Principle Of Indemnity Research Articles

Variance insurance contracts

We study the design of an optimal insurance contract in which the insured maximizes her expected utility and the insurer limits the variance of his risk exposure while maintaining the principle of indemnity and charging the premium according to the expected value principle. We derive the optimal policy semi-analytically, which is coinsurance above a deductible when the variance bound is binding. This policy automatically satisfies the incentive-compatible condition, which is crucial to rule out ex post moral hazard. We also find that the deductible is absent if and only if the contract pricing is actuarially fair. Focusing on the actuarially fair case, we carry out comparative statics on the effects of the insured's initial wealth and the variance bound on insurance demand. Our results indicate that the expected coverage is always larger for a wealthier insured, implying that the underlying insurance is a normal good, which supports certain recent empirical findings. Moreover, as the variance constraint tightens, the prudent insured cedes less losses, while the insurer is exposed to less tail risk.

The Principle of Indemnity and Insurance Subrogation－Centered on Medical Expense Insurance

The Principle of Indemnity and Insurance Subrogation－Centered on Medical Expense Insurance

Application Of The Utmost Good Faith Principle In Life Insurance Business Management In Indonesia

The study focused on the purpose of this writing is to find out the application of the principle of utmost good faith in life insurance. The research method used in this study is to use data collection methods in library research or library research. In this literature study the author obtains the materials and library materials needed by studying books, writings, journal citations and statutory and legal products that are related to the subject matter according to topics in Indonesia so that it can be concluded that: first, legal principles in insurance coverage include insurable interest, utmost good faith, indemnity principle, subrogation principle, causaliteit principle, contribution principle, cause principle, follow of fortune. Second, the types of risk in insurance are pure and speculative risk, diversifiable and non-diversifiable risk, company risk, systemic risk, financial and non-financial risk, individual and group risk, static and dynamic risk. Third, the application of the principle of utmost good faith in life insurance is very important, because if there is submission of information and information that is incorrect, it can result in the insurance agreement being cancelle.

Cyber Risk Insurance – An Effective Risk Management Tool for SMES in the UK?

This article aims to analyse to what extent small and medium sized businesses (SMEs) in the United Kingdom (England, Scotland, Wales and Northern Ireland) utilise cyber risk insurance as a risk mitigation tool in their cyber security management systems. To this end, the authors, by adopting a systematic qualitative analysis, elaborate the nature and scope of cyber risk insurance products on offer for SMEs (the supply side of the cyber insurance market). They then by utilising the data obtained from SMEs randomly but purposively, attempt to gain an understanding of the attitude of SMEs to cyber security generally and to cyber risk insurance. The main conclusion of the article is that the insurance market should consider developing a new cyber risk insurance product that aligns cyber security closely with the principle of indemnity. It is discussed in the article how such a product will enhance SMEs’ cyber security resilience (hence providing a social benefit for the society) and at the same time afford new opportunities for insurance providers to expand the size of their business and variety of their products.

STUDI KOMPARATIF TERHADAP PRINSIP-PRINSIP ASURANSI SYARIAH MENURUT HUKUM ISLAM DAN UNDANG-UNDANG NO. 40 TAHUN 2014 TENTANG PERASURANSIAN

This research is entitled a comparative study of the principles of sharia insurance according to Islamic law and Law No. 40 of 2014 concerning insurance. In its operations, in addition to complying with the legal terms of the agreement, insurance must also comply with the principles of insurance law. The purpose of these principles is to provide a framework within which all parties to a transaction will receive fair and proper treatment. This study aims to discuss the principles of insurance law in Islam and the principles of insurance in Law No. 40 of 2014 concerning insurance by conducting a comparative study which is expected to find similarities and differences. The research method used by the author is using descriptive analysis and comparative research, the data collection technique used is library research. The results of this study there are six principles of sharia insurance in Islamic law, namely; the Principle of Insurable Interest, the Principle of Utmost Good Faith, the Principle of Indemnity, the Principle of Subrogation, the Principle of Proximate Cause, and the Principle of Contribution. While the principles of sharia insurance contained in Law No. 40 of 2014 is the application of sharia principles in accordance with the DSN MUI fatwa, then regarding legal relations in insurance agreements that take provisions from KHES, and legal consequences in insurance which in case of disputes are resolved through mediation.

