Some insurance markets effectively function as regulation, due to insurance companies encouraging or requiring certain actions in order to gain coverage. Although many economists argue that insurers can reduce moral hazard to some degree, it is debated the extent to which insurers can effectively substitute for government regulations to reduce risk.
Some insurance markets effectively function as regulation, due to insurance companies encouraging or requiring certain actions in order to gain coverage. Although many economists argue that insurers can reduce moral hazard to some degree, it is debated the extent to which insurers can effectively substitute for government regulations to reduce risk.
Source: Wikipedia "Insurance as regulation" · CC BY-SA 4.0
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