Premium Contracts Research Articles

상가권리금계약서 작성 권한에 대한 고찰

As to whether it is a violation of the “Licensed Administrative Agent ACT” for a licensed real estate agent to prepare a commercial rights contract, the Suwon District Court's Seongnam Branch sentenced on November 11, 2022 Godan 577 stipulates as follows. ① Preparing a consulting contract for the transfer of daycare centers corresponds to a premium contract, and preparing a premium contract corresponds to a “document on rights obligations or proof of facts,” which violates the Licensed Administrative Agent ACT. ② The act of mediating a premium contract and preparing a premium contract does not constitute an intermediary act stipulated in the Licensed Real Estate Agents ACT, so the act of mediating a premium contract and preparing a premium contract violates the Licensed Administrative Agent ACT. ③ If the premium contract and the lease transfer contract are inseparable, it is difficult to conclude that both contracts are inseparable from one contract. ④ These Defendants' actions do not constitute a mistake in the law. However, a premium contract is a contract that must be accompanied by a lease contract, is inseparable from a lease contract, and is effective only when both the premium contract and the lease contract are fulfilled, and the other contract is canceled, invalid, or canceled. Therefore, considering that the preparation of premium contracts is one of the tasks of many licensed real estate agents accompanying lease contracts, premium should be recognized as an object of brokerage, and to clarify this, the Enforcement Decree of the Certified Real Estate Agents Act needs to be revised.

Registration of ‘S16‐14801C’: A high‐yielding determinate maturity group V soybean cultivar with multiple disease resistance, salt tolerance, and broad adaptation

AbstractThe demand for non–genetically modified soybean [Glycine max (L.) Merr.] cultivars has steadily increased in the last decade due to changes in consumers’ preferences and the growth of specialty niche markets. To meet this growing demand, the University of Missouri–Fisher Delta Research, Extension, and Education Center soybean breeding program has developed and released ‘S16‐14801C’ (Reg. no. CV‐553, PI 699901). It is a high‐yielding determinate maturity group 5 early (relative maturity 5.0) conventional soybean cultivar with resistance to multiple diseases, including soybean cyst nematode races 2 (HG type 1.2.5.7) and 5 (HG Type 2.5.7), southern root‐knot nematode, reniform nematode, stem canker, and salt tolerance. S16‐14801C was tested in a total of 111 environments across 12 states from 2017 to 2021, outyielding the commercial checks (on average) of similar maturity in 75 environments. Given its high‐yielding performance, multiple disease resistance package, and wide adaptability, S16‐14801C represents a good cultivar choice for soybean growers across the U.S. southern states, especially for crop systems targeting premium contracts associated with specialty markets.

Optimal Capacity Rationing Policy for a Container Leasing System with Multiple Kinds of Customers and Substitutable Containers

In this paper, we consider a container leasing firm that has elementary and premium containers, which are downward substitutable and for use by elementary contract customers (ECCs), premium contract customers (PCCs), as well as walk-in customers (WICs). ECCs can be satisfied by elementary containers or premium ones at discounted prices while PCCs only accept premium containers. WICs can be satisfied by any type of container at different prices. The objective is to maximise the expected total rental revenue by managing its limited capacity. We formulate this problem as a discrete-time Markov Decision Process and show the submodularity and concavity of the value function. Based on this, we show that the optimal policy can be characterised by a series of rationing thresholds, a series of substitution thresholds and a priority threshold, all of which depend on the system states. We further give conditions under which the optimal policy can be simplified. Numerical experiments are conducted to show the impact of the substitution of two items on the revenue, to compare the performance of the optimal policy with those of the commonly used policies and to investigate the influence of arrival rates on the optimal policy. Last, we extend the basic model to consider different rental durations, ECCs’ acceptance behaviour and endogenous prices for WICs. This paper was accepted by Jayashankar Swaminathan, operations management. Funding: This work was supported by National Natural Science Foundation of China/Research Grants Council of Hong Kong Joint Research Scheme [Grant 71661167009, N_PolyU531/16], National Natural Science Foundation of China [Grants 72171016, 71831001], and British Academy\Leverhulme Small Research [Grant SRG19\190059]. This work was also supported by Zhejiang Shuren University Research [Grant KXJ0121605] and Beijing Logistics Informatics Research Base. Supplemental Material: The e-companion and data files are available at https://doi.org/10.1287/mnsc.2022.4425 .