ANALISIS YURIDIS TERHADAP PENERAPAN PRINSIP INDEMNITY DAN INSURABLE INTEREST PADA ASURANSI KEBAKARAN DI PT. ASURANSI TOKIO MARINE

Fire Insurance protects against the danger of property loss or damage. Parties with an interest in the insured object accept the risk of loss. Indemnity (or the principle of loss) plays a role in ensuring equitable compensation. Subrogation will apply against the insured to ensure that the insurance policy runs properly and without loss between the insurer and the insured. The goal of this study is to discuss and explain the Indemnity Principles and Insurable Interest in relation with Fire Insurance. The descriptive qualitative method was employed in the research. Primary and secondary sources of data were gathered. Data analysis techniques included data collection, data reduction, data presentation, and data verification. The study's findings show that PT. Tokio Marine merely recovers the insured's financial condition to its pre-incident state. PT. Tokio Marine will not face risk adjustments as a result of an occurrence because the company only accepts risks that are uncertain and occur suddenly. Subrogation does not occur when the insurer pays the insured a balanced loss (indemnity principle). However, if the insurance covers only a portion of the loss, the subrogation principle applies.

Regret-based optimal insurance design

In this paper, we investigate an optimal insurance design problem in which the insured's risk preference is of the regret-theoretical expected utility type and admissible insurance contracts are set to satisfy both the principle of indemnity and the incentive-compatible condition. When the insurance premium is calculated by the expected value principle, we show that the optimal solution for a regret-averse insured can be in the form of no insurance or partial insurance above a deductible. We obtain a necessary and sufficient condition for the optimality of no insurance and provide a numerical algorithm to derive the optimal partial insurance above a deductible. Notably, the deductible disappears if and only if the insurance premium is actuarially fair. Finally, we carry out a comparative statics analysis to examine the effect of the insured's regret coefficient on the insured's final wealth and insurance demand. When the insurance pricing is actuarially fair, we find that the increase of the regret coefficient incentivizes the insured to purchase less insurance coverage and leads to an increase in risk of the insured's final wealth. However, our numerical analysis indicates that this finding is not always true for unfair insurance pricing.

OPTIMAL INCENTIVE-COMPATIBLE INSURANCE WITH BACKGROUND RISK

ABSTRACTIn this paper, the optimal insurance design is studied from the perspective of an insured, who faces an insurable risk and a background risk. For the reduction of ex post moral hazard, alternative insurance contracts are asked to satisfy the principle of indemnity and the incentive-compatible condition. As in the literature, it is assumed that the insurer calculates the insurance premium solely on the basis of the expected indemnity. When the insured has a general mean-variance preference, an explicit form of optimal insurance is derived explicitly. It is found that the stochastic dependence between the background risk and the insurable risk plays a critical role in the insured’s risk transfer decision. In addition, the optimal insurance policy can often change significantly once the incentive-compatible constraint is removed.

Pareto-Optimal Reinsurance Policies under TrTVaR Risk Measure

In this paper, we consider the problem of optimal reinsurance design, when the risk is measured by TrTVaR risk measure. We study optimal reinsurance models from the perspectives of both insurers and reinsurers. To reduce ex-post moral hazard, we assume that reinsurance contracts satisfy the principle of indemnity and the incentive-compatible constraint. When the losses of an insurer and a reinsurer are both measured by TrTVaR risk measures, we obtain the explicit forms of the Pareto-optimal reinsurance contracts under the expected value premium principle and TVaR premium principle, respectively.

