Moral hazard-decide whether the above policy benefits

Reference no: EM13685489

"Moral Hazard" Please responds to the following: In 2020, a leading insurance company started a policy that pays a policy holder a five percent rebate on their insurance premium in a year in which the policyholder does not file an insurance claim. For example, a household with an annual premium of $1,200 will get a $60 rebate check each year it does not file a claim. Identify what problem(s) the insurance company is trying to solve by introducing this policy. Decide whether the above policy benefits the insurance company or the policy holder. Provide support for your response.

Reference no: EM13685489

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