Regulatory Stringency and New York Licensed Life Insurers

The regulatory stringency of New York insurance law, along with its extraterritorial application, makes it unique among state regulatory jurisdictions. This is the first study to simultaneously examine the relation between a broad array of firm-specific characteristics and the probability of being licensed in New York. We make predictions about expected characteristics of New York licensed life insurers, and then empirically test our hypotheses. The results strongly support the hypotheses. In addition, confirming the importance of extraterritorial regulation, we find very few systematic differences between domestic New York insurers and foreign New York insurers.