Question

Government intervention is always required to deal with the problem of asymmetric information in insurance. True or false? Explain your answer.

Answer 1

False

Government intervention is not required to deal with the problem of asymmetric information in Insurance

• The intercession of government isn't constantly expected to manage the issue of hilter kilter data.   
• The data asymmetries, otherwise called data failure, are made when one gathering to a monetary exchange has more prominent material information contrasted with the other party.
• It typically shows when the dealer of an item or administration has more information than the purchaser, despite the fact that the converse can likewise be conceivable.   
• Greater part of the financial exchanges include data asymmetries.
• The issues of unfriendly choice, moral danger, and the head operator may happen on account of blemished and fragmented data, for example, protection advertise, old vehicle market, and wellbeing market.
• The issue of antagonistic choice can be comprehended by private creation and offer of data, monetary middle people, and guideline by government to expand the data and security total assets.
• The issue of good peril can be comprehended by creation of checking data, monetary delegates, and guideline by government to expand the data and obligation contracts.
• The issue of head specialist can be fathomed by total assets, money related delegates and checking and authorization of prohibitive agreements