|
on Insurance Economics |
|
Issue of 2018‒02‒05
two papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Koijen, Ralph; Yogo, Motohiro |
| Abstract: | Insurers sell retail financial products called variable annuities that package mu- tual funds with minimum return guarantees over long horizons. Variable annuities accounted for $1.5 trillion or 34 percent of U.S. life insurer liabilities in 2015. Sales fell and fees increased after the 2008 financial crisis as the higher valuation of existing liabilities stressed risk-based capital. Insurers also made guarantees less generous or stopped offering guarantees entirely to reduce risk exposure. We develop an equilib- rium model of insurance markets in which financial frictions and market power are important determinants of pricing, contract characteristics, and the degree of market incompleteness. |
| JEL: | G22 G32 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12560&r=ias |
| By: | Blascak, Nathan (Federal Reserve Bank of Philadelphia); Mikhed, Vyacheslav (Federal Reserve Bank of Philadelphia) |
| Abstract: | We analyze whether the passage of the Affordable Care Act's dependent coverage mandate in 2010 reduced financial distress for young adults. U sing nationally representative, anonymized consumer credit report information, we find that young adults covered by the mandate lowered their past due debt, had fewer delinquencies, and had a reduced probability of filing for bankruptcy. These effects are stronger in geographic areas that experienced higher uninsured rates for young adults prior to the mandate's implementation. Our estimates also show that some improvements are transitory because they diminish after an individual ages out of the mandate at age 26. |
| Keywords: | Affordable Care Act; health insurance; consumer credit; financial distress |
| JEL: | D14 I13 I18 |
| Date: | 2018–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:18-3&r=ias |