Information Disclosure in a Competitive Insurance Market - The Government Role

Abstract

The paper examines the role of information disclosure in a competitive insurance market and the role of government in facilitating the flow of information between insurance market participants. After an introduction to the theoretical framework, the paper outlines some specifics of information disclosure in insurance and the role for the government. It distinguishes between three main pillars of information disclosure in insurance: disclosure of financial information, disclosure of information related to product, price and redress mechanisms and disclosure of factors relevant to the risk. The major part of the paper is devoted to insurance regulation and contemporary regulatory issues dealing with disclosure of information in Australia. Finally, the paper emphasises the importance of information disclosure as a regulatory instrument, recognises its limitations, and outlines some remaining public policy issues.