{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,10,16]],"date-time":"2026-10-16T15:52:54Z","timestamp":1792165974907,"version":"4.4.0"},"posted":{"date-parts":[[2026]]},"group-title":"SSRN","reference-count":0,"publisher":"Elsevier BV","license":[{"start":{"date-parts":[[2026,1,1]],"date-time":"2026-01-01T00:00:00Z","timestamp":1767225600000},"content-version":"unspecified","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/publicdomain\/zero\/1.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>Life insurers charge substantial markups on products that transform retirement wealth into lifetime income. This review provides a framework for organizing evidence on the demand-and supply-side forces determining U.S. annuity markups. The framework nests the statutory-capital and economic-balance-sheet theories of insurer pricing. An insurer with limited liability and franchise value sets its price, equity, and asset portfolio, so the costs of regulatory capital and of hedging are determined jointly with its solvency risk. The equilibrium markup decomposes into terms that reflect product market competition, economic balance-sheet risks, statutory capital, and adverse selection. The available evidence suggests that balance-sheet and statutory capital costs account for most of the markup, while adverse selection, measured for the pool of buyers active at posted prices, imposes a smaller burden. We examine whether existing empirical designs use appropriate discount rates for measuring markups and distinguish balance-sheet costs from statutory capital costs. We outline data and research designs that could identify these channels independently.<\/jats:p>","DOI":"10.2139\/ssrn.7618824","type":"posted-content","created":{"date-parts":[[2026,10,16]],"date-time":"2026-10-16T15:19:28Z","timestamp":1792163968000},"source":"Crossref","is-referenced-by-count":0,"title":["Life Insurer Markups: Hedging, Regulation, and Adverse Selection"],"prefix":"10.2139","author":[{"ORCID":"https:\/\/orcid.org\/0000-0001-7000-4240","authenticated-orcid":true,"given":"Nathan","family":"Foley-Fisher","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Stephane","family":"Verani","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Pei Cheng","family":"Yu","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"78","container-title":[],"original-title":[],"deposited":{"date-parts":[[2026,10,16]],"date-time":"2026-10-16T15:19:28Z","timestamp":1792163968000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.ssrn.com\/abstract=7618824"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2026]]},"references-count":0,"URL":"https:\/\/doi.org\/10.2139\/ssrn.7618824","relation":{},"subject":[],"published":{"date-parts":[[2026]]},"subtype":"preprint"}}