Non-life Insurance Price Regulation and Competition: A StudyFocusing on the Impact of Premium Rate Deregulation

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This study tests the efficacy of the Japanese rate regulations for automobile insurance consisting of compulsory liability insurance and voluntary insurance, as well as earthquake insurance operated under the virtual tariff rate system. The results from the empirical and theoretical analyses reveal that the double-layered automobile insurance is effective in minimizing adverse selection and preserving the insurance availability. Meanwhile, we find no distinctive empirical evidence for earthquake insurance although it is theoretically expected that the tariff rates would contribute to the stability of insurance supply.