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But they can 'write uncovered checks' by insuring risks they can't cover: No / smaller catastrophes: do the math, cash the premiums, do the payouts. Big catas
by RetroTechie 3y ago
But they can 'write uncovered checks' by insuring risks they can't cover:
No / smaller catastrophes: do the math, cash the premiums, do the payouts.
Big catastrophe: insurer would go under, but as long as it doesn't happen they can still cash the insurance premiums & everything is a-okay.
- AlbertCory 3y agoExactly. They can declare bankruptcy. Or they can refuse to cover it, so that the legislatures have to get involved. Implicitly, the government is covering the Black Swan events.