nep-ias New Economics Papers
on Insurance Economics
Issue of 2021‒01‒11
twenty-one papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Performance Pay in Insurance Markets: Evidence from Medicare By Michele Fioretti; Hongming Wang
  2. Thailand; Financial Sector Assessment Program-Detailed Assessment of Observance-Insurance Core Principles By International Monetary Fund
  3. Did COVID-19 Change Life Insurance Offerings? By Timothy F. Harris; Aaron Yelowitz; Charles J. Courtemanche
  4. Portfolio optimization of euro-denominated funds in French life insurance By Runsheng Gu; Lioudmila Vostrikova; Bruno Séjourné
  5. Life-Care Tontines By Hieber, Peter; Lucas, Nathalie
  6. France; Financial Sector Assessment Program-Technical Note-Issues in Insurance Supervision and Regulation By International Monetary Fund
  7. Self-employment in the Covid-19 crisis By Jack Blundell; Stephen Machin
  8. Revalorisation 2019 des contrats d’assurance-vie et de capitalisation – engagements à dominante retraite collectifs By Gaëlle Capitaine; Frédéric Ahado
  9. Deposit Insurance, Bank Ownership and Depositor Behavior By Sümeyra Atmaca; Karolin Kirschenmann; Steven Ongena; Koen Schoors
  10. Insights from an analysis of Seguro-Defeso’s legal framework By Luca Lazzarini
  11. Hospital inpatients costs dynamics at older ages: A frequency-severity approach By Avalosse, Hervé; Denuit, Michel; Lucas, Nathalie
  12. Revalorisation 2019 des contrats d’assurance-vie et de capitalisation – engagements à dominante épargne et retraite individuelle By Gaëlle Capitaine; Frédéric Ahado
  13. Can Interventions Spur Development of the Insurance Sector? By World Bank
  14. Risk reduction by conditional mean risk sharing with application to collaborative insurance By Denuit, Michel; Robert, Christian Y.
  15. France; Financial Sector Assessment Program-Technical Note-Risk Analysis of Banking and Insurance Sector By International Monetary Fund
  16. A Pandemic Business Interruption Insurance By Alexis Louaas; Pierre Picard
  17. From risk sharing to risk transfer: the analytics of collaborative insurance By Denuit, Michel; Robert, Christian Y.
  18. The Effect of Unemployment Benefits on Health and Living Standards in Turkey: Evidence from Structural Equation Modelling and Regression Discontinuity Design By Eleftherios Giovanis; Oznur Ozdamar; Burcu Özdas
  19. Stop-loss protection for a large P2P insurance pool By Denuit, Michel; Robert, Christian Y.
  20. Extended unemployment benefits and the hazard to employment By Cederlöf, Jonas
  21. Malta; Financial Sector Assessment Program-Technical Note-Insurance and Securities Sector Supervision By International Monetary Fund

  1. By: Michele Fioretti (Department of Economics, Sciences Po); Hongming Wang (Center for Global Economic Systems, Hitotsubashi University)
    Abstract: Public procurement bodies increasingly resort to pay-for-performance contracts to promote efficient spending. We show that firm responses to pay-for-performance can widen the inequality in accessing social services. Focusing on the U.S. Medicare Advantage market, we find that insurers with higher quality ratings responded to bonus payments by selecting healthier enrollees with premium differences across counties. Selection is profitable because the quality rating fails to adjust for differences in the health of enrollees. Selection inflated the bonus payments and shifted the supply of high-rated insurance to the healthiest counties, hurting the healthcare access of sicker patients in the riskiest counties.
    Keywords: pay-for-performance, Medicare Advantage, risk selection, quality ratings, health insurance access
    JEL: I
    Date: 2020
  2. By: International Monetary Fund
    Abstract: This Detailed Assessment of Observance on Insurance Core Principles on Thailand discusses that the government of Thailand has made a concerted effort to develop the insurance sector. The government has implemented a series of insurance development plans toward this end. Some significant regulatory and supervisory challenges remain, however, if Thailand is to continue to meet the pressures of a changing market and to continue to build the trust on which future growth depends. Consideration should be given to vesting more supervisory authority for key supervisory decisions with the Commission rather than with the Minister and Cabinet. Vesting authority with the Commission will help to ensure that the insurance supervisor has adequate powers to meet the objectives of insurance supervision. With respect to winding up and exit from the market, the insurance legislation should be amended to clearly establish a point at which it is no longer permissible for a troubled insurer to continue in business.
