This article investigates the impact of automobile insurance regulation on the size of the involuntary insurance market as well as the level and volatility of auto insurance loss ratios in Canada. We find that rate reduction orders, product reform and a pricing “Grid” that establishes...

In 2003, Canada's federal prudential regulator modified the capital adequacy test for property/casualty insurers to better align regulatory surplus with firm risk. We explore the impact of this change on the level and determination of insurers' surplus holdings. We find that firms have not...