One way of solving welfare loss asymmetric information in insurance is to design informationally consistent contracts. When the contracts are not informationally consistent, adverse selection cause the portfolio insurance to be risky, and consequently the probability of accident and loss will be high. In this paper we investigate Iran's insurance companies, based on informaionlly consistent contracts and Jonh Raily (2001) paper. We find that there are some signals that show Iran automobile collusion contracts are not informationally consistent.
JEL Classification: G 22
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