Aviva Abramovsky
Volume 15
Issue 2
PUBLISHED
Spring 2009
Abstract
This article argues that any discussion of insurance regulation should consider the impact reinsurance may have on insurer behavior. It reviews traditional types of reinsurance and examines how private reinsurance contracts can influence insurer actions. When reinsurance is excluded from a holistic analysis of the insurance system, its practical effects can misdirect regulatory assumptions. Moreover, reinsurance operates as a source of independent—and often unexamined—contractual influence on insurers, and as a potential source of interference with regulatory initiatives. Although reinsurance arrangements arise from private contracts, those contracts can exert regulatory effects significant enough to warrant answering this Essay’s central question affirmatively: reinsurance may indeed be correctly termed a “silent regulator.”