Regulatory Competition in the US Life Insurance Industry

Johnny Tang

Journal of Political Economy, 2026, vol. 134, issue 10, 3032 - 3089

Abstract: I study competition between state regulators in the US life insurance industry. States compete for insurers by setting lower capital requirements, but the costs of such actions are partially borne by other states. I document states’ behaviors and insurers’ responses to this competition and its effects on life insurance supply. I develop a quantitative model of the insurance market that captures states’ competition and insurers’ responses. I find that competition leads regulators to set lower capital requirements, which increases default risks but increases consumer surplus by lowering prices. On net, competition between regulators decreases total surplus and redistributes across states.

Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1086/742725 (application/pdf)
http://dx.doi.org/10.1086/742725 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpolec:doi:10.1086/742725

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().