Journal article
Tax-deductible pre-event catastrophe loss reserves: The case of Florida
ASTIN Bulletin : The Journal of the IAA, Vol.38(1), pp.13-51
05/01/2008
DOI: 10.2143/AST.38.1.2030401
Abstract
After Hurricane Andrew the U.S. Congress entertained proposals to allow insurers to employ tax-deferred loss reserves. Interest was strong at first, but as the events receded interest waned. However, after the most recent severe hurricane seasons the proposals are again being discussed. In this paper we examine the institution of catastrophe loss reserves in a stylized model of insurance provisions. First, we find that the benefits of the tax-deferred loss reserves depend on the actuarial assumptions regarding the expected loss distribution. Second, we make the first attempt at estimating the change in consumer behavior and the social welfare implications for permitting tax deferred loss reserves. In sum, we find under specific circumstances there are large welfare gains for allowing the tax deferral of reserves.
Details
- Title: Subtitle
- Tax-deductible pre-event catastrophe loss reserves: The case of Florida
- Creators
- Andreas Milidonis - University of ManchesterMartin F. Grace - Georgia State University
- Resource Type
- Journal article
- Publication Details
- ASTIN Bulletin : The Journal of the IAA, Vol.38(1), pp.13-51
- Publisher
- Peeters
- DOI
- 10.2143/AST.38.1.2030401
- ISSN
- 0515-0361
- eISSN
- 1783-1350
- Number of pages
- 39
- Language
- English
- Date published
- 05/01/2008
- Academic Unit
- Finance
- Record Identifier
- 9984700655002771
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