Lesson 5 Part 1 - LESSON 5 (1): The Insurance Market: The...

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1 Insurance Market= sellers (insurance company), buyers, regulators. LESSON 5 (1): The Insurance Market: The Economic Problem
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2 Buyers, Sellers, and Regulators Regulation Regulation Insurance Companies Individuals Agents and Brokers Business Firms
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3 Economic Theory Market= a place where buyers and sellers transact business. Price is determined by SS and DD. Difficult to achieve perfectly competitive market. Numerous independent sellers, each holding a small market share Numerous well-informed consumers A homogenous products. Perfectly substitutable Freedom of entry and exit Self-correction theoretically means that there is a point where supply equals demand at a price to clear supply of a product. A high degree of regulation to create an orderly marketplace.
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Normal market Two parties - buyers and sellers Insurance - add regulators Government regulation controls all of the relationships in a heavy-handed way. The products, the prices, the sales and
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This note was uploaded on 10/08/2011 for the course FINANCE FINANCE taught by Professor Don'tknow during the Spring '09 term at American Internation College.

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Lesson 5 Part 1 - LESSON 5 (1): The Insurance Market: The...

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