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Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10

Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10. Chet Szczepanski Chief Actuary Pennsylvania Insurance Department. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10. A Regulatory Perspective!.

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Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10

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  1. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 Chet Szczepanski Chief Actuary Pennsylvania Insurance Department

  2. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 A Regulatory Perspective!

  3. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 What the law says! Rates shall be neither: • Excessive, • Inadequate, • Unfairly Discriminatory.

  4. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 • The law tells us what rates can not be. • The law does not tell us what rates should be. • The law does not tell us how to determine rates.

  5. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 The law gives the Commissioner considerable discretion!

  6. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 In Pennsylvania, we rely on competition and competitive markets as much as possible.

  7. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 Competitive markets require, among other things: • Many buyers and sellers • Freedom of entry and exit for both buyers and sellers • No one buyer or seller sufficiently large to affect the price

  8. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 • The government HAS interfered in the personal auto market! • The government mandates coverage, barring exit from the market for consumers.

  9. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 Consequently, the government will serve its constituency by investigating such innovations and regulating their application!

  10. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 An Actuarial Perspective!

  11. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 AAA: Risk Classification Statement of Principles Three Primary Purposes: • Protect program’s financial soundness • Enhance fairness • Economic incentive

  12. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 AAA: Risk Classification Statement of Principles Design considerations: • Underwriting • Marketing • Program design • Statistical considerations • Operational considerations • Hazard reduction incentive • Public acceptability • Causality • Controllability

  13. Movie Ticket, $8; Popcorn, $5; Pay-as-you Drive Insurance, $1.10 Conclusions: • Innovation is necessary for a healthy market • The government issues mandates as a result of public consensus • There exists a tension between the government and innovators in mandated markets!

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