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The law of misrepresentation is an amalgam of contract and tort; and its sources are common law, equity and statute. In England and Wales, the common law was amended by the Misrepresentation Act 1967. The general principle of misrepresentation has been adopted by the United States and other former British colonies, e.g. India.
In economics, insurance, and risk management, adverse selection is a market situation where asymmetric information results in a party taking advantage of undisclosed information to benefit more from a contract or trade.
An example of adverse selection is when people who are high-risk are more likely to buy insurance because the insurance company cannot effectively discriminate against them, usually due to lack of information about the particular individual's risk but also sometimes by force of law or other constraints.
Death spiral is a condition where the structure of insurance plans leads to premiums rapidly increasing as a result of changes in the covered population. It is the result of adverse selection in insurance policies in which lower risk policy holders choose to change policies or be uninsured. The result is that costs supposedly covered by ...
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In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs associated with that risk, should things go wrong. For example, when a corporation is insured, it may take on higher risk knowing that its insurance will pay the
Insurance fraud is any intentional act committed to deceive or mislead an insurance company during the application or claims process, or the wrongful denial of a legitimate claim by an insurance company. It occurs when a claimant knowingly attempts to obtain a benefit or advantage they are not entitled to receive, or when an insurer knowingly ...
A historic example concerns the US car industry, but the example is sharply disputed by Coase (2000). [5] Fisher Body had an exclusive contract with General Motors (GM) to supply car body parts and so Fisher Body was the only company to deliver the components according to GM's specifications.