Technical Critique

US double taxation of profits is not an issue for off-shore insurers.

There are much larger cost differences between companies' cost than within a single company because of double taxation of profits on allocated Surplus.

• If there is a single rate structure for all insurers, most will "push the wrong product" most of the time.

Applying the authors’ approach in regulation has other problems.

Diversification benefits may come from areas outside the regulator's jurisdiction.

Incentive to take on excessive risk, seeking diversification.

Circularity: Regulated profit depends on mix. Mix depends on historic profits. Historic profits reflect regulation.