1. Assume that insurers operate in an environment where price regulation does not exist.
a. Describe at least two potential benefits that this type of system provides to consumers.
b. Describe at least two potential costs to consumers.
2. One often sees something like the following comment in articles on careers: "Given that the "average" employee changes jobs five times during his or her career, there is a concern that employees will not be vested in their retirement benefits."
a. Briefly discuss the implications of vesting on retirement income adequacy.
b. Describe a recent market innovation designed to ensure retirement income adequacy.
3. Describe three ways in which insurers control for adverse selection problems in health insurance products.
4. Provide two arguments for maintaining the current state-based insurance regulatory system.
5. Describe two factors that may explain why the demand for insurance (of any kind) differs across individuals.