CRA has published a report for the Financial Services Authority on commission disclosure in the UK commercial general insurance market. CRA was asked to examine the question of whether commission transparency (or lack thereof) within the commercial general insurance market leads to market failure and whether a mandatory commission disclosure regime (as opposed to the current “on request” disclosure) would generate benefits greater than the costs of intervention.
Market expectations and security prices
Market participants use the information available to them at any given time to form expectations of the future performance of a company and a company’s stock...