Ethical Reflections on Company-Owned Life Insurance

COLI – company owned life insurance – is often purchased by firms on employees in whom the firm has no demonstrable insurable interest. Though no immediate harm comes to individuals insured in this way, purchasing such policies raises moral questions. From a Kantian framework, questions arise about reciprocity and fairness, the deception of employees, the generation of mistrust, and the use of the employee’s life as a means to profit. No compensating social good is served by the sale of these policies.     

Blurred Promises: Ethical Consequences of Fine Print Policies in Insurance

The insurance industry’s practice of producing comprehensive insurance policies can have unforeseen and negative ethical consequences. Insurance policies express promises from the insurer to the insured, to the effect that the insurer should be trusted to appropriately assist the insured in case of accident. The relation is seriously undermined when the content of the promise is blurred, containing clauses and condition which are ambiguous or hidden in fine print. This paper contains an investigation of (1) the sources of the fine print policy practice, (2) its immediate effects on the degree to which the policies are understandable to the insured, (3) the ethical consequences that can follow from blurring the true content of the insurer’s promise to the insured and (4) the measures insurers can take in order to develop a more constructive ethical relationship with its customers.

     

Cues of credibility and price performance of life insurance comparison Web sites

An array of Web sites is available to help consumers find the best deals on products and services. While these sites have the potential to save time and money by directly comparing alternatives, consumers still have the task of assessing the credibility of these comparison sites. Experts recommend that consumers look for certain key disclosures or “cues” to assess a site's credibility (e.g., a site's identity, the currency and authoritativeness of its information, its sponsors and business relationships, and its privacy practices). Focusing on 32 life insurance comparison Web sites, this research found that these recommended cues are often not present on Web sites and, when they are, do not seem to predict a site's ability to deliver the lowest‐priced quotes for term life insurance policies.     

Managing policy lapse risk in Sweden’s life insurance market between 1915 and 1947

Abstract

We examine the challenges that Swedish life insurers faced in managing the lapse risk of policies written on the lives of the industrial urban working class between 1915 and 1947. We observe that with the threat of State socialisation of insurance in the 1930s, industrial life insurers modified their business practices to better control policy lapses. Using firm-level data, we also analyse the effect of socio-economic changes, such as rising real wages, interest rate fluctuations and unemployment on life insurance policy lapses. Our results support contemporary tests of the emergency fund and interest rate explanations for the voluntary premature termination of life insurance policies.     

PRICING IN AN INCOMPLETE MARKET WITH AN AFFINE TERM STRUCTURE

We apply the principle of equivalent utility to calculate the indifference price of the writer of a contingent claim in an incomplete market. To recognize the long-term nature of many such claims, we allow the short rate to be random in such a way that the term structure is affine. We also consider a general diffusion process for the risky stock (index) in our market. In a complete market setting, the resulting indifference price is the same as the one obtained by no-arbitrage arguments. We also show how to compute indifference prices for two types of contingent claims in an incomplete market, in the case for which the utility function is exponential. The first is a catastrophe risk bond that pays a fixed amount at a given time if a catastrophe does not occur before that time. The second is equity-indexed term life insurance which pays a death benefit that is a function of the short rate and stock price at the random time of the death of the insured. Because we assume that the occurrence of the catastrophe or the death of the insured is independent of the financial market, the markets for the catastrophe risk bond and the equity-indexed life insurance are incomplete.     

Study on Subjects of Basic Medical Insurance in Urban Areas of China

The legal relationship of medical insurance refers to relationship of rights and obligations among subjects of medical insurance, namely relation- ship of rights and obligations formed among the insurer, the applicant, the insured and the beneficiary of medical insurance due to payment of medical insurance premiums and management and supervision of medical in- surance fund. Only if the range of the insured serving as the subject of rights in such legal relationship, namely the insurant enjoying basic medical insurance, is defined can the legal relationship of basic medical insurance be better adapted to and values and goals of legal system of basic medical insurance be realized.     

