Norma L. Nielson

The Evolution of the Role of Risk Communication in Effective Risk Management

Risk management has evolved significantly over the past decades causing dramatic changes in the communication channels required to effectively handle the ever-changing risks a firm faces. The first generation of risk management dealt primarily with risks inside a company creating a need for internal risk communication. The second generation, which arose with the growth in third-party liability claims, involved many more stakeholders external to the company and forced the risk management function to deal with communications to these external parties. The third generation, which began as an expansion of the external risks that firms are exposed to, involves the board and senior management in the risk communication function.

AIDS and the law: a guide for the public.

AIDS and the Law is the first comprehensive survey of the legal issues encountered by anyone dealing with the disease, providing a crucial--and accessible--overview of the ways our society, through its laws, can and should respond to this rapidly widening epidemic.

Private pensions and government guarantees: clues from Canada

The Pension Benefits Guarantee Fund (PBGF) was established in the province of Ontario in 1980, thus creating in Canada a rare opportunity for intranational empirical research on the impacts of governmental protection on private plans and their participants. This paper examines Canadian data on pension plans for effects attributable to Ontarios government guarantees for some plans. We find that significant variables related to an increase in the number of pension plans in Canada are higher interest rates, a larger labour market, and, consistent with the deferred compensation theory from labour economics, lower real disposable income of workers. The number of members in pension plans is related significantly to the same variables and also to tax rates and unemployment. The analyses show that the Ontario environment for pension plans is significantly different from the rest of Canada. Those plans covered by the Pension Benefit Guarantee Fund exhibit a lower degree of funding per participant than do the remainder of the plans in the sample, supporting the argument that a government guarantee is related to a moral hazard problem in Ontario pension financing.

Computer-Mediated Peer Review of Student Papers.

Abstract Peer reviews provide a time-honored way to give feedback and evaluate writing, yet few student papers receive this sort of scrutiny. This article examines qualitative and procedural reasons that have limited the use of peer review for student work. It then discusses various computer-mediated approaches for conducting peer reviews and examines how these systems can sidestep the pitfalls of paper-based systems.

Capacity of the Property-Casualty Insurance Industry

This paper examines the interrelationships among the capacity variables of level of surplus, investment risk, underwriting risk, and expenses. The primary objective is the development of a capacity measure that recognizes all these variables and interrelationships. The study addresses the capacity issue from the perspective of insurer management rather than from the regulatory perspective that has appeared in other recent research. This theory begins with the realistic view that surplus is relatively fixed and determines the aggregrate premium volume and rate of growth that can be sustained by an insurer while maintaining a ruin probability below some specified ?. Traditional risk theory, as well as earlier research dealing with by-line loss ratios, loss reserve estimation accuracy, and investment portfolio risks, is used to develop a unified theory of capacity. Capacity of the Property-Casualty Insurance Industry1

Pricing for Multiline Insurer: Frictional Costs, Insolvency, and Asset Allocation

This article examines multiline insurance pricing based on the contingent claim approach in a limited liability and frictional costs environment. Capital allocation is based on the value of the default option, which satisfies the realistic assumption that each distinct line undertakes a pro rata share of deficit caused by insurer insolvency. Premium levels, available assets, and default risk interact with each other and reach equilibrium at the fair premium. The assets available to pay for liabilities are not predetermined or given; instead, the premium income and investment income jointly influence the available assets. The results show that equity allocation does not influence the overall fair premium. For a given expected loss, the premium‐to‐expected‐loss ratio for firms offering multiple lines is higher than that for firms only offering a single line, due to the reduced risk achieved through diversification. Premium‐to‐expected‐loss ratio and equity‐to‐expected‐loss ratio vary across lines. Lines having a higher possibility or claim amount not being paid in full exhibit lower premium‐to‐expected‐loss ratio and higher equity‐to‐expected‐loss ratio. Positive correlation among lines of business results in lower premium‐to‐expected‐loss ratio than when independent losses are assumed. Positive correlation between investment return and losses reduces the insolvency risk and leads to a higher premium‐to‐expected‐loss ratio.

Examining the effects of guarantee funds on pension plans

Abstract Bankruptcy risk falls to pension plan participants if a plan sponsor fails when a defined benefit (DB) pension plan is underfunded. This article examines the incidence of that risk and how it changes when public policy provides a guarantee fund. Although government-based guarantee funds are in a unique position to provide pension protection, primarily because of the extent to which the risk of sponsor default is systematic in nature, a looming question is the extent to which such guarantees are exposed to moral hazard. The article focuses on that question using data from four Canadian provinces, including one (Ontario) that operates a guarantee fund for pensions. The findings show that plan assets per DB-plan participant increase with the earnings of workers and decrease with higher unemployment, and that level of assets also is moderated by the influence of taxes, with higher plan assets observed when and where tax rates are higher. Plans in Ontario had on average

Work and Nonwork Predictors of Employees' Retirement Ages☆☆☆

20,035 less in asset value per participant, and Ontario plans covered by the guarantee fund had an average of

Annuities and Your Nest Egg: Reforms to Promote Optimal Annuitization of Retirement Capital

16,497 less per participant than other Canadian DB plans not backed by a guarantee fund. A separate model finds the presence of a guarantee fund to be one of a very small number of variables significant in explaining variability in the plans’ funded ratios. These empirical results are consistent with the existence of moral hazard.