Private Voluntary Health Insurance: Consumer Protection and Prudential Regulation

Private Voluntary Health Insurance: Consumer Protection and Prudential Regulation


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Health insurance can offer protection against catastrophic medical expenses and improve access to health care. There are, however, imperfections in the insurance market that require intervention such as asymmetry of information between the policy holder and the insurance company, moral hazard that can occur on the side of the insured or the provider of health services, risk selection that may lead to cream skim a particular market, and others. To encourage the effective development of Voluntary Private Health Insurance, it will be necessary for policymakers to establish and enforce regulatory standards that will attempt to correct inefficiencies from market failures and that will achieve desired social objectives.

Product Details

ISBN-13: 9780821387566
Publisher: Bernan Distribution
Publication date: 05/14/2012
Series: World Bank Publications
Pages: 130
Product dimensions: 6.96(w) x 10.26(h) x 0.34(d)

Table of Contents

Foreword vii

Preface ix

Acknowledgments xv

Abbreviations and Acronyms xvi

1 Background and Overview of Private Health Insurance 1

What Is Private Health' Insurance? 2

Functions of Private Health Insurance 3

Types of Private Health Insurance 5

Note 7

2 Scope of Regulation 9

Rationale for Regulation 9

Regulatory Framework 13

Notes 23

3 Prudential Regulation 25

Licensure and Reporting 25

Financial Oversight 33

Management and Governance 45

Monitoring and Enforcement 48

Notes 55

4 Consumer Protection Standards 57

Access-Related Standards 57

Premium Standards 64

Benefit Standards 69

Disclosure, Complaint Handling, and Appeals 71

Conclusions and Afterword 75

Notes 76


Glossary of Terms 77

Note 97

References 99

About the Coauthors 105

Index 109


1.1 Colombia and India: Integrating Private Health Insurance in Achieving Access to Health 2

1.2 Brazil: Duplicate Private Health Insurance 4

1.3 Community-Based Health Insurance 6

2.1 Chile: Supervision of Prepayment Scheme 16

2.2 Mexico: Supervision of Health Insurance Entities 17

3.1 IAIS Licensing Principles 27

3.2 South Africa and Slovenia: Standards for Brokers, Agents, and Intermediaries 28

3.3 Philippines and Brazil: Reporting Requirements 30

3.4 Mexico and India: Unearned Premium Reserves 36

3.5 EU Solvency Margin Requirements 37

3.6 Australia: Requirements for Internal Risk-Management Oversight 40

3.7 Chile: Management of Investment Risk 41

3.8 Common Forms of Reinsurance Agreements 43

3.9 Fit-and-Proper Requirements in South Africa, Chile, and India 46

3.10 Examples of Punishable Actions 53

4.1 Chile: Risk Selection 58

4.2 The Continuum of Access Standards 58

4.3 New Jersey: Premium Loss Ratios 65


1.1 The Role of Private Health Insurance in West European Health Systems 5

3.1 Principal Elements of Solvency Requirements 34

3.2 Examples of Minimum Initial Capital Requirements 35

4.1 Limits on Waiting Periods and Exclusions for Coverage, Selected Countries 62

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