Does Georgia Need A Unitary Tax?

Abstract not available. Report #9

Georgia's Corporate Taxes: Should the Corporate Income Tax be Repealed?

An analysis prepared for the Georgia Public Policy Foundation

The regulation and structure of nonlife insurance in the United States

The insurance industry is underdeveloped in most developing countries because of low levels of income and wealth and because restrictive regulations inhibit the supply of insurance services. But several countries have begun to reform their insurance industries. To help those countries, the authors offer an overview of insurance regulation in the United States - and discuss the economics and market structure of nonlife insurance in entry and exit barriers, economies of scale, and conduct and performance studies. They conclude that the U.S. nonlife insurance industry exhibits low concentration at both national and state market levels. Concentration is low even on a line-by-line basis. The primary concern of regulators has been to protect policyholders from insolvency, but regulation has also often been used to protect the market position of local insurance companies against the entry of out-of-state competitors. Regulation has worked best when based on solvency monitoring, with limited restrictions on entry. It has been more harmful when it involved controls on premiums and products and on the industry's level of profitability. Over the years the industry has shown a remarkable degree of innovation, although it has also faced many serious and persistent problems. The problems include the widespread crisis in liability (including product liability and medical malpractice), the crisis in automobile insurance, the volatility of investment income, the effects of market-driven pricing and underwriting cycles, and the difficulty of measuring insurance solvency. The long-tailed lines of insurance - those that entail long delays in final settlements - are exposed to the vagaries of inflation and rising costs. Two mandatory lines - third party automobile insurance and workers'compensation (for work accidents) - account for nearly 55 percent of premiums. These two lines - plus medical malpractice, other liability, and aircraft insurance - had combined ratios well over 125 percent in 1989. The industry has some ability to collude and to set prices, but seems to be competitive and to earn profits below similarly situated financial firms. Insurance profitability is not consistently above or below normal returns, although earnings for mandatory and strictly regulated lines of automobile insurance and workers'compensation appear to be below-adequate for long-term viability.Insurance&Risk Mitigation,Non Bank Financial Institutions,Insurance Law,Environmental Economics&Policies,Financial Intermediation

The Effect of Insurance Premium Taxes on Employment

This report provides estimates of the effect of the insurance premium taxes on state-level employment in the insurance industry. FRC Report 18

An Examination of Georgia's Premium Tax - Brief

This brief analyzes the effects of changing the structure the insurance premium tax on tax revenues in Georgia. FRC Brief 11

Georgia's Corporate Income and Net Worth Taxes

This report discusses issues regarding the two major business taxes in Georgia: The corporate income tax and the net worth tax. The corporate is based on a company's profit while the net worth tax is based on the value of a company's total assets. Report #7

The demand for homeowners insurance with bundled catastrophe coverages : Wharton project on managing catastrophic risks

In this paper, we estimate the demand for homeowner insurance in Florida. Since we are interested in a number of factors influencing demand, we approach the problem from two directions. We first estimate two hedonic equations representing the premium per contract and the price mark-up. We analyze how the contracts are bundled and how contract provisions, insurer characteristics and insured risk characteristics and demographics influence the premium per contract and the price mark-up. Second, we estimate the demand for homeowners insurance using two-stage least squares regression. We employ ISO's indicated loss costs as our proxy for real insurance services demanded. We assume that the demand for coverage is essentially a joint demand and thus we can estimate the demand for catastrophe coverage separately from the demand for noncatastrophe coverage. We determine that price elasticities are less elastic for catastrophic coverage than for non-catastrophic coverage. Further estimated income elasticities suggest that homeowners insurance is an inferior good. Finally, we conclude based on the results of a selection model that our sample of ISO reporting companies well represents the demand for insurance in the Florida market as a whole

The Demand for Homeowners Insurance with Bundled Catastrophe Coverage

This paper analyzes the demand for homeowners insurance in markets subject to catastrophe losses and where consumers have choices in configuring their coverage for catastrophe and non-catastrophe perils. We estimate the demand for homeowner insurance in Florida and New York using two-stage least squares regression with advisory indicated loss costs as our proxy for the quantity of real insurance services demanded. We decompose the demand for insurance into the demand for coverage of catastrophe perils (i.e., hurricanes or windstorms) and the demand for non-catastrophe coverage and estimate these demand functions separately. Our results are relatively consistent in New York and Florida, including evidence that catastrophe demand is more price elastic than non-catastrophe demand. We also find evidence that consumers value options that expand coverage, buy more insurance when it is subsidized through regulatory price constraints, and consider state guaranty fund provisions when purchasing insurance.

Regulatory solvency prediction in property-liability insurance: risk-based capital, audit ratios, and cash flow simulation

This paper analyzes the accuracy of the principal models used by U.S. insurance regulators to predict insolvencies in the property-liability insurance industry and compares these models with a relatively new solvency testing approach--cash flow simulation. Specifically, we compare the risk-based capital (RBC) system introduced by the National Association of Insurance Commissioners (NAIC) in 1994, the FAST (Financial Analysis and Surveillance Tracking) audit ratio system used by the NAIC, and a cash flow simulation model developed by the authors. Both the RBC and FAST systems are static, ratio-based approaches to solvency testing, whereas the cash flow simulation model implements dynamic financial analysis. Logistic regression analysis is used to test the models for a large sample of solvent and insolvent property-liability insurers, using data from the years 1990-1992 to predict insolvencies over three-year prediction horizons. We find that the FAST system dominates RBC as a static method for predicting insurer insolvencies. Further, we find the cash flow simulation variables add significant explanatory power to the regressions and lead to more accurate solvency prediction than the ratio-based models taken alone.Insurance industry