A study on protection of a tenant

주택임대차보호법과 상가건물임대차보호법은 임차인을 보호하기 위한 목적으로 제정된 법률이나, 현행법 하에서도 임차인을 보호하기에 부족한 법적 공백이 존재한다. 먼저, 주택임대차보호법은 상가건물임대차보호법이 임차인에게 계약갱신요구권을 인정하고 있는 것과 달리 묵시적 갱신만을 인정하고 있다. 두 번째로, 상가건물임대차보호법은 제10조의 4조 제1항에서 임차인의 권리금 회수기회를 보호하고 있으나, 문리적 해석에 따르면 임대차가 종료한 이후에는 임차인의 권리금 회수기회를 방해 할 수 있다고 해석되어 임차인 보호에 관한 공백이 발생한다. 이러한 현행법상의 문제점을 해결하고 임차인을 보호하기 위하여 본 논문에서는 미국의 이론들과 판례들을 검토하고 동 이론 및 판례들이 우리나라 법원 판결에 서 임차인 보호의 해석을 위하여 적용 될 수 있는지 여부를 검토하고자 한다. 구체적으로는 주택 임대인이 “신의성실의 원칙” 또는 “계약해제 시 정당한 사유”라는 요건이 인정되는 경우에만 계약갱신의 거절을 인정하는 미국의 사례를 우리나라 법원의 법 해석 시 참고 가능하다고 보았다. 상가건물임대차보호법에서는 “임대인의 동의 없는 임차인의 무단 전차계약”에 관한 미국판례의 입장변화를 살펴본 후 프랜차이즈 계약에서 계약일방이 임의로 계약을 해제하는 경우 신의성실에 원칙에 따라 계약해제의 효력이 부정되는 사안을 살펴보았다. 이를 통하여 임차인이 권리금계약을 체결하려고 노력하였으나 계약기간이 종료된 후에야 새 임차인과 임대인 간 계약이 체결된 경우 동 계약의 효력이 임차인에게 귀속되어 임차인이 권리금회수기회를 갖게 된다거나 임대인에게 권리금 발생에 책임이 있는 경우에는 계약기간이 종료된 후에도 임차인이 권리금을 손해배상 청구와 유사한 성격으로 임대인에게 청구할 수 있다는 해석이 타당하다고 보았다. 다만, 임차인이 임대차계약 종료 후 권리금을 청구할 수 있는 기간은 법으로 합리적인 기간을 정하여 제한하는 것이 바람직할 것이다.Korean Housing Lease Protecting Act and Korea Commercial Building Lease Protection Act are the Acts to protect the tenant in Korea. However, there are gaps which cannot protect the tenants in these Acts. Firstly, the Housing Lease Protect Act has only implied renewal. Whereas a lessor shall not refuse to renew without justifiable grounds within 5 years if a tenant requests for renewal of a contract in the Commercial Building Protection Act. Secondly, the Commercial Building Protection Act protects the tenant’s right to receive a premium from new tenant. However, the lessor can obstruct any tenant in receiving any premium pursuant to a premium contract from a new tenant after termination of the lease agreement under the literal meaning of 10-4(1). To protect the tenant’s right to remain under the present Act, the doctrines of common law can be referred when the court makes a decision. To be specific, when the lessor refuses to renew the lease agreement for house to increase the rent fee, it will be unreasonable by applying the “implied covenant of good faith and fair dealing”. If the tenant of house who follows the terms and conditions of lease agreement wants to maintain the agreement and his or her claiming the occupancy is not unreasonable under circumstances of agreement, the lessor cannot evict the tenant without good cause by the “implied covenant of good cause for termination”. In the commercial building agreement, the court can interpret the tenant has right to claim the premium even after termination of agreement when the reasonableness can be recognized. For example, when the tenant had made substantial investment or the lessor has any responsibility for the tenant’s investment on getting or expanding premium, the tenant can receive the premium from new tenant who make a premium contract after agreement or lessor as a compensation for damage. Provided that the period the tenant can claim the premium from new tenant after termination should be limited within reasonable time. The reasonable time can be regulated by making or adding new Act or articles.

