Risk Aversion, Insurance Insurance, and the Limits of Regulation
UC Irvine Law Review
UVA Law Faculty Affiliations
The heart of insurance – what enables insurance to function – is risk aversion. It follows from the fact that potential policyholders are risk averse that sometimes they are also averse to the risk that insurance covering a loss will not be available or will not be reliable. In this Article I show that administrative and judicial regulation is sometimes directed at providing insurance against these risks. I call this “insurance insurance,” and explore where this way of thinking about the potential insurance insurance features of the regulation of insurance may lead.
Kenneth S. Abraham, Risk Aversion, Insurance Insurance, and the Limits of Regulation, 5 UC Irvine Law Review 513-536 (2015).