Risky Business: The Economics of Insurance Markets

Nov 04, 2005
B-339 Rayburn House Office Building

Featuring:

Dr. Catherine England
Chair of Accounting, Economics, and Finance
School of Business Administration, Marymount University 

Click Here for audio clip from archive.

Since the passage of the 1933 Banking Act – a reaction to events stemmed by the stock market crash of 1929 – the federal government has imposed numerous regulations on the financial services industry. From laws regulating bank activities, to rules governing securities exchange, to national standards established for the accounting industry, Congress has been very active in overseeing the financial sector. However, largely left untouched in this accumulation of regulations over the last 70 years is the insurance industry.

Outside of the creation of the National Flood Insurance Program, insurance has primarily been regulated at the state level. Due to recent events such as 9/11 and the need for Terrorism insurance, rapidly rising healthcare costs, and the massive devastation caused by Hurricane Katrina, many are now looking to extend the federal government’s role in this industry.

In order to help policymakers evaluate the current alternative proposals and arguments, the Mercatus Center at George Mason University is sponsoring a seminar to address these issues and examine the economics of insurance. Key questions to be addressed include:

  • What do the lessons of economics teach us about the most effective government role in insurance markets?
  • What is it that private insurance can, and cannot, do?
  • What are the important differences and similarities of the diverse segments of the insurance industry?
  • How might increased government involvement in the industry alter the way in which it operates?

Seminar participants will leave with a framework for understanding the dynamics of insurance markets and a greater ability to evaluate policy options currently under consideration.