Friday, March 08, 2002

ACCOUNTING STATEMENT INSURANCE II: My spidey-sense detects a few problematic issues with this proposal. Of course, they probably emanate from the penumbra of my ignorance about accounting, insurance, and finance. So, from both humility and fear of ridicule, I shall not pose criticisms but questions: (1) much of, maybe most of securities litigation is for fraud, right? Will insurers insure against that kind of intentional tort? (2) liability in securities litigation is huge and unpredictiable, right? Would insurers be willing or able to insure against a risk of such magnitude and unpredictability? (3) If this is such a great idea, how come insurers haven't been offering it for years?

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