The Moral Hazard of Insuring the Insurers

State guaranty funds are quasi-governmental agencies that provide insurance to policyholders against the risk of insurance company failure. But insurance provided by guaranty funds, like all insurance, creates moral hazard problems, especially for companies that are insolvent or near-insolvent. The key insight of this paper is that because of the time lag between premium payments and losses (which is especially lengthy in long-tail lines), writing policies is one way for insurance companies to borrow money (i.e., from policyholders). Moreover, the existence of guaranty fund insurance enables insurance companies, even very risky ones, to borrow from policyholders at rates that do not reflect the insurer's default risk. Thus, one way for insurance companies to game the guaranty fund system is to engage in excessive premium writing. Consistent with this idea, we find that insolvent P&C insurance companies tended to have very high premium growth before they failed. More than one-third of the failed insurance companies had premium growth of more than 50 percent in the two years before failure. Moreover, this excessive premium growth was more pronounced in long-tail lines than in short-tail lines. We also find evidence that greater regulatory resources are associated with less gaming of the system.

Detection of H Alpha Emission in a Methane (T-Type) Brown Dwarf

We report the detection of H{$\alpha$} emission in the T dwarf (methane brown dwarf) 2MASSW J1237392+652615 over three days using the Keck Low Resolution Imaging Spectrograph. The measured line flux, log(L$_{H{\alpha}}$/L$_{bol}$) = $-$4.3, is roughly consistent with early M dwarf activity levels and inconsistent with decreasing activity trends in late M and L dwarfs. Similar emission is not seen in two other T dwarfs. We speculate on several mechanisms that may be responsible for emission, including a strong magnetic field, continuous flaring, acoustic heat generation, and a close ($a$ $\sim$ 4 - 20 R$_{Jup}$) interacting binary, with the cooler component overflowing its Roche lobe. We suggest that the M9.5Ve PC 0025+0447 could be a warm analogue to 2MASS J1237+65, and may be powered by the latter mechanism.Comment: 14 pages, 3 figures, accepted by A

The design, construction, and commissioning of the KATRIN experiment

The KArlsruhe TRItium Neutrino (KATRIN) experiment, which aims to make a direct and model-independent determination of the absolute neutrino mass scale, is a complex experiment with many components. More than 15 years ago, we published a technical design report (TDR) [1] to describe the hardware design and requirements to achieve our sensitivity goal of 0.2 eV at 90% C.L. on the neutrino mass. Since then there has been considerable progress, culminating in the publication of first neutrino mass results with the entire beamline operating [2]. In this paper, we document the current state of all completed beamline components (as of the first neutrino mass measurement campaign), demonstrate our ability to reliably and stably control them over long times, and present details on their respective commissioning campaigns

In re: ‘Experimental Music’

John Cage is universally associated with the phrase experimental music. But what did that phrase mean, for Cage and for Cage’s predecessors? I begin with Cage and Lejaren Hiller, both writing important texts on ‘experimental music’ in 1959. From there, I trace the phrase backwards, eventually reaching Emile Zola, Gertrude Stein, and William James. A final section traces the phrase forward to Cage and Hiller’s collaboration on HPSCHD (1969)