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Affiliated reinsurance and insurer performance under capital regulation

Author

Listed:
  • Yi, Minli
  • Yang, Yang
  • Lin, Jyh-Horng

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.

Suggested Citation

  • Yi, Minli & Yang, Yang & Lin, Jyh-Horng, 2021. "Affiliated reinsurance and insurer performance under capital regulation," Finance Research Letters, Elsevier, vol. 39(C).
    • Handle: RePEc:eee:finlet:v:39:y:2021:i:c:s1544612319310918
    DOI: 10.1016/j.frl.2020.101584
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Affiliated reinsurance; Capital regulation; Policyholder protection;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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