    Keywords: Insurance companies;Insurance;Internal controls;Capital adequacy requirements;Auditing;ISCR,CR,risk management,state enterprise,corporate governance,insurance coverage,steering committee
    Date: 2019–10–24
  3. By: Timothy F. Harris; Aaron Yelowitz; Charles J. Courtemanche
    Abstract: The profitability of life insurance offerings is contingent on accurate projections and pricing of mortality risk. The COVID-19 pandemic created significant uncertainty, with dire mortality predictions from early forecasts resulting in widespread government intervention and greater individual precaution that reduced the projected death toll. We analyze how life insurance companies changed pricing and offerings in response to COVID-19 using monthly data on term life insurance policies from Compulife. We estimate event-study models that exploit well-established variation in the COVID-19 mortality rate based on age and underlying health status. Despite the increase in mortality risk and significant uncertainty, we find limited evidence that life insurance companies increased premiums or decreased policy offerings due to COVID-19.
    JEL: D81 I13
    Date: 2020–12
  4. By: Runsheng Gu (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - Institut National de l'Horticulture et du Paysage); Lioudmila Vostrikova (LAREMA - Laboratoire Angevin de Recherche en Mathématiques - UA - Université d'Angers - CNRS - Centre National de la Recherche Scientifique); Bruno Séjourné (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - Institut National de l'Horticulture et du Paysage)
    Abstract: In this paper, we study a portfolio optimization problem related to the asset management of life insurance companies. In a persistent low-interest-rate environment, the conditions under which the life insurance business operates are modified. To continue to offer a favorable return to the insured, life insurers should allocate more risky assets to their portfolio. But, doing so, they would be exposed to not being able to guarantee the capital. Besides, the maturity of the life insurance market creates potential conditions for massive withdrawals. We address those risk exposures by applying ruin models. We obtain formulae for the first two moments of the value of a life insurance company, depending on its activity and investment strategy. We show that the optimal asset allocation strategies can differ considerably for small changes in certain parameters of the insurer's business: the probability of insolvency, the level of guaranteed capital, and the premium rate.
    Abstract: Dans cet article, nous étudions un problème d'optimisation de portefeuille lié à la gestion d'actifs d'une compagnie d'assurance-vie pour son fonds euro. Dans un environnement persistant de taux bas, les conditions de fonctionnement des activités d'assurance-vie sont modifiées. Pour continuer à offrir une rémunération attractive aux assurés, les assureurs vie devraient introduire davantage d'actifs risqués dans leur portefeuille. Mais, ce faisant, ils s'exposeraient à ne pas pouvoir garantir le capital, ce qui est en contradiction avec les termes du contrat. Par ailleurs, la maturité du marché de l'assurance-vie en France crée des conditions potentielles de retraits massifs. En raison de ces multiples expositions aux risques, nous appliquons des modèles de ruine à ce problème global. Nous déterminons la formulation mathématique des deux premiers moments de la valeur d'une compagnie d'assurance-vie, en fonction de son activité et de sa stratégie d'investissement. Nous résolvons numériquement le problème d'optimisation sous contraintes. Nos résultats permettent de mieux analyser les problèmes de gestion de portefeuille des compagnies. Les stratégies d'allocation d'actifs optimales peuvent varier considérablement pour des changements minimes de certains paramètres de l'activité des assureurs : la probabilité d'insolvabilité, le niveau de capital garanti et le taux de prime.
    Keywords: life insurance,portfolio optimization,low interest rates,ruin theory
    Date: 2020–11–26
  5. By: Hieber, Peter (Université catholique de Louvain, LIDAM/ISBA, Belgium); Lucas, Nathalie (Université catholique de Louvain, LIDAM/ISBA, Belgium)
    Abstract: This paper builds on the advantage of pooling mortality and morbidity risks, and their inherent natural hedge. We focus on classical mutual risk pooling schemes, i.e. tontines, and introduce a "life-care tontine", which in addition to retirement income targets the needs of long-term care coverage for an ageing population. This scheme reduces adverse selection costs and is actuarially fair at each time. Pooling heterogeneous risks (i.e. different age groups) is shown to reduce overall risk. The life-care tontine is compared to a classical life-care annuity. Technically, we rely on a backward iteration to deduce the smoothed cashows pattern and the separation of cash-ows in a fixed withdrawal and mortality and/or morbidity credits. We apply our model to real life data, illustrating the adequacy of the proposed tontine scheme.
