One purpose of this study is to examine the market reaction (both share prices and trading volume) of P&L insurers to regulatory changes created by the Cat Fund legislation. Another purpose is an examination of various theories of economic regulation applied to the property-liability insurance industry. Because the evolution of the initial Cat Fund legislation took about six months and involved negotiations between legislators, insurers, and others, our analysis covers the market response to the disclosure of six key legislative events. We examine the relation between changes in the regulatory environment and insurance firm value (and trading volume). (p.409