Pop-Ups, Cookies, and Spam: Toward a Deeper Analysis of the Ethical Significance of Internet Marketing Practices

While e-commerce has grown rapidly in recent years, some of the practices associated with certain aspects of marketing on the Internet, such as pop-ups, cookies, and spam, have raised concerns on the part of Internet users. In this paper I examine the nature of these practices and what I take to be the underlying source of this concern. I argue that the ethical issues surrounding these Internet marketing techniques move us beyond the traditional treatment of the ethics of marketing and advertising found in discussions of business ethics previously. Rather, I show that the questions they raise ultimately turn upon questions of technique and the ways in which technologies can transform the fundamental means by which relationships are established and maintained within a social environment. I then argue that the techniques of e-commerce are indeed transforming the means by which businesses relate to consumers, and that this transformation is affecting the applicability of our previous ways of demarcating the imperatives determining the limits of accessibility between consumers and businesses. Properly addressing the ethical status of the techniques of e-marketing as such necessarily moves us to consider the changes that Internet commerce are having upon the norms that govern individuals in their relations with others.     

强制保险对提高市场效率的作用研究——基于对信息不准确保险市场的分析

本文以社会福利为衡量保险市场效率的标准,分析了在处于R-S均衡的保险市场中,如果有部分投保人低估自身风险,实施强制保险是否有助于保险市场效率的提高。作者首先证明了在存在逆选择现象的保险市场上,若有部分低风险投保人低估自身风险,则会使市场效率下降;然后通过比较实施强制保险前后社会福利的差异,得出结论:实施强制保险有助于社会福利的改善,从而可以提高保险市场效率。     

人寿保险契约之不可抗辩条款研究

不可抗辩条款是人寿保险契约中一个独特的保单抗辩规则,为阻却保险人因投保人或者被保险人在缔约之际违反如实告知义务而享有的解除权而设,以督促保险人在合理期间内尽核保调查义务,保护被保险人(或受益人)所享有的寿险保单上的合理期待或信赖利益,体现了对被保险人之生命价值的特殊关怀,具有很强的伦理价值评价功能,以及对保险单除外责任条款之内容控制作用.我国保险法应当依据我国寿险业之现状,移植和借鉴不可抗辩条款法则,以提高对广大保险消费者的法律保护水平.     

Power Inequality in Cross-cultural Learning: The Case of Japanese Transplants in China

This article considers power inequality in the context of cross-cultural organizational learning. A qualitative study of five Japanese subsidiaries operating in the People's Republic of China revealed that the Japanese had invested considerable effort into replicating and reinforcing the corporate values, norms, policies and collective learning practices from their home country. Through control of organizational resources and through all-embracing culture transformation programmes, they had leveraged their dominant power to standardize the social construction of collective learning processes and impose these upon the local Chinese. It is noted that these programmes raise the spectre of de-culturalization, namely, removal of Chinese identity and cloning of Japanese identity, and pass opportunities to implement alternative programmes based on libertarian education philosophies that could drive a bilaterally negotiated approach to cross-cultural integration.     

Working with Corporate Social Responsibility in Brazilian Companies: The Role of Managers’ Values in the Maintenance of CSR Cultures

Corporate social responsibility (CSR) refers to the duty of management to consider and respond to issues beyond the organization’s economic and legal requirements in line with social and environmental values. However, ‘management’ is constituted by real people responsible for routine decisions and formulation and implementation of policies. It can be said therefore that the ethical ideals and beliefs of these individuals – in particular their personal values – play an important role in their decisions. It is contended in this article that the personal values of managers may contribute to the creation and maintenance of ‘CSR cultures’ in their organizations; that is, organizational cultures focused on ensuring environmental and social sustainability. Based on an exploratory study carried out in Brazil in 2008, this article explores the perceptions of five CSR managers in relation to the influence of their personal values on their work. The first part discusses the notion of CSR within the context of Brazilian society, the second provides a brief literature review on the link between values and organizational cultures and the third explores the perceptions of the participating managers, identifying the main thematic patterns that emerged in the study.     

