Affiliated reinsurance and insurer performance under capital regulation

Minli Yi, Yang Yang and Jyh-Horng Lin

Finance Research Letters, 2021, vol. 39, issue C

Abstract: The paper develops a two-stage framework that an operating insurer purchases reinsurance from its affiliated reinsurer within the holding company under capital regulation. Stringent capital regulation to the operating insurer harms its affiliate's survival but helps the operating insurer's survival, the holding company's survival, and policyholder protection. Stringent capital regulation to the affiliate increases its optimal affiliated reinsurance and the policyholder protection, thereby contributing to insurance stability.

Keywords: Affiliated reinsurance; Capital regulation; Policyholder protection (search for similar items in EconPapers)
JEL-codes: G21 G22 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:39:y:2021:i:c:s1544612319310918

DOI: 10.1016/j.frl.2020.101584

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