Pareto-Optimal Reinsurance Revisited: A Two-Stage Optimisation Procedure Approach

In this paper, based on the Tail-Value-at-Risk (TVaR) measure, we revisit the Pareto-optimal reinsurance policies for the insurer and the reinsurer via a two-stage optimisation procedure. To reduce ex-post moral hazard, we assume that reinsurance contracts satisfy the principle of indemnity and the incentive compatible constraint which have been advocated by Huberman et al. (1983). We show that the Pareto-optimal reinsurance policy exists if the reinsurance premiums can be expressed as an integral form. The proposed class of premium principles encompasses the net premium principle, expected value premium principle, TVaR premium principle, generalized percentile premium principle, and so on. We further use the TVaR premium principle and the expected value premium principle as examples to illustrate the two-stage optimisation procedure by deriving explicitly the Pareto-optimal reinsurance policies. We extend the results by Cai et al. (2017) when the expected value premium principle is replaced by the TVaR premium principle.

Optimal insurance with background risk: An analysis of general dependence structures

In this paper, we consider an optimal insurance problem from the perspective of a risk-averse individual who faces an insurable risk as well as some background risk and wants to maximise the expected utility of his/her final wealth. To reduce ex post moral hazard, we follow Huberman et al. (Bell J. Econ. 14:415–426 1983) to assume that alternative insurance contracts satisfy the principle of indemnity and the no-sabotage condition. When the insurance premium is calculated by the expected value premium principle, a necessary and sufficient condition for the optimality of an insurance contract is established under a general dependence structure between insurable and background risks. By virtue of this condition, some qualitative properties of optimal contracts are developed, a scheme is provided to improve any suboptimal insurance strategy, and optimal insurance forms are derived explicitly for some dependence structures of interest. These forms are not always piecewise linear.

Optimal insurance with belief heterogeneity and incentive compatibility

People may evaluate risk differently in the insurance market. Motivated by this, we examine an optimal insurance problem allowing the insured and the insurer to have heterogeneous beliefs about loss distribution. To reduce ex post moral hazard, we follow Huberman et al. (1983) to assume that alternative insurance contracts satisfy the principle of indemnity and the incentive-compatible constraint. Under the assumption that the insurance premium is calculated by the expected value principle, we establish a necessary and sufficient condition for an optimal insurance solution and provide a practical scheme to improve any suboptimal insurance strategy under an arbitrary form of belief heterogeneity. By virtue of this condition, we explore qualitative properties of optimal solutions, and derive optimal insurance contracts explicitly for some interesting forms of belief heterogeneity. As a byproduct of this investigation, we find that Theorem 3.6 of Young (1999) is not completely true.

Optimal Insurance under Heterogeneous Belief

In this paper, we study an optimal insurance problem, which allows the insured and the insurer to have heterogeneous probability beliefs in the distribution of potential losses, on the basis of which we maximize the expected utility of the insured’s final wealth. In order to reduce ex-post moral hazard, we assume that the alternative insurance contract follows the principle of indemnity and incentive compatibility constraints. Under the assumption of Wang’s premium principle, we derive a necessary and sufficient condition for the optimal solution. Then we discuss some particular characteristics of the optimal solution and the optimality of no insurance and full insurance.

Variance Contracts

We study the design of an optimal insurance contract in which the insured maximizes her expected utility and the insurer limits the variance of his risk exposure while maintaining the principle of indemnity and charging the premium according to the expected value principle. We derive the optimal policy semi-analytically, which is coinsurance above a deductible when the variance bound is binding. This policy automatically satisfies the incentive-compatible condition, which is crucial to rule out ex post moral hazard. We also find that the deductible is absent if and only if the contract pricing is actuarially fair. Focusing on the actuarially fair case, we carry out comparative statics on the effects of the insured's initial wealth and the variance bound on insurance demand. Our results indicate that the expected coverage is always larger for a wealthier insured, implying that the underlying insurance is a normal good, which supports certain recent empirical findings. Moreover, as the variance constraint tightens, the insured who is prudent cedes less losses, while the insurer is exposed to less tail risk.