Valuation of the surrender option in equity-linked life insurance contracts

In this paper, we consider the surrender option, a specific embedded option in unit-linked life insurance contracts that gives the insured the right to terminate early the contract before maturity and receive a cash amount called surrender value. We use the no arbitrage approach to value the surrender option, seen as an US option. The valuation is based on the Cox et al. (1979) binomial model. The aim of this contribution is to expose the methodological approach in the particular case of the single premium contract, with focus on the surrender option valuation and to allow the exploitation of this intuitive and flexible method in order to deal with more realistic and complex valuation frameworks.

Contracting emission reduction for supply chains considering market low-carbon preference

Under the low-carbon environment, we focus on a dyadic supply chain with a manufacturer and a retailer to develop a game model for studying the issues of carbon emission reduction within the retailer dominant and the power balanced cases, respectively. The consumers are assumed to be of environmental consciousness and accordingly will note the carbon footprint of product when shopping. We find that with the cost-sharing and the wholesale price premium contracts, the retailer can achieve the goal of jointly reducing carbon emissions with the manufacturer, which can promote the manufacturer to increase the carbon emission reduction rate and raise the profit of supply chain. In both the retailer dominant case and the power balance case, the cost-sharing contract can result in Pareto improvement in the performance of both the manufacturer and the retailer. However, the wholesale price premium contract can increase the profit of the supply chain only when the level of low carbon preference is high in the retailer dominant case, and it can also represent a Pareto improvement for the supply chain even if when the level of low carbon preference is low in the power balanced case.

Dual sourcing for mitigating humanitarian supply chain disruptions

Purpose – Proactive planning strategies for “slow-onset” disruptions that affect humanitarian supply chains (SC) developed to address chronic pressing societal problems, can have a significant impact on boosting the operational and financial performance of these chains. The purpose of this paper is to develop a methodology that quantifies the impact of a risk mitigation strategy widely employed in commercial SCs, namely emergency sourcing (ES), on the performance of humanitarian SCs taking into account backorders’ clearance time, unsatisfied demand, and cost. Design/methodology/approach – Discrete event simulation is employed in order to evaluate alternative ES strategies based on a total cost criterion, which incorporates inventory-related costs, as well as premium contract costs paid for emergency replenishment. Backorders’ clearance time and time-to-recovery are also employed as a design parameters. Findings – The results document the significant impact of disruptions on expected total cost, and the beneficial role of ES in hedging against disruptions. To that end, the proposed methodology determines the optimal emergency contracted capacity for a given premium, or alternatively the maximum premium cost value that ensures the feasibility of the implemented ES strategy in the long-run, along with the associated cost and time savings, and reduction of the unsatisfied demand. Originality/value – The fundamental objective is to provide a decision-making support methodology for deciding on whether to implement an ES strategy or not in humanitarian SCs, and the level of the optimal contracted reserved capacity. The results could be of great value to aid providers, policy-makers, and regulators.

Valuation of finance/insurance contracts: Efficient hedging and stochastic interest rates modeling

This paper studies the problem of hedging equity-linked life insurance contracts with efficient hedging technique in stochastic interest economy. In our setting, the payoff of life insurance contracts is based on two risky assets, where the return processes are driven by different correlated Wiener processes. The stochastic interest rate is assumed to follow the Heath-Jarrow- Morton framework. We obtain explicit formulas for both the price of a single premium contract and the corresponding survival probability. Moreover, a numerical example illustrates how this efficient hedging technique is applied to manage the balance between financial and insurance risks for a risk-taking insurance company.