    Keywords: mutual insurance ; long-term care ; morbidity and mortality risk ; tontines ; pooled annuities ; life-care insurance
    Date: 2020–01–01
  6. By: International Monetary Fund
    Abstract: This technical note focuses on issues in insurance supervision and regulation on France. France has a very high level of insurance penetration, particularly for life insurance. For each insurance company, a risk assessment is undertaken on at least an annual basis and is recorded in a supervisory review process tool. French insurance companies are significant users of the Volatility Adjustment (VA), with companies representing more than 90 percent of the technical provisions in the French insurance industry using the VA. The report discusses that French authorities should advocate to the relevant EU authorities to introduce a minimum number of independent members of the Administrative Management or Supervisory Boards, at least one-third. Autorité de Contrôle Prudentiel et de Résolution should review the intensity and frequency of on-site supervision and its relationship to off-site supervision. With several other meetings with insurance companies possible, some of these meetings may be close to be called as focused on-site inspections.
    Keywords: Insurance companies;Insurance;Solvency;Liquidity risk;Financial conglomerates;ISCR,CR,insurer,France,life insurance,insurance premium,life insurance insurance company
    Date: 2019–10–29
  7. By: Jack Blundell; Stephen Machin
    Abstract: The Covid-19 shock is one of the largest economic shocks that has taken place in living memory. The crisis has served to highlight the challenges governments face in extending social insurance to self-employed workers, for whom it is difficult to verify work behaviour. Chancellor Rishi Sunak described designing a "deliverable and fair" support package for self-employed workers as "incredibly complicated". The self-employed, left out from the Coronavirus Job Retention Scheme (CJRS) covering furloughed workers, were offered a lifeline in the form of the Self-employment Income Support Scheme (SEISS). As an entirely new form of government support, it is important to understand the extent to which the self-employed are accessing the SEISS and, among the self-employed, who the beneficiaries are.
    Keywords: self-employed workers, unemployment, SEISS, CJRS
    Date: 2020–05
  8. By: Gaëlle Capitaine; Frédéric Ahado
    Abstract: Les contrats d’assurance-vie collective sont majoritairement des produits offrant aux bénéficiaires un complément de revenu au moment de la retraite. Compte tenu des engagements très longs de ces contrats, le niveau des revalorisations attribuées par les organismes d’assurance doit être analysé au regard de l’environnement de taux bas. L’analyse se concentre sur les engagements liés aux retraites dans le cadre de l’assurance-vie, en regroupant plusieurs catégories de contrats1, représentant 136 milliards d’euros d’encours en 2019. La plus importante des catégories, les contrats collectifs en cas de vie, représente 4/5ème des encours des contrats d’assurance-vie à dominante retraite. Le taux de revalorisation moyen des fonds euros des contrats collectifs à dominante retraite (hors retraite à points) est en forte baisse : 2,18 % en 2019, contre 2,43 % en 2018 (net de prélèvements sur encours et avant prélèvements sociaux). Cette baisse du taux de revalorisation, supérieure à l’évolution observée du taux de rendement de l’actif, permet aux assureurs de doter la provision pour participation aux bénéfices. Le niveau de provisionnement de la participation aux bénéfices continue ainsi d’augmenter légèrement pour s’établir à 2,3 % des encours (contre 2,2 % en 2018) pour ces catégories de contrat. Les taux de revalorisation des contrats collectifs en cas de vie s’établissent à 2,29 % et ceux des contrats PERP demeurent les plus faibles du marché à 1,27 %. Il existe en effet des contraintes de taux techniques très différentes entre les catégories, les PERP ayant un taux technique nul. S’agissant des garanties octroyées, le taux technique moyen rattaché aux contrats d’assurance-vie collectifs à dominante retraite est en baisse : 1,32 % en 2019, contre 1,42 % en 2018. Cette statistique ne rend cependant pas compte de la forte disparité des situations individuelles, selon la composition de leurs portefeuilles et des garanties offertes aux souscripteurs. Enfin, le taux de chargement de gestion des contrats payé par les assurés se maintient par rapport à 2018 à 0,49 % en moyenne en 2019. Les contrats les plus récents affichent un taux de chargement le plus souvent compris entre 0,25 % et 0,75 % et toujours inférieur à 1 %.
    Keywords: .
    Date: 2020
  9. By: Sümeyra Atmaca; Karolin Kirschenmann; Steven Ongena; Koen Schoors (-)
    Abstract: We employ proprietary data from a large bank to analyze how – in times of crisis – depositors react to a bank nationalization, re-privatization and an accompanying increase in deposit insurance. Nationalization slows depositors fleeing the bank, provided they have sufficient trust in the national government, while the increase in deposit insurance spurs depositors below the new 100K limit to deposit more. Prior to nationalization, depositors bunch just below the thenprevailing 20K limit. But they abandon bunching entirely during state-ownership, to return to bunching below the new 100K limit after re-privatization. Especially depositors with low switching costs are moving money around.
