An economically viable model for insurers to demutualize

Article Abstract:

Mutual insurers in search of additional capital to expand into new businesses should consider demutualization as a means of entering the market, despite the complicated regulatory process. Regulations governing demutualization have viewed policyholders as owners of the insurer, but policyholders have only the right to enforce the details of their own policy. Other regulations specify that no one can own more than 5% of the shares for five years after the conversion is made. All policyholders must be notified of the conversion by the insurer as soon as the plan is approved by state regulators.

Securities

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The price of regulation: Japan's huge insurance market has long remained closed to outsiders but at a high cost

Article Abstract:

Japan's tight regulatory policies have put off foreign entries into the Japanese market. License applications are tightly screened and premium levels, new products and distribution channels are controlled to protect policyholders from company insolvency due to market overcrowding. However, the Japanese government have agreed to allow US trade negotiators to implement variable rating for the automobile line and restrictions on personal lines for new nonlife companies. A modified form of free pricing and deregulation will be effected gradually.

Japan, Laws, regulations and rules, Cover Story, Industry regulations, Government regulation of business, Trade regulation

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India, Costa Rica and Brazil move toward privatization

Article Abstract:

Brazil, Costa Rica, and India are taking steps towards deregulating their monopolistic state-owned insurance industries. In India, life and nonlife reinsurance is already available from European reinsurers, and US reinsurers could negotiate with current regulators to enter the market. Costa Rica is planning to make its Instituto National de Seguros more competitive. Brazil is gradually making progress towards increasing the opportunity for competition in the insurance business within the country.

International aspects, Economic policy, Brazil, India, Costa Rica

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