Efficient hedging for equity-linked life insurance contracts with stochastic interest rate

This paper studies the problem of valuation equity-linked life insurance contracts with efficient hedging technique in a stochastic interest environment. In our setting, the payoff of such contracts is based on two risky assets governed by the Black-Scholes models: one is responsible for future gains, the other one is a stochastic guarantee. The behaviour of the stochastic interest rate is described by the Heath-Jarrow-Morton model. Explicit formulas for both the price of a single premium contract and the survival probability were derived respectively. A numerical example illustrates how a risk-taking insurance company may apply this efficient hedging technique to manage the balance between financial and insurance risks.

Optimal annuity planning and longevity risk: evidence from Korea

This study examines annuity planning using an optimization framework. An optimization problem is formulated with the objective of maximizing the lifetime utility of consumption and bequestable wealth, and benchmark cases for Korean households are applied. We extend the optimization model suggested in Gupta and Li (2007) by incorporating realistic constraints, such as installment premium contracts, deferred annuity payments and the possibility of borrowing. Further, we have considered a variety of longevity cases. The results confirmed that an annuity is an effective tool for managing longevity risk, and annuitization timing is crucial for the maximization of lifetime utility.

Separate and Unequal

article in this Special Theme Issue of Medical Care by Naessens et al1 is of particular interest to a health economist, because it provides a confirmation, under almost laboratory conditions, of important theoretical results from more than 30 years ago. Choice of insurance coverage (all else equal) leads people to self-select into more and less high-risk groups. Greater choice thus has the effect of placing a greater financial burden on those at higher risk the elderly and the chronically ill. The theory works, and has immediate relevance to present-day health policy. In 1970, Akerlof s classic Lemons paper2 explored the dynamics of markets with asymmetric information. In the extreme case, transactors on one side of an exchange might have complete information about the relevant characteristics of a given product (sellers of used cars, buyers of individual health insurance contracts) whereas those on the other side might know only the average characteristics of used cars offered for sale, or the average risk status of would-be insurance purchasers. Sellers of higher quality cars would then be offered too low a price for their cars; low risk buyers would be overcharged for their coverage. If the highest quality used cars and the lowest risk buyers should respond by leaving the market, this would lower the average quality of cars for sale and raise the average risk of those with health insurance. Depending upon the relative numbers and risks, this could set off a chain reaction such that more higher quality cars and lower risk people leave. The market could go into a death spiral and completely disappear. Rothschild and Stiglitz,3 however, demonstrated that even when sellers of health insurance contracts do not know the risk status of individual purchasers, they could induce (rational, fully-informed, self-interested, and risk-averse) buyers to reveal their status by offering multiple contracts with differing premiums and levels of coverage. Their demonstration model includes high-risk and low-risk buyers. If 2 different contracts are offered, low-risk buyers will choose the lower premiums and less comprehensive coverage more potential user charges while high-risk people will pay more for more comprehensive coverage. As they did at Mayo. In the real world of Naessens et al, the separation is of course not complete. But the higher-risk employees are clearly self-selecting into the higherbenefit, higher-premium pool, and conversely the theory works. (Akerlof and Stiglitz shared the 2001 Nobel Prize in Economics with Michael Spence for their work on the economics of imperfect information.) It should be noted, indeed emphasized, however, that this separation process has significant distributional effects relative to the single premium contract. Income is transferred from the less to the more healthy members of the insured population, in 2 distinct ways. (There is also a transfer from employees to the employer, insofar as the increases in premiums and user charges permit lowering the employer's contribution.) Low-risk buyers gain because their premiums no longer have to cover part of the costs of high-risk people. And the latter correspondingly pay more for whatever coverage they buy. But in addition, because self-selection is motivated by increased user charges on