The Principle of Indemnity in Valued Marine Policies

To consider people are encountering many perils that threat their health, life and property as such people interested to insure their belonging and get rid of risk and danger to live and work tranquility. As stated that marine insurance is the oldest branch of insurance and now days most of trade is by sea transportation and economic of countries are rely on export and import which are strongly depend on marine insurance, because the marine insurance plays an important role in the world and has high position. And how marine insurance includes the loss and which losses are not included considering one of the most important subjects for that person who wants to insure their life and property. The paper intends to give a wide-ranging account of the principal of indemnity in a marine insurance and analyses which losses are not included by a marine insurance contract. A policy of assurance has long held is not perfect contract of indemnity. This paper attempt is to examine this truism in the context of value policies.

The Principle of Indemnity in Insurance Law

The principle of indemnity, as one of the most fundamental principles in damage insurance contract is thematic and has a broader subject area than the concept of damage in civil liability. Methodology: This is the principle underlying the two effects: first, due to this principle, the policy holder is obligated to compensate a damage that has been resulted due to the occurring a coverage event on the property of the policy holder in the property insurance and on the people in the insurance of liability. Results: Thus, A defining characteristic of insurance, providing that a loss payment will replace what is lost, putting the insured back to where it was financially prior to the loss without rewarding or penalizing the insured for its loss. In fact, based on this principle, the resulted damage should be compensated totally and ideally. This is known as “positive aspect.” Secondly, the compensation should not lead to the increase in the assets of the victim and it should not be turned into a benefit source for the injured party (the negative aspect). Anyway, although this principle has two different approaches, positive and negative, applying it requires the judicial precedent rely on the positive aspect, unless the contrary is approved. Conclusion: This is a binding principle of damage insurance contracts that insurers are obligated in administering it to compensate the actual loss (assessed) of the victims according to the contents and conditions of issued policy up to maximum insurance obligations. In insurance law approved in 1361, legislator has employed the word “damage” in 15 articles out of 36 articles (1,7,13,10,14,15,16,19,20,21,22,23,28,29, and 30) indicating that damage is highly important in insurance law.

Insurance Law and the Principle of Indemnity in Light of Ridgecrest NZ Ltd v IAG New Zealand Ltd

When the Supreme Court discussed the principle of indemnity in Ridgecrest NZ Ltd v IAG New Zealand Ltd, it was referred to as "awkward" in the context of a replacement policy. The application of the indemnity principle in the case raises further questions about the nature of the principle in insurance contracts. It is submitted that the indemnity principle is currently enforceable not as a legal test nor as a policy-based presumption; rather, it is applicable mostly because it is presumed the parties intended it to apply. This conclusion draws on both consideration of the rationales and rules of, exceptions to, and law reform concerning the principle. It also draws on analysis of the principle in light of Ridgecrest and two other recent cases following the Christchurch earthquakes that deal with the principle of indemnity.

Prohibición al asegurado de reconocer su responsabilidad y realizar acuerdos con terceros en el seguro de responsabilidad civil

<p>El estudio abarca genéricamente los deberes del asegurado como contexto del análisis de la prohibición al asegurado en el seguro de responsabilidad civil de no reconocer su responsabilidad ni efectuar acuerdos con terceros. Se estudia el régimen general de los distintos deberes del asegurado en la celebración y la ejecución del contrato de seguro, con mención especial al contrato de seguro de responsabilidad civil por ser en este en el que se contempla la prohibición.</p><p>Se analiza la forma en que los deberes del asegurado desarrollan principios rectores del contrato de seguro como la buena fe y el principio indemnizatorio, identificando así su naturaleza y su consecuencia jurídica. Se identifican tres distintas especies de deberes a cargo del asegurado en el contrato de seguro que se distinguen a partir del estado temporal del riesgo en el contrato de seguro, bien sea: i) al momento de transferirse al asegurador, ii) siendo asumido por parte del asegurador, y iii) habiéndose realizado estando a cargo del asegurador.</p><p>El riesgo es el elemento aleatorio del contrato de seguro que le da el carácter de ser de tracto sucesivo, de manera que el estado temporal del riesgo determina la conducta que deben asumir los intervinientes en el contrato de seguro durante su celebración y ejecución, analizándose puntualmente la conducta que debe asumir el asegurado por ser quien él para quien se establece la prohibición objeto de estudio.</p><p>En algunas legislaciones latinoamericanas se observan distintas consecuencias al incumplimiento de esta prohibición. A nivel nacional, es común la asignación de la consecuencia jurídica de pérdida del derecho a la indemnización como también se observa que se establece la prohibición sin contemplar consecuencia jurídica a su incumplimiento. Este estudio plantea que en nuestro ordenamiento esta consecuencia<br />se da como sanción a la mala fe en la reclamación y no es adecuada para el incumplimiento de la prohibición objeto de estudio.</p><p>Se analizan los efectos del incumplimiento del reconocimiento de responsabilidad por parte del asegurado y del acuerdo entre este y terceros, proponiendo la consecuencia que se considera jurídicamente adecuada en razón de la naturaleza de la prohibición al asegurado.</p>

