Chapter

France

Thomas Von Ungern-Sternberg

in Efficient Monopolies

Published in print February 2004 | ISBN: 9780199268818
Published online April 2004 | e-ISBN: 9780191600890 | DOI: http://dx.doi.org/10.1093/0199268819.003.0004
 France

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Studies catastrophe insurance in France. The French system is fundamentally flawed. The state has fixed a compulsory nationwide uniform premium rate, and offers to reinsure all insurance companies at similar conditions. There is a natural tendency for the good risk insurance companies to buy only little cover from the state. The bad risks make full use of the low cost reinsurance provided. The system has had to be recapitalized in the year 2000 but the fundamental flaws remain. The insurance companies are making a lot of money at the cost of the taxpayer.

Keywords: adverse selection; catastrophe insurance; France; state reinsurance

Chapter.  8875 words.  Illustrated.

Subjects: Public Economics

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