3 ms·
TBF, that’s overcharged in a very insurance-specific sense, not a mustache-twirling fraud sense. Effectively they didn’t adjust prices fast enough to the actual
by kristjansson 3y ago
TBF, that’s overcharged in a very insurance-specific sense, not a mustache-twirling fraud sense. Effectively they didn’t adjust prices fast enough to the actual changes in risk, which on the whole seems like something best dealt with ex post, not ex ante.
- sangnoir 3y ago> Effectively they didn’t adjust prices fast enough to the actual changes in risk, which on the whole seems like something best dealt with ex post, not ex ante. If the insurers could have it their way, they wouldn't have to adjust at all (for overcharging), while avoiding undercharging ahead of time. Oversight is necessary to counter misaligned incentives.
- kristjansson 3y agoRight, this is a reasonable compromise between stability/profitability of risk-buyers and fair pricing for risk-sellers. Prices are unconstrained at transaction, but outsized profits can be clawed back. The point is no part of this is _fraud_.
- sokoloff 3y agoHow would they adjust prices for policies already sold and used, in the event the price for those policies was too low? Issuing refunds after the fact works in a way that issuing bills does not.