Amazing discovery: Vincenz Bronzin’s option pricing models

In 1908, Vinzenz Bronzin, a professor of mathematics at the Accademia di Commercio e Nautica in Trieste, published a booklet in German entitled Theorie der Prämiengeschäfte (Theory of Premium Contracts) which is an old type of option contract. Almost like Bachelier’s now famous dissertation (1900) [Bachelier, Louis, 1900, 1964. Théorie de la speculation, Annales Scientifiques de l’ Ecole Normale Supérieure, Paris, Ser. 3, 17, pp. 21–88. (English translation in: The random character of stock market prices (Ed. Paul Cootner), MIT-Press (1964), pp. 17–79)], the work seems to have been forgotten shortly after it was published. However, almost every element of modern option pricing can be found in Bronzin’s book. In particular, he uses the normal distribution to derive a pricing equation which comes surprisingly close to the Black–Scholes–Merton formula.

Endogenous model of surrender conditions in equity-linked life insurance

We propose a model for pricing a unit-linked life insurance policy embedding a surrender option. We consider both single and annual premium contracts. First we analyse a quite general contract, for which we obtain a backward recursive valuation formula based on the Cox et al. [Cox, J.C., Ross, S.A., Rubinstein, M., 1979. Option pricing: a simplified approach. J. Finan. Econ. 7, 229–263] binomial model. Then we concentrate upon a particular case, that is the famous model with exogenous minimum guarantees. In this case we extend our previous analysis in order to take into account the possibility that the guarantees at death or maturity and the surrender values are endogenously determined, and provide necessary and sufficient conditions for the premiums to be well defined.

Implied Volatilities and Arbitrage Opportunities in the Italian Options Market

This paper, which follows up the analyses of an earlier study published in December 1988, starts by updating the description of the regulatory framework for Italian stock options (premium contracts), with reference both to the regulations issued by the Consob (the Italian SEC) and the changes in tax law. This is followed by figures on the size of the market and its development in recent years. After describing the standards operators use to value premium contracts and quantifying the deviations from the theoretical values, we examine the techniques for forecasting share price volatilities and verify the information content of the implied volatilities of premium contracts. The last part of the paper describes an extensive simulation designed to reveal arbitrage opportunities that operators failed to exploit during the period in question, with account being taken of transaction costs.

The Italian Market for 'Premium' Contracts: An Application of Option Pricing Theory

Despite their growing importance on Italian stock exchanges, premium contracts have not received very much attention in analytical studies. This paper starts with a description of the working of the market for premium contracts with the aim of highlighting its institutional peculiarities compared with foreign markets for stock options and then develops a formula for the determination of premia based on arbitrage methods similar to those used in option pricing theory. The empirical test of the correspondence between actual market premia and the theoretical values obtained provides some indication of the scope for arbitrage between premium and forward contracts, and hence of the efficiency of Italian stock exchange markets.

Design and Pricing of Equity‐Linked Life Insurance under Stochastic Interest Rates

The authors present a model that incorporates stochastic interest rates to value equity‐linked life insurance contracts. The model generalizes some previous pricing results of Arne and Persson [1994] that are based on deterministic interest rates. The article also proposes and compares a design for a new equity‐linked product with the periodical premium contract of Brennan and Schwartz [1976]. The advantages of the proposed prod‐uct are its simplicity in pricing and its ease of hedging, by using either by long positions in the linked mutual fund or by European call options on the same fund.

An Experiment on Rational Insurance Decisions

We describe the results of an experiment on decision making in an insurance context. The experiment was designed to test for the underlying rationality of insurance consumers, where rationality is understood in usual economic terms. In particular, using expected utility as the preference function, we test for positive marginal utility, risk aversion, and decreasing absolute risk aversion, all of which are normal postulates for any microeconomic decision context under uncertainty or risk. We find that there the discrepancy from rational decision making increases with the sophistication of the rationality criteria, that irrationality concerning fair premium contracts is uncharacteristically high, and that the slope of absolute risk aversion seems to depend on the format of the insurance contract.

