The Allocation of Governmental Regulatory Authority: Federalism and the Case of Insurance Regulation
We investigate the incentives states have to provide insurance regulatory services in an efficient manner. Regulation of the insurance industry in the United States is unique, as it is conducted primarily at the state level whereas the majority of insurance sales are interstate. Consistent with pred...
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| Veröffentlicht in: | The Journal of risk and insurance 2007-03, Vol.74 (1), p.207-238 |
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| container_title | The Journal of risk and insurance |
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| creator | Grace, Martin F. Phillips, Richard D. |
| description | We investigate the incentives states have to provide insurance regulatory services in an efficient manner. Regulation of the insurance industry in the United States is unique, as it is conducted primarily at the state level whereas the majority of insurance sales are interstate. Consistent with predictions from the federalism literature, we find evidence of trans-state externalities, as states with small domestic insurance markets are less efficient producers of insurance regulation and appear to allow states that choose to expend the greatest resources to regulate for them. In addition, states with more profitable domestic insurers are shown to export greater levels of regulation, suggesting extraterritorial regulation may erect modest barriers to entry. We find evidence of increasing economies of scale in the production of insurance regulation after controlling for these regulatory externalities. |
| doi_str_mv | 10.1111/j.1539-6975.2007.00208.x |
| format | Article |
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Regulation of the insurance industry in the United States is unique, as it is conducted primarily at the state level whereas the majority of insurance sales are interstate. Consistent with predictions from the federalism literature, we find evidence of trans-state externalities, as states with small domestic insurance markets are less efficient producers of insurance regulation and appear to allow states that choose to expend the greatest resources to regulate for them. In addition, states with more profitable domestic insurers are shown to export greater levels of regulation, suggesting extraterritorial regulation may erect modest barriers to entry. 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| ispartof | The Journal of risk and insurance, 2007-03, Vol.74 (1), p.207-238 |
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| language | eng |
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| source | RePEc; Wiley Online Library Journals Frontfile Complete; Business Source Complete; JSTOR Archive Collection A-Z Listing |
| subjects | Brokers Business consultants Consumer protection Corporations Cost control Cost estimates Cost functions Costs Economic regulation Economies of scale Efficiency Employee incentives Employee insurance Excess & surplus lines Federalism Financial services Guaranty funds Hypotheses Industrial regulation Insurance industry Insurance policies Insurance premiums Insurance providers Insurance regulation Intrastate commerce Jurisdiction Licensing, certification and accreditation Life insurance Medical care, Cost of Medical law Political activity Political aspects Professional workers Property and casualty insurance Property and casualty insurance industry Public sector State government State regulation Statistical analysis Studies |
| title | The Allocation of Governmental Regulatory Authority: Federalism and the Case of Insurance Regulation |
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