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Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.
"A strong conviction that something must be done is the parent of many bad measures."
-- Daniel Webster
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Thursday, February 27, 2003 :::
State Farm nixes nuclear claimsBloomington-based State Farm Insurance Cos., the nation’s largest auto insurer, is changing its auto insurance policies to exclude claims for damage caused by nuclear explosions or radioactive contamination. Insurance companies are great for spreading out diversifiable risks, but the correlated ones not so much. I wrote to my Congressman last year about terrorism insurance; I'd like to see a capitalist solution, and the clearest way to do that is to promote a market in catastrophe derivatives, but it might be difficult to police them the way they would need to be policed. Would only allowing large, regulated insurance companies to take the long side (i.e. the side that benefits from such catastrophes) be sufficient and enforceable? Would it make it impossible for the market to get terribly efficient?
::: posted by dWj at 4:25 PM
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