    Keywords: deposit insurance, coverage limit, bank nationalization, depositor heterogeneity
    JEL: G21 G28 H13 N23
    Date: 2020–12
  10. By: Luca Lazzarini (IPC-IG)
    Abstract: The Seguro-Defeso is a contributory social security measure targeting artisanal fishers in Brazil. After almost 30 years since its enactment, an impact evaluation of the programme regarding the socioeconomic conditions of beneficiaries is currently under way. The purpose of this One Pager is to highlight key aspects of the programmes legal framework, unveiling the implications for identifying the target population as well as programme implementation bottlenecks that are relevant for the impact evaluation.
    Keywords: Seguro-Defeso; Defeso; fisheries; social security; unemployment insurance
    Date: 2020–12
  11. By: Avalosse, Hervé; Denuit, Michel (Université catholique de Louvain, LIDAM/ISBA, Belgium); Lucas, Nathalie (Université catholique de Louvain, LIDAM/ISBA, Belgium)
    Abstract: This paper studies the dynamics in end-of-life inpatients hospital expenses. A new model is proposed for hospital care expenditures based on a frequency-severity decomposition including age, calendar time, longevity dynamics, and time-to-death. These features are treated as continuous explanatory variables in nonlinear regression models with Poisson, Gamma and Tweedie error structures. Proximity to death is controlled for, as well as longevity improvements by including projected life tables into the proposed model. This allows the analyst to isolate the different effects impacting late-life hospital costs. A detailed case study performed on Belgian data illustrates the modeling strategy proposed in this paper. A comparison with the alternative model targeting total costs, not distinguishing between frequency and severity components, demonstrates the superior explanatory power of the proposed approach, revealing that total costs are mainly driven by their frequency component for the data under consideration.
    Keywords: health insurance ; projected life tables ; time-to-death model ; Generalized Additive Model (GAM)
    Date: 2020–01–01
  12. By: Gaëlle Capitaine; Frédéric Ahado
    Abstract: Le niveau des revalorisations attribuées par les organismes d’assurance aux polices d’assurance-vie et aux bons de capitalisation s’inscrit dans le contexte de taux d’intérêt bas persistants. Le taux de revalorisation moyen des fonds euros des contrats individuels (y compris groupes ouverts) est en forte baisse : 1,46 % en 2019, contre 1,83 % en 2018 (net de prélèvements sur encours et avant prélèvements sociaux), soit -37 points de base. La baisse du taux de revalorisation, supérieure à l’évolution observée du taux de rendement de l’actif, permet aux assureurs de doter la provision pour participation aux bénéfices. Le niveau de provisionnement de la participation aux bénéfices continue ainsi d’augmenter en 2019 à un rythme soutenu pour s’établir à 4,7 % des provisions d’assurance-vie (contre 4,3 % en 2018 et 4,0 % en 2017). S’agissant des garanties octroyées, le taux technique moyen rattaché aux contrats d’assurance-vie individuels, en baisse moins marquée, s’établit à 0,41 % en 2019 contre 0,44 % en 2018. Cette statistique ne rend cependant pas compte de la forte disparité des situations individuelles, les organismes offrant les garanties les plus élevées pouvant voir leurs résultats significativement affectés, dans un contexte de baisse de leurs revenus financiers. Enfin, le taux de chargement de gestion des contrats payé par les assurés se situe en moyenne à 0,62 % en 2019. Si la majorité des contrats affichent un taux de chargement compris entre 0,5 % et 0,75 %, les contrats les plus récents se caractérisent par les taux de chargement les plus élevés : 40 % des contrats commercialisés après 2010 sont compris entre 0,75 % et 1 % contre 11 % seulement pour ceux commercialisés avant 1990.
    Keywords: .