How to Improve insurance Accountant Integrity

Integrity should be the ingenious attribute of an accountant. 1. The social significance of insurance accountant Integrity Integrity is fundamental to the socialist market economy and the lifeline of insurance companies. Insurance sector is characterized by risk management and intangible product. It is a pledge upon which the insurer pays the insured or the beneficiary following an insurance accident. In some sense insurance is the symbol of credit.     

税延政策下不同收入层人群养老保险模式选择——基于累进税制和比例税制的综合实证研究

个税递延型商业养老保险政策的实施将对不同收入层次和不同收入来源人群的养老保险模式选择产生重大影响,而我国现行以累进型为主的个人所得税制度在这一影响发生的过程中发挥着根本性作用.基于这一影响机制,本文重点研究EET模式商业养老保险的受益群体范围,以不同收入水平和不同收入来源的杭州市居民为研究对象,以包含社会养老保险和商业养老保险的动态养老金总替代率期望值为调节目标,构建包含个人所得税的累进税率和比例税率变量的保险精算模型,设计和测算了投保期内的下临界点S1和上临界点S2.在此基础上,从居民购买商业养老保险意愿度和社会公平的角度出发,探讨对两个临界点的进一步调整,分析EET模式商业养老保险受益群体范围以外人群的行为决策,并最终提出政策性建议.     

The contagion effect of default risk insurer downgrades: The impact on insured municipal bonds

Municipal bonds are often insured by insurance companies that promise to pay investors in the event of default on the part of the issuer. However, just as the financial strength of the insurer can provide assurance to investors, questions about insurer stability may heighten investor concerns. This paper considers three major downgrades to large municipal bond insurers and the effects of each downgrade on a large sample of municipal bonds. Results reveal the effects to be widespread: not only are risk premiums on bonds insured by the downgraded insurer affected, but so are those on bonds insured by other insurance companies.     

How Well Do Owner–Managers Forecast Potential Future Bankruptcy? Assessing Fear of Failure Using Employment Insurance for SMEs

The literature so far has not addressed how owner–managers deal with the risks associated with potential future bankruptcy. We propose here a new way to assess the fear of failure experienced by SME owner–managers and examine whether these risks are being anticipated accurately, by focusing on the benefits to be gained from French unemployment insurance. We compare the valuation of the benefits of the unemployment insurance scheme for the two populations of insured and uninsured owner–managers after matching. We rely on matching procedures and a five‐step protocol. Our results show that owner–managers' awareness of possible future problems increases when becoming insured and after experiencing a failure, suggesting some business failure myopia in this population. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

Social influence and green consumption behaviour: a need for greater government involvement

ABSTRACT

Within the green marketing literature, there has been a tendency to focus on the individual when explaining green consumption behaviours (GCBs) rather than looking at the wider social factors that may influence green practices. The main objective of this article is to gain a greater understanding of how consumers’ GCBs are influenced by the social environment, within a social cognitive framework. A total of 20 individual interviews and 10 joint interviews took place with consumers who did not always behave in accordance with their pro-environmental values, and thematic analysis was used to analyse the data. Our analysis shows how consumers’ GCBs are influenced by other individuals; however, if we want to see a greater commitment to green consumption practices, government bodies need to take a more active role.     

Verbraucherschutz im Bereich der Versicherung — das schwedische Konsumentenversicherungsgesetz

Zusammenfassung Das neue schwedische Konsumentenversicherungsgesetz soll Versicherungsbedingungen bewirken, die den Bedürfnissen der Verbraucher besser entsprechen. Zeitliche Kontinuität des Versicherungsschutzes auch bei Erneuerung der Versicherung und vor der Prämienzahlung gehören zu den Interessen, die dabei im Vordergrund stehen. Auch bei Obliegenheitsverletzungen soll der Versicherungsschutz beibehalten werden, soweit dies mit den Interessen der Versicherungswirtschaft in Einklang zu bringen ist.

