative Costs ◽  
Insurance Policies ◽  
Basic Case ◽  
Potential Source ◽  
Insured Individual ◽  
The Right

Abstract The theory of insurance is considered here when an insured individual may be able to sue another party for the losses that the insured suffered—and thus when an insured has a potential source of compensation in addition to insurance coverage. Insurance policies reflect this possibility through so-called subrogation provisions that give insurers the right to step into the shoes of insureds and to bring suits against injurers. In a basic case, the optimal subrogation provisions involve full retention by the insurer of the proceeds from a successful suit and the pursuit of all positive expected value suits. This eliminates litigation risks for insureds and results in lower premiums—financed by the litigation income of insurers, including from suits that insureds would not otherwise have brought. Moreover, optimal subrogation provisions are characterized in the presence of moral hazard, administrative costs, and non-monetary losses, and it is demonstrated that optimal provisions entail sharing litigation proceeds with insureds in the first two cases but not when losses are non-monetary. (JEL G22, K13, K41)

Assessing the Impact of Suicide Exclusion Periods on Life Insurance

Crisis ◽  
2010 ◽  
Vol 31 (4) ◽  
pp. 217-223 ◽  
Author(s):  
Paul Yip ◽  
David Pitt ◽  
Yan Wang ◽  
Xueyuan Wu ◽  
Ray Watson ◽  
...  
Keyword(s):  
Life Insurance ◽  
Accidental Death ◽  
Insurance Policy ◽  
Death Rates ◽  
Insurance Policies ◽  
Suicidal Death ◽  
Insured Individual ◽  
The Impact ◽  
Insurance Data ◽  
The Relationship

Background: We study the impact of suicide-exclusion periods, common in life insurance policies in Australia, on suicide and accidental death rates for life-insured individuals. If a life-insured individual dies by suicide during the period of suicide exclusion, commonly 13 months, the sum insured is not paid. Aims: We examine whether a suicide-exclusion period affects the timing of suicides. We also analyze whether accidental deaths are more prevalent during the suicide-exclusion period as life-insured individuals disguise their death by suicide. We assess the relationship between the insured sum and suicidal death rates. Methods: Crude and age-standardized rates of suicide, accidental death, and overall death, split by duration since the insured first bought their insurance policy, were computed. Results: There were significantly fewer suicides and no significant spike in the number of accidental deaths in the exclusion period for Australian life insurance data. More suicides, however, were detected for the first 2 years after the exclusion period. Higher insured sums are associated with higher rates of suicide. Conclusions: Adverse selection in Australian life insurance is exacerbated by including a suicide-exclusion period. Extension of the suicide-exclusion period to 3 years may prevent some “insurance-induced” suicides – a rationale for this conclusion is given.

Actual Problems of Compensation for Health Damage Caused During the Performance of Labor Duties

2021 ◽  
Vol 5 ◽  
pp. 77-81
Author(s):  
V. V. Kulakov ◽  
Keyword(s):  
Social Insurance ◽  
Insurance Coverage ◽  
Insurance Fund ◽  
Controversial Issues ◽  
Medical Organization ◽  
Social Insurance Fund ◽  
The Social ◽  
Health Damage ◽  
The Right

The article discusses the controversial issues of compensation for physical harm caused to an employee. The article analyzes the possibility of satisfying the claim for compensation of such expenses, presented directly to the harmer, provided that the insurance coverage is obtained at the expense of the Social Insurance Fund. The conclusion is made about the possibility of such a claim. At the same time, the conditions for its satisfaction are determined, including the victim»s need for such expenses, taking into account the right to choose a doctor and a medical organization, in the absence of signs of abuse of the right.

scholarly journals Responsibility Center Budgeting as a Mechanism to Deal with Academic Moral Hazard

2019 ◽  
Vol 49 (3) ◽  
pp. 13-23
Author(s):  
Gordon M. Myers
Keyword(s):  
Moral Hazard ◽  
Risk Averse ◽  
Central Administration ◽  
Financial Responsibility ◽  
The Right ◽  
Responsibility Center Budgeting ◽  
The University ◽  
Large Research ◽  
Responsibility Center

Universities face inherent informational asymmetries. These make university budgeting prone to various challenges including moral hazard. The last forty years has seen some large research- intensive universities move from centralized incremental budgeting to decentralized Responsibility Center Budgeting (RCB). It is assumed that a faculty chooses a level of costly effort in generating revenue for the university. The level of faculty effort is not observable by the central administration. When there is no revenue uncertainty or when the faculty is not risk averse, pure RCB is best from the perspective of the administration. The intuition is that pure RCB fully aligns financial responsibility with academic authority, that is, it makes the faculty the residual claimant. Once the faculty is risk averse, partial RCB is optimal. Partial RCB provides a balance between providing the right incentives to the faculty and the university reducing the revenue risk faced by the faculty.

scholarly journals Data protection in biobanks from a practical point of view: what must be taken into account during set-up and operation?

