Is Paul v. Virginia dead?
In this work, we articulate the case for values of insurance liabilities being company dependent. In the process, we identify main factors determining market values of such liabilities, analyze them from the perspective of dependence on the company issuing them, and follow this with a suggested regulatory approach allowing for company independent valuation. Such regulatory approach is in conceptual agreement with the emerging risk-based capital paradigm.
KeywordsCash Flow Life Insurance Life Insurance Company Insurance Liability Derivative Security
Unable to display preview. Download preview PDF.
- Black, Kenneth Jr. and Harold D. Skipper, Jr. (1994). Life Insurance, 12th edn. Englewood Cliffs, NJ: Prentice Hall.Google Scholar
- Hull, John C. (1993). Options, Futures, and Other Derivative Securities, 2nd edn. Englewood Cliffs, NJ: Prentice Hall.Google Scholar
- Merton, R.C. (1974). On the pricing of corporate debt: the risk structure of interest rates. Journal of Finance, 29, 449–470.Google Scholar
- Pritchett, Travis and Ronald P. Wilder (1986). Stock Life Insurance Company Profitability and Workable Competition. Philadelphia: S.S. Huebner Foundation for Insurance EducationGoogle Scholar
- Sametz, Arnold W. (1987). The new financial environment of the United States. In Edward I. Altman (ed), Handbook of Financial Markets and Institutions, 6th edn. John Wiley and Sons, New York.Google Scholar
- Saunders, Anthony (1994). Financial Institutions Management: A Modern Perspective. Burr Ridge, IL: Richard D. Irwin, Inc.Google Scholar
- Smith, Michael L. (1982). The life insurance policy as an options package. Journal of Risk and Insurance, 45, 583–601.Google Scholar
- Sippel, Erich W. (1993). One system of financial intermediation: a new paradigm. American Council of Life Insurance, Chief Investment Officers Conference, March.Google Scholar