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Can Insurance Firms Easily Exit from the Market? A Global Comparative Analysis of Regulatory Structures*

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  • W Jean Kwon

    (School of Risk Management, St. John's University, 101 Murray St., Ste 503, U.S.A.)

  • Hunsoo Kim

    (School of Risk Management, St. John's University, 101 Murray St., Ste 503, U.S.A.)

  • Soon-Jae Lee

    (School of Risk Management, St. John's University, 101 Murray St., Ste 503, U.S.A.)

Abstract

This paper deals with market exit issues in the insurance industry. It examines theoretical and practical aspects of exit regulation in insurance as well as internal and external factors that firms may use to select a market exit strategy. From comparing regulatory stringency and permitted forms of market exit in selected countries in Asia, Europe, and North America, the authors find several commonalities. That is, regulators tend to accentuate their responsibility for protecting policyholders’ interests, be deeply involved in most exit processes, and prefer other forms of exit (e.g., buy-out of liabilities or a complete acquisition of business by another firm) than immediate dissolution of insurers. However, not all governments examined are ready to effectively deal with matters related to insurers’ exits from the market. Some governments need better structured regulation and some transparency in market exit regulation. The Geneva Papers (2005) 30, 268–284. doi:10.1057/palgrave.gpp.2510024

Suggested Citation

  • W Jean Kwon & Hunsoo Kim & Soon-Jae Lee, 2005. "Can Insurance Firms Easily Exit from the Market? A Global Comparative Analysis of Regulatory Structures*," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 30(2), pages 268-284, April.
    • Handle: RePEc:pal:gpprii:v:30:y:2005:i:2:p:268-284
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    Cited by:

    1. Boyer, M. Martin & Cowins, Elicia P. & Reddic, Willie D., 2019. "Portfolio rebalancing behavior with operating losses and investment regulation," International Review of Economics & Finance, Elsevier, vol. 63(C), pages 313-328.
    2. Willie Dion Reddic, 2021. "Under pressure: investment behaviour of insurers under different financial and regulatory conditions," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(1), pages 1-20, January.
    3. Willie Dion Reddic, 0. "Under pressure: investment behaviour of insurers under different financial and regulatory conditions," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 0, pages 1-20.

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