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Consumer protection in the field of insurance — The new Swedish Consumer Insurance Act

This article gives a survey of a new Swedish statute on insurance contracts with consumers. The scope of the Act is limited to the branches that are most important to consumers, such as household or homeowner insurance and motor insurance. It leaves aside life insurance and other insurance of persons, for which legislation is to follow later.The object of the Act is described as being to facilitate the conducting of insurance business in a suitable manner, paying regard to the needs of consumers as insured. The consumers are to have legal rights against the insurers, so as not to depend largely on the insurers' good will. Competition between insurers should also be encouraged.The Act contains a number of — technically rather complicated — rules that aim at safeguarding the continuity of the insurance protection. An underlying assumption is that a gap in the validity of an insurance, because of failure to renew the insurance contract, can be fatal to a person insured if damage occurs during that period. There are, therefore, rules regarding automatic renewal. The interest of the insured in being able to change the insurance, or move to another insurer, is protected principally by a rule that the maximum period of contract is normally one year.The wish to safeguard the unbroken continuity of an insurance contract is also reflected in the rules relating to payment of premiums. The insured is to have adequate time for payment after receiving notice. He shall not lose the insurance protection even temporarily — which would leave him without indemnity if damage occurred during that time — unless he has received two successive notices of payment. The second notice is to be a cancellation of the insurance contract, since the insurer shall not be entitled to a premium for a period during which he has not been at risk.The rules regarding failure of the insured to comply with duties regarding disclosure, warranties, etc., are based on the idea that total loss of the right to the insurance indemnity may be detrimental for the types of insurance that the statute concerns. An insured who has acted without fault shall always be entitled to full insurance indemnity, and even if he has been at fault, the consequence should as far as possible be only a reduction of the insurance indemnity, not total loss of it. However, the need for a sanction against fault varies considerably for different branches of insurance, and the rules therefore give considerable leeway for adapting the insurance conditions to the various situations.It is mentioned that the statute has already given rise to considerable discussion in Sweden. On the one hand, the insurers maintain that the statute will lead to increased premiums, mainly because of the amount of protection that is given to those who are careless. On the other hand, the proponents of the statute argue that in fact the rules of the statute mostly agree with the present practice of the insurers and should therefore not give rise to any appreciable increases of premiums.

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Jan Hellner ist Professor für Rechtswissenschaft an der Universität Stockholm, S-106 91 Stockholm, Schweden.     

A martingale representation theorem and valuation of defaultable securities

We consider a financial framework with two levels of information: the public information generated by the financial assets, and a larger flow of information that contains additional knowledge about a random time. This random time can represent many economic and financial settings, such as the default time of a firm for credit risk, and the death time of an insured for life insurance. As the random time cannot be seen before its occurrence, the progressive enlargement of filtration seems tailor‐fit to model the larger flow of information that incorporates both the public flow and the information about the random time. In this context, our interest focuses on the following challenges: (a) How to single out the various risks coming from the financial assets, the random time, and their correlations? (b) How these risks interplay and lead to the formation of any risk in the larger flow of information? It is clear that understanding how risks build‐up and interact, when one enlarges the flow of information, is vital for an efficient risk management and derivatives' evaluation in those informational markets. Our answers to these challenges are full and complete no matter what the model for the random time is and no matter how the random time is related to the public flow. In fact, we introduce “pure default” risks, and quantify and classify these risks afterward. Then we elaborate our martingale representation results, which state that any martingale in the large filtration stopped at the random time can be decomposed into orthogonal local martingales (i.e., local martingales whose product remains a local martingale). This constitutes our first principal contribution, while our second contribution consists in evaluating various defaultable securities according to the recovery policy, within our financial setting that encompasses any default model, using a martingale “basis.” Our pricing formulas explain the impact of various recovery policies on securities and determine the types of pure default risk they entail.