Abstract
The banking industry and the Comptroller of the Currency won three Supreme Court rulings allowing banks to sell annuities and other insurance products. Overall, bank stock prices have not changed significantly surrounding these rulings. However, these rulings significantly decreased insurance company stock prices. Life and health insurance companies and insurance agencies have the most negative reactions. Property-liability insurance companies have a less negative response. Insurance companies that sell via a brokerage system have the highest stock returns. The results are consistent with contestable market theory. Decreasing entry barriers reduces the economic rents of insurance companies and changes the competitive structure among insurance companies.
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