Design and Pricing of Equity-Linked Life Insurance Under Stochastic Interest Rates

A valuation model for equity-linked life insurance contracts incorporating stochastic interest rates is presented. Our model generalizes some previous pricing results of Aase and Persson (1994) and Ekern and Persson (1996), based on deterministic interest rates. Moreover, a design of a new equity-linked product with some appealing features is proposed and compared with the periodical premium contract of Brennan and Schwartz (1976). Our new product is very simple to price and may easily be hedged either by long positions in the mutual fund of linkage or by European call options on the same fund.

The Design of Insurance Contracts When Liability Rules Are Unstable

The Design of Insurance Contracts When Liability Rules are Unstable ABSTRACT Recent troubles in liability insurance markets have been associated with a destabilization of liability rules. A nautral policy response is seen in proposals for legislative reform of liability rules with the aim of increased stability. An alternative track explored here examines the design of insurance contracts. The effects of judicial and legislative process on the insurance pooling function are examined in a rational expectations setting. It is then shown that the conditions for closure of policies characterized as premium are weaker than for traditional contracts given instability of liability rules. Finally, it is shown that the insurance market has responded to recent crises by organizational and contractual innovations that embody the random premium design. These responses include the emergence of mutual like forms of organization and the policy. Baruch Berliner, 1982, outlined the ideal conditions for the functioning of an insurance market. Amongst other conditions is a requirement that there be a large number of independent loss exposures. This condition ensures the operation of the Central Limit Theorem and the insurer's risk will essentially be diversified away. Failure to satisfy this condition appears to be at the heart of many of the recent troubles in liability insurance markets. For example, the recent liability insurance crisis in the United States appears to be a response to a destabilization of the legal system.(1) Insurers argue that they are able to insure the liabilities of clients arising under an unchanging set of liability rules, but they cannot insure against changes in the rules themselves. Liability insurance markets have responded with different designs of insurance or risk bearing contracts and with changes in the forms of organizations that bear risk. For example, liability insurers have introduced the so called contract which, in effect, shortens the period over which changes in the level of expected loss may commonly affect all outstanding policies. A more dramatic change has been the shift from stock forms of insurance organization to mutuals, group captives, industry pools and reciprocals. These structures share the risk among a group of firms (or individuals) commonly exposed. Equity in the structure is held by the policyholders. Such structures are referred to in the current article as mutuals. These changes in contract or organizational design have a similar effect. The premium for any given period of cover is random. It is subject to retroactive adjustment on the basis of new information concerning the aggregate loss in the pool. For example, the mutual may pay a dividend (positive or negative) to its policyholders which is related to the aggregate loss in the pool. The policy holder buying a claims made policy will find that losses which may have arisen, but which have not been presented as claims, within the policy year will be priced in the future in a future insurance contract. The policyholder does not know how much he or she will have to pay to insure this year's liabilities. The premium is, in effect, random. The next section of the article describes how correlations arising both from the incidence of losses and the generation of new information can lead to undiversified insurance portfolios. This section also shows how judicial and legislative processes can lead to such problems. A subsequent section presents a formal analysis of optimal insurance purchase with random premiums showing the conditions under which random premium contracts are preferred. The final section addresses the contractual and organizational innovations which have emerged in theses troubled markets. The insurance markets described are mainly for corporate insurance buyers. …

The Italian market for ‘premium’ contracts: An application of option pricing theory

Despite their growing importance on Italian stock exchanges, premium contracts have not received very much attention in analytical studies. This paper starts with a description of the working of the market for premium contracts with the aim of highlighting its institutional peculiarities compared with foreign markets for stock options and then develops a formula for the determination of premia based on arbitrage methods similar to those used in option pricing theory. The empirical test of the correspondence between actual market premia and the theoretical values obtained provides some indication of the scope for arbitrage between premium and forward contracts, and hence of the efficiency of Italian stock exchange markets.