The aim of the article is to analyse the process of application of the Insurance Contract Law in Latvia in 2018 and to propose amendments to this law to eliminate the ambiguities and shortcomings ...therein. This article examines the development of insurance contract law in Latvia in the light of the entry into force of the renewed law regulating these contractual relations, the Insurance Contract Law, in 2018. The main methods used were analysis and synthesis, scientific induction and deduction, comparative method and observation. Analysing the problems in the practical application of the renewed law, the author concludes that prima facie the renewed law needs to be clarified in certain parts and proposes solutions.
The purpose of the research topic is to conduct an in-depth study of the issues related to integrity and its protection in insurance relations and to identify legal and practical problems that arise ...in non-compliance with this principle. Consequently, the goal of the topic is to analyze the mentioned problematic issues, highlight them, and subsequently propose potential solutions and recommendations for the benefit of readers.1 Integrity is the principle of civil turnover, therefore its solidity and stability depend on the integrity of the participants in civil turnover. “Integrity is not only a right but also an assumption of fulfilling a duty, because integrity implies the action of the participants of the civil turnover with consideration and responsibility, treating each other with respect for the rights”;2 Consequently, since the insurance contract is a type of civil contract, it is natural that the obligation to protect integrity is also essential in relation to it;3 Nonetheless, I believe that in the case of insurance, protection of integrity acquires an even wider meaning and implication. This is because the fundamental principle and core of insurance contracts is based on the supreme trust between the involved parties. Consequently, if the contracting parties fail to uphold the principle of integrity, it could cast doubt on the existence of the insurance.
This study aims to analyze the application of financial accounting standards namely PSAK 62 (2015) regarding insurance contracts and PSAK 28 (2012) regarding loss insurance accounting at PT Asuransi ...AXA Indonesia, considering that PT Asuransi AXA Indonesia only provides services in the field of loss insurance excluding life insurance. This study uses qualitative methods with content analysis. The data used in this study is sourced from the official website of the relevant company, the data used as a sample are the financial statements of PT Asuransi AXA Indonesia from 2011 up to 2017. The analysis of this research was conducted on the presentation and disclosure of the company's financial statements adjusted to the provisions of accounting standards and applicable regulations. The results of this study indicate that PT Asuransi AXA Indonesia has implemented the recognition, measurement and presentation of premium income, claims and acquisition costs applied by those in accordance with PSAK 28 (2012) as well as PSAK 62 (2015).
We consider a continuous-time model in which an insurer proposes an insurance contract to a potential insured. Motivated by climate change and catastrophic events, we assume that the number of claims ...process is a shot-noise Cox process. The insurer selects the premium to be paid by the potential insured and the amount to be paid for each claim. In addition, the insurer can request some actions from the potential insured to reduce the number of claims. The insurer wants to maximize his expected total utility, while the potential insured signs the contract if his expected total utility for signing the contract is greater than or equal to his expected total utility when he does not sign the contract. We obtain an analytical solution for the optimal premium, the optimal amount to be paid for each claim, and the optimal actions of the insured. This leads to interesting managerial insights.
Genetic discrimination (GD) is the differential or unfair profiling of an individual on the basis of genetic data. This article summarizes the actions of the Genetic Discrimination Observatory (GDO) ...in addressing GD and recent developments in GD since late 2020. It shows how GD can take many forms in today’s rapidly evolving society.
We propose an insurance contract under which the supplier shares the risk of overstock and understock with the retailer, improving the efficiency of the supply chain with a newsvendor-type product. ...We first show that the insurance contract could coordinate the supply chain, and obtain bargaining solution in the supply chain model. Then we investigate the effects of agents’ risk aversion on the supply chain model and acquire the Pareto-optimal solution through the mean–variance approach. After that, we compare the insurance contract with the revenue sharing contract, focusing particularly on their differences. Finally, extensive numerical studies are conducted, and managerial implications are proposed.
The purpose of this study is to determine an optimized stock insurance contract in Tehran Stock Exchange. First of all, based on a financial management problem, a risk management contract is designed ...to minimize the risk of loss that an agent might face. Then, with a mathematical modeling, we will see that to efficiently manage the stock risk, we need to make sure that only multi-layer contracts, or equivalently, European call options are correctly valued. Therefore, the optimized insurance contract is determined by correct pricing of European call options. Studying more deeply in this area by implementing the proposed algorithm on Tehran stock exchange shows that the optimized value of the insurance contract is a small percentage of the stock initial price; furthermore, it is also a function of the stock return fluctuation. Hence, the volatility and the price of insurance contract are positively correlated. In other words, the more a stock is volatile, the more expensive is an insurance contract.
•The paper creates a new contract with “No-claim Bonus and Coverage Upper Bound”•Analyze the welfare increase brought by the suppression of moral hazard.•A sufficient condition is given to describe ...the condition of application.•Two cases are used to demonstrate Pareto improvement of the new contract.
In this paper, an optimal insurance problem from the view of a risk-averse individual under moral hazard is considered. Based on the Principal-Agent theory, we introduce a combined incentive tool of “No-claim Bonus and Coverage Upper Bound” to encourage the insured to make a higher risk-reducing effort and obtain higher expected utility than in a basic contract. We confirm if marginal expected utility brought by the increase of risk-reducing effort decreases at the critical point of transition between two contracts, the combined incentive tool can restrain the moral hazard of the insured. Moreover, Pareto efficiency improvement of the tool is visually displayed by two case examples.
•We show how to increase the attractiveness of retirement products.•We solve a constrained and non-concave optimal asset allocation problem.•We analyze the impact of taxation on optimal asset ...allocation.•We show that our contract design yields a higher utility than asset investments.
We study a problem of non-concave utility maximization under a fair pricing constraint. The framework finds many applications in, for example, the optimal design of managerial compensation or equity-linked life insurance contracts. Deriving closed-form solutions, we observe that the fair pricing constraint will reduce the riskiness of the optimal strategies substantially. In an extensive numerical section, we analyze innovative retirement products that adapt the investment strategy of the premium pool according to the policyholder’s preferences, modeled as constant relative risk aversion (CRRA). Such products are a response to the loss of attractiveness of traditional life insurance contracts with guarantees that are negatively affected by increasing solvency requirements for return guarantees and a general decrease in interest rate levels. Taking into account that retirement products are usually tax-privileged, we find that fairly priced guarantee contracts that follow this optimal investment strategy lead to a higher expected utility level than asset investments.
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