    Date: 2020
  13. By: World Bank
    Keywords: Public Sector Development - Regulatory Regimes Finance and Financial Sector Development - Finance and Development Finance and Financial Sector Development - Financial Structures Finance and Financial Sector Development - Insurance & Risk Mitigation
    Date: 2020–01
  14. By: Denuit, Michel; Robert, Christian Y.
    Abstract: Consider an economic agent who has to select the optimal pool for a risk to be shared with other participants, adopting the conditional mean risk sharing rule. This paper shows that pointwise comparison of the Lorenz or concentration curves associated to the respective total losses of the pools under consideration allows the agent to decide which pool is preferable. The paper then concentrates on independent losses. The monotonicity of the respective contributions of the participants is established with respect to the convex order, showing that increasing the number of participants is always beneficial provided the conditional mean risk sharing rule is used to allocate independent losses among participants. These results are finally applied to collaborative insurance. It is shown that provided individual losses are mutually independent, there always exists a critical number of participants such that collaborative insurance outperforms commercial one.
    Keywords: conditional expectation ; risk pooling ; Lorenz curve ; concentration curve ; convex order
    Date: 2020–01–01
  15. By: International Monetary Fund
    Abstract: This technical note presents risk analysis of banking and insurance sector in France. The assessment is based on stress tests, which simulate the health of banks, insurers under severe yet plausible (counterfactual) adverse scenarios. The stress tests reveal that banks and insurers would be resilient against simulated shocks, although some challenges remain. French banks have improved their capitalization and asset quality; however, profitability remains challenged. The report also highlights that profitability is pressured on both the income and expense sides. Banks’ ability to generate higher interest income is constrained by persistently low interest rates, and market businesses including trading activities have contracted in recent years. Growth-at-risk (GaR) analysis shows that the biggest contributing factors to the risk of growth are cost of funding and stock market prices. Financial conditions continue to tighten gradually since mid-2017; though the overall conditions remain accommodative. Risks stemming from loans to households seem to be contained over the short- to medium-term horizon, given relatively strong households’ balance sheets, no evidence of significant misalignment in house prices, social safety nets, and fixed interest rates.
    Keywords: Banking;Stress testing;Insurance companies;Liquidity risk;Liquidity requirements;ISCR,CR,BNP Paribas,Crédit Agricole,risk tolerance,cash flow
    Date: 2019–10–29
  16. By: Alexis Louaas; Pierre Picard
    Abstract: We analyze how pandemic business interruption coverage can be put in place by building on capitalization mechanisms. The pandemic risk cannot be mutualized since it affects simultaneously a large number of businesses, and furthermore, it has a systemic nature because it goes along with a severe decline in the real economy. However, as shown by COVID-19, pandemics affect economic sectors in a differentiated way: some of them are very severely affected because their activity is strongly impacted by travel bans and constraints on work organisation, while others are more resistant. This opens the door to risk coverage mechanisms based on a portfolio of financial securities, including long-short positions and options in stock markets. We show that such financial investment allow insurers to offer business interruption coverage in pandemic states, while simultaneously hedging the risks associated with the alternation of bullish and bearish non-pandemic states. These conclusions are derived from a theoretical model of corporate risk management, and they are illustrated by numerical simulations, using data from the French stock exchange.
    Keywords: pandemic, business interruption, insurance, corporate risk management
    JEL: G11 G22 G32
    Date: 2020
  17. By: Denuit, Michel (Université catholique de Louvain, LIDAM/ISBA, Belgium); Robert, Christian Y.
    Abstract: Denuit (2019, 2020b) demonstrated that conditional mean risk sharing introduced by Denuit and Dhaene (2012) is the appropriate theoretical tool to share losses in collaborative P2P insurance schemes. Denuit and Robert (2020a,b,c) studied this risk sharing mechanism and established several attractive properties including linear approximations when total losses or the number of participants get large. It is also shown there that the conditional expectation defining the conditional mean risk sharing is asymptotically increasing in the total loss (under mild technical assumptions). This ensures that the risk exchange is Pareto-optimal and that all participants have an interest to keep total losses as small as possible. In this paper, we design a exible system where entry prices can be made attractive compared to the premium of a regular, commercial insurance contract. Participants can also be grouped according to some meaningful criterion, resulting in a hierarchical decomposition of the community. The particular case where realized losses are allocated in proportion of the pure premiums is studied. This applies to losses obeying infinitely divisible distributions, such as compound Poisson or compound Negative Binomial ones as long as severities are identically distributed. Also, participants can just opt for such a proportional mean risk sharing, for simplicity.
