WIN Magazine - Winter 2013 - (Page 14)
BY MARTIN GRACE
H AV E
voters and politicians hope that elections matter, it isn't always clear how
much they matter and what the real
effects elections have on voters and
Researchers looking at developing economies look at how elections
relate to the number or timing of
bank insolvencies. They hypothesized
that troubled banks were declared
insolvent after elections to increase
the likelihood of a successful election
for the party in charge. They find
modest evidence that elections affect
regulatory actions, but the problem
is that there are really so few elections and the decision maker (the
president or prime minister), while
an important decision maker, does
not really have direct oversight of
the banking industry. My coauthor,
Ty Leverty of the University of Iowa,
and I thought about this problem a
bit and decided to put this question
to the US insurance industry.
We thought the insurance industry would be a great laboratory for
this study for a number of reasons.
* First, we have a very mature market in a well-developed economy.
14 | v i e w t h i s i s s u e a t | www.aamgawin.org
* Second, we have among the best
regulatory practices worldwide.
* Third, we have a regulatory philosophy that allows insurance companies to fail-essentially because
failure and a subsequent wind-up
is cheaper in the long-run than
propping up an ailing insurer.
* Fourth, we have the insurance
industry regulated at the state
level-so this gives us 50 different governments to examine.
* Fifth, we have a selection of oversight models at the state level.
Some regulators are elected,
some are appointed by the governor, and some are selected by the
Table of Contents for the Digital Edition of WIN Magazine - Winter 2013
Disappearing…and Reappearing Risk: What Lies Ahead
An Innovative Solution for Reducing the Debt of College RMI Students
Does Politics Influence Regulatory Forebearance?
Predictive Analytics: The “Black Box” Used by Savvy Insurance Professionals
Just the Facts—On FATCA: Frequently Asked Questions on the Foreign Assets Tax Compliance Act
Your Reputation Matters, Online and Off
New Wholesale Insurance Product Focus: Protection from Hacked Bank Accounts: Protecting Small Business Policyholders
In the WIN-ner’s Circle
Index to Advertisers/ Advertisers.com
WIN Magazine - Winter 2013