Moral hazard: Difference between revisions
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imported>Doug Williamson (Categorise page.) |
imported>Doug Williamson m (Broadened definition to reduced the specificity and used the orginal idefinition which was specific to insurance to explain the general definition see Investopedia for general points http://www.investopedia.com/terms/m/moralhazard.asp) |
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The risk that an insured may attempt to take unfair advantage of an insurer or other guarantor | The risk that a party has not entered into a contract in good faith or provided misleading information. | ||
For example an insured may attempt to take unfair advantage of an insurer or other guarantor by suppressing information relevant to the assessment of a risk or by not acting in accordance with the terms of a policy. | |||
UK pensions legislation contains a number of clauses specifically designed to reduce the risk of moral hazard. | |||
== See also == | == See also == | ||
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* [[Pension Protection Fund]] | * [[Pension Protection Fund]] | ||
[[Category: | [[Category:Risk_frameworks]] | ||
[[Category: | [[Category:Manage_risks]] | ||
Revision as of 14:06, 25 January 2014
The risk that a party has not entered into a contract in good faith or provided misleading information.
For example an insured may attempt to take unfair advantage of an insurer or other guarantor by suppressing information relevant to the assessment of a risk or by not acting in accordance with the terms of a policy.
UK pensions legislation contains a number of clauses specifically designed to reduce the risk of moral hazard.