    Keywords: Peer-to-Peer (P2P) insurance ; conditional mean risk sharing ; size-biased transform ; comonotonicity
    Date: 2020–01–01
  18. By: Eleftherios Giovanis (Manchester Metropolitan University); Oznur Ozdamar (Izmir University Bakircay); Burcu Özdas (Adnan Menderes University)
    Abstract: Unemployment can negatively affect individuals, their families and communities in various ways. When individuals are out of work may experience mental and physical health problems, material deprivation and poverty. This study aims to examine the impact of unemployment benefits on health and living standards in Turkey. We employ a structural equation modelling (SEM) to take into account the simultaneous relations among the latent variables of health and Standard of Living (SoL). Additionally, we propose a fuzzy Regression Discontinuity Design (FRDD) within the SEM framework to infer for causality. For the empirical analysis we use the panel Income and Living Conditions Survey (ILCS) over the period 2007-2015. Our findings suggest that those who receive these benefits are more likely to report higher levels of health and improve their living standards compared to the non-recipients. Our results indicate a large heterogeneity on the impact of unemployment benefits, as males, low educated individuals and those belonging in the lower levels of income are affected more in terms of their health status and living standards. The majority of earlier studies have focused on the impact of unemployment benefits on labour outcomes. The originality of this study is that we implement the FRDD within the SEM framework to explore simultaneously the impact of unemployment insurance on heath and living standards. Moreover, this framework can be applied in future research studies to infer causality and explore the impact of policies and reforms.
    Date: 2020–12–20
  19. By: Denuit, Michel (Université catholique de Louvain, LIDAM/ISBA, Belgium); Robert, Christian Y.
    Abstract: This paper considers a peer-to-peer (P2P) insurance scheme where the higher layer is transferred to a (re-)insurer and retained losses are distributed among participants according to the conditional mean risk sharing rule proposed by Denuit and Dhaene (2012). The global retention level of the pool of participants grows proportionally with their number. We study the asymptotic behavior of the individual retention levels, as well as individual cash-backs and stop-loss premiums, as the number of participants increases. The probability that the total loss hits the upper layer protected by the stop-loss treaty is also considered. The results depend on the proportional rate of increase of the global retention level with the number of participants, as well as on the existence of the Esscher transform of the losses brought to the pool.
    Keywords: conditional expectation ; risk pooling ; comonotonicity ; Esscher transform ; regularly varying tails
    Date: 2020–01–01
  20. By: Cederlöf, Jonas (School of Economics, The University of Edinburgh,)
    Abstract: Previous studies estimating the effect of generosity of unemployment insurance (UI) on unemployment duration has found that as job seekers approach benefit exhaustion the probability of leaving unemployment increases sharply. Such “spikes” in the hazard rate has generally been interpreted as job seekers timing their employment to coincide with benefit exhaustion. Card, Chetty and Weber (2007b) argue that such spikes rather reflect flight out of the labor force as benefits run out. This paper revisits this debate by studying a 30 week UI benefit extension in Sweden and its effects on unemployment duration, duration on UI, as well as the timing of employment. As the UI extension is predicated upon a job seeker having a child below the age of 18 at the time of regular UI exhaustion this provides quasi-experimental variation which I exploit using a regression discontinuity design. I find that although increasing potential UI duration by 30 weeks increases actual take up by about 2.5 weeks, overall duration in unemployment and the probability of employment is largely unaffected. Moreover, I find no evidence of job seekers manipulating the hazard to employment such that it coincides with UI benefit exhaustion. This result is attributed to generous replacement rates offered in other assistance programs available to job seekers who exhaust their benefits.
    Keywords: Unemployment benefits; Unemployment duration; Hazard spike
    JEL: J64 J65
    Date: 2020–12–18
  21. By: International Monetary Fund
    Abstract: This technical note reviews the institutional arrangement and supervisory practices for the insurance and securities sectors in Malta, focusing on supervisory effectiveness. The legal powers and supervisory objectives of the Malta Financial Services Authority (MFSA) are clear and in line with international standards. The MFSA has adequate legal authority to discharge its supervisory responsibilities and to take the necessary preventive and corrective measures to protect the public interest. Clearly established legal gateways for information sharing facilitate supervisory coordination and cooperation between the MFSA and relevant supervisors/authorities, domestically and internationally. For the avoidance of doubt, the MFSA has proposed amending the MFSA Act to explicitly include the promotion of financial stability and financial market integrity as one of its key functions. Stable funding and full autonomy over the recruitment process are needed to support the MFSA’s operational and financial independence. Recognizing the scope for harmonizing and enhancing the current sectoral risk-based supervision frameworks (RBSF), the MFSA is developing an integrated RBSF.
    Keywords: Insurance companies;Insurance;Financial services;Financial sector stability;Financial regulation and supervision;ISCR,CR,business model,MFSA staff members,turnover rate,holding company,risk appetite
    Date: 2019–11–21

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