2019 ◽  
Vol 43 (6) ◽  
pp. 301-309 ◽  
Author(s):  
Johannes Drepper
Keyword(s):  
Data Protection ◽  
Point Of View ◽  
Legal Form ◽  
State Laws ◽  
General Data Protection Regulation ◽  
Administrative Costs ◽  
Explicit Consent ◽  
Set Up ◽  
The Right ◽  
Implementation Of Standards

Abstract The European General Data Protection Regulation (GDPR) incorporates many of the principles of data protection that were already in force in the past. Insofar the data protection requirements for German biobanks have not fundamentally changed since the GDPR became applicable in May 2018. In detail, however, new and relevant requirements have been added. Due to many derogation clauses that allow national deviations, federal and state laws must also be taken into account in Germany, depending on the legal form of the biobank or the supporting institution, which increases the complexity in individual cases. Research-oriented biobanks can still rely on informed, voluntary and explicit consent from patients or test persons. Other legal bases are also possible in certain cases. The information and transparency requirements have increased with the DSGVO, which has led to higher administrative costs. However, a major problem existed before and continues to exist in clarifying how biobanks deal with the right to know and the right not to know of their subjects, how this is explained in advance and which policy can be implemented in the long term, also in the context of targeted recruitment for later studies. The complexity of the regulatory framework and the resulting demands on biobanks make the development and implementation of standards unavoidable. In addition, it is recommended that such infrastructures be centralised, professionalised and equipped with the necessary resources.

scholarly journals Methodological Proposal for the Development of Insurance Policies for Building Components

CivilEng ◽  
2020 ◽  
Vol 1 (1) ◽  
pp. 1-9
Author(s):  
Miguel Macedo ◽  
Jorge de Brito ◽  
Carlos Oliveira Cruz ◽  
Ana Silva
Keyword(s):  
Prediction Models ◽  
Methodological Approach ◽  
Insurance Coverage ◽  
Building Envelope ◽  
Premature Failure ◽  
Risk Premiums ◽  
Insurance Policies ◽  
Different Types ◽  
Building Components ◽  
Structured Approach

Insurance is a growing economic activity within the construction sector. Homes and buildings are perhaps the most important investment an individual makes in his/her lifetime. Nevertheless, the market for insurance coverage policies applied to the building envelope is in an embryonic stage, mainly due to the lack of knowledge in terms of risk and costs associated to the failure of these elements. This study provides an innovative and methodological approach to the development of an insurance product that targets the obsolescence of building components. In defining a structured approach to the design of insurance policies for buildings, the use of the service life prediction models proposed in this study allows establishing different types of insurance policies with different risk premiums and evaluating different losses and risks accepted by the owners, thus promoting the increase of the patrimonial value of the asset and reducing the risk of premature failure and the uncertainty of the costs of maintenance during its life cycle.

The role of ex ante regulations in addressing problems of moral hazard in agricultural insurance

2002 ◽  
Vol 62 (2) ◽  
pp. 103-116 ◽  
Author(s):  
Calum G. Turvey ◽  
Michael Hoy ◽  
Zahirul Islam
Keyword(s):  
Moral Hazard ◽  
Crop Production ◽  
Insurance Coverage ◽  
Agricultural Insurance ◽  
Agricultural Producers ◽  
Growing Seasons ◽  
Input Use ◽  
The Cost ◽  
Input Level

We develop a theoretical model of input use by agricultural producers who purchase crop insurance, and thus may engage in moral hazard. Through simulations, our findings show a combination of partial insurance coverage and partial monitoring of inputs may reduce substantially the problems associated with moral hazard. The minimum level of input use that must be required by regulation is determined to be substantially lower than the optimal or actual input level chosen by producers. Because the use of inputs for crop production occurs in many stages over the pre‐planting, planting, and growing seasons, only a minimal input requirement is needed. Thus, the cost of implementing such a regulation can be kept much lower than would be the case for a regulation of complete monitoring of input usage.

The ethics of child-soldiering in the Congo

Young ◽  
2010 ◽  
Vol 18 (3) ◽  
pp. 339-358 ◽  
Author(s):  
Kasper Hoffmann
Keyword(s):  
Young Men ◽  
Conflict Theory ◽  
Failed States ◽  
Personal Protection ◽  
National Liberation ◽  
Armed Group ◽  
Personal Gain ◽  
Underdeveloped Countries ◽  
Potential Source ◽  
The Right

In cutting-edge conflict theory, ‘young men’ are framed as a potential source of violence and insecurity in underdeveloped countries, especially in the so-called ‘failed states’. Supposedly, ‘young men’ bereft of socio-economic opportunities constitute a dangerous sub-population which can easily be recruited by ‘Spoilers’, or warlords when the pursuit of personal gain through the use of violence is rational; that is, in situations where the state has failed and therefore has no monopoly over the means of violence. Drawing on fieldwork among the Maï-Maï of South Kivu, I challenge the notion that the young fighters of the Maï-Maï were easily lured into the militias because they lacked other exit strategies. Recruitment actually followed a much more complex pattern. The young Maï-Maï fighters were either forcefully recruited or joined voluntarily for one or more of the following reasons: in order to exact vengeance on the ‘enemy’, for personal protection; to fight for national liberation; to protect a given community; for the right to enjoy the spoils of modernity; and to recast a disempowered and humiliated self into a vigorous and virile subject. In this article, therefore, I argue that recruitment into a non-state armed group was a question of ethics instead of the machinations of a universal instinct secretly at work.

A NOTE ON USING EXCESSIVE PERKS TO RESTRAIN THE HIDDEN SAVING PROBLEM

2012 ◽  
Vol 18 (2) ◽  
pp. 480-496 ◽  
Author(s):  
YiLi Chien ◽  
Joon Song
Keyword(s):  
Moral Hazard ◽  
High Profile ◽  
Moral Hazard Problem ◽  
Personal Use ◽  
The Right ◽  
Deviation Problem ◽  
Wage Income

We offer an explanation for why perks are overprovided to high-profile CEOs. Hidden saving by an agent makes it difficult for a principal to control the agent's moral hazard problem. However, an agent typically cannot save perks; for example, a CEO who owns the right to use a private jet for personal use cannot bank the unused airplane hours. Thus, the principal may oversupply the agent perks to avoid the hidden saving problem. When the agent canbothexert lower effortandsave wage income, i.e., in the presence of thedouble deviation problem, we show that the principal supplies more perks than the agent would have purchased on his own (i.e.,excessiveperks).

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