^aSchool of Risk Management, St. John's University, 101 Murray St., Ste 503, U.S.A. E-mail: kwonw@stjohns.edu

^*This research is in part funded by the Korea Research Foundation. The authors thank anonymous reviewers for valuable comments.

Abstract

This paper deals with market exit issues in the insurance industry. It examines theoretical and practical aspects of exit regulation in insurance as well as internal and external factors that firms may use to select a market exit strategy. From comparing regulatory stringency and permitted forms of market exit in selected countries in Asia, Europe, and North America, the authors find several commonalities. That is, regulators tend to accentuate their responsibility for protecting policyholders' interests, be deeply involved in most exit processes, and prefer other forms of exit (e.g., buy-out of liabilities or a complete acquisition of business by another firm) than immediate dissolution of insurers. However, not all governments examined are ready to effectively deal with matters related to insurers' exits from the market. Some governments need better structured regulation and some transparency in market exit regulation.