In this paper, we analyze under which conditions a self-supporting insur- ance guaranty fund can be beneficial for the policyholders in an incomplete mar- ket.Within the analyzed setting, we find out that in general, if existent, the potential advantages from its introduction cannot be fairly divided among the participating insurers. Thereby, we have to expect systematic wealth transfers between the policy- holders of different insurance companies.We introduce a framework for utility-based fund charges as a solution to this problem.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SoM - Responsible Corporate Competitiveness (RoCC)