Pricing of Climate Risk Insurance: Regulation and Cross‐Subsidies
研究发现美国各州对房屋保险的监管差异导致保费扭曲和交叉补贴，保险公司在监管严格的州无法调整费率，转而提高其他州的保费，长期加剧风险错配和保险公司退出。
ABSTRACT Homeowners insurance is central to managing the rising losses from climate‐related disasters. We show that insurance premiums are subject to starkly different regulations across states, creating persistent cross‐subsidies and price distortions. We employ states' regulatory rules in an instrumental variable estimation and a border discontinuity design to show insurers do not adjust rates in highly regulated states and compensate by raising rates in less regulated states. Rates and risks diverge in the long run, distorting cross‐state risk‐sharing and increasing insurer exits from highly regulated states. We argue these patterns stem from the interactions between rate regulation and insurers' financing constraints.