Title:

Shadow banking and life insurance policyholder protection

Group publication title:

Argumenta Oeconomica

Creator:

Chang, Chuen-Ping ; Chen, Shi ; Lin, Jyh-Jiuan

Subject and Keywords:

entrusted loan ; guaranteed rate ; participation rate ; barrier option

Description:

Argumenta Oeconomica, 2022, Nr 2 (49), s. 199-218

Abstrakt:

This paper develops a life insurance liability valuation model that integrates the balance-sheet insurer loans with the shadow banking entrusted loans in a premature default risk environment. It is shown that the life insurance policyholder significantly benefits from the entrusted loan activities in a less likely premature default risk environment. The policyholder protection is increased in accord with a high guaranteed interest rate, particularly when the life insurance company has ample access to entrusted loans. The policyholder protection is also significantly increased by a high participation level when the life insurance company ‘shrinks away’ from accessing entrusted loans. Overall, the authors concluded that shadow banking entrusted loans help policyholder protection.

Publisher:

Publishing House of Wroclaw University of Economics and Business

Place of publication:

Wroclaw

Date:

2022

Resource Type:

artykuł

Resource Identifier:

doi:10.15611/aoe.2022.2.10

Language:

eng

Relation:

Argumenta Oeconomica, 2022, Nr 2 (49)

Rights:

Pewne prawa zastrzeżone na rzecz Autorów i Wydawcy

Access Rights:

Dla wszystkich zgodnie z licencją

License:

CC BY-SA 4.0

Location:

Uniwersytet Ekonomiczny we Wrocławiu