Securitization and Credit Default Swaps (CDSs): Towards Diagnostic of the Fundamental Problem and Suggested Solutions

Most of the blame for the present Global Financial Crisis (GFC) has been attributed to securitization and CDSs in the years preceding growth of the crisis. On reflection, most of the blame must be “sheeted home” to the former U.S government’s mandate to banks and other financial institutions to mitigate their normal lending criteria on U.S home loans, in case, the voters could be granted home loans when they could otherwise be unable to do so. The fundamental problem with these securitization contracts was not the securitization of good loans, but the securitization of “lemons”. The loans should have never been entered into in the first place. The “failure” of securitization contracts was therefore a failure of well-intended (but poor) government policy makers in foreseeing the unintended consequences. In order to “insure” against expected defaults, the lenders and the investors entered CDS contracts in the shadow banking sector which were cheaper than the conventional loan insurance. The fundamental problem with the CDS contracts which are much touted in the regulated and shadow banking sectors as being “desirable” as a cheaper form of “insurance”, was that they were (and are) able to be used for wagering or betting purposes. In contrast to the conventional insurance contracts, CDS contracts do not require an insurable interest; do not require compliance with the indemnity principle; and are not uberrima fides. Therefore, opportunities for excessive speculation present in asset price bubbles such as GFC and CDSs. But, as Menard Keynes indicated in 1931, while a little bit of speculation does no harm, excessive speculation can result in systemic collapse.

O RESP 1.159.242 – SP: A NECESSIDADE DE UM ESPAÇO DE "NÃO DIREITO" NA MODERNIDADE LÍQUIDA

O presente trabalho analisa criticamente a decisão do Superior Tribunal de Justiça (STJ) no âmbito do Recurso Especial (REsp) 1.159.242 – SP, em que um pai foi condenado a pagar R$ 200.000,00 (duzentos mil reais) à filha, em virtude de abandono afetivo. O julgamento, em abril de 2012, levantou discussão sobre a natureza jurídica do afeto no ordenamento jurídico pátrio, sendo o entendimento da corte passível de críticas sob diversos aspectos (doutrinário, jurisprudencial e sociológico). Sob o aspecto doutrinário, há o entendimento de que a natureza do afeto não admite o seu tratamento como um princípio jurídico, digno de indenização. Os Tribunais de Justiça de São Paulo e Minas Gerais, por sua vez, também não vêm seguindo o STJ após a decisão em comento, sob o fundamento de que não há, em tais situações, ato ilícito que enseje o dever de indenizar. De uma perspectiva crítico-sociológica, é possível questionar a decisão do STJ a partir da teoria desenvolvida por Bauman, segundo a qual estamos inseridos na denominada “modernidade líquida”, momento em que relacionamentos e sentimentos humanos vêm sendo reduzidos a dinheiro e consumo. Dos argumentos apresentados é possível concluir pela necessidade de existência de um espaço no qual a intervenção do Direito não seja viável, pela impossibilidade de solução dos conflitos e pela necessidade de preservação da autonomia, espaço denominado por Rodotà de “espaço do não direito”.