ABSTRACT
Asymmetric information problems are not, of course, limited to insurance transactions. However, it is in this context that disclosure of information has achieved particular significance and has generated innumerable cases, legislative enactments, law reform initiatives and commentary.2 This is not surprising as accurate information about prospective insureds and proposed risks underpins risk assessment and product pricing. As profits depend upon the success with which initial risk probabilities of individual transactions are forecast – in that risk portfolios are necessarily a cumulative compilation of individual deals – defining optimal rate classes as accurately as possible is a key objective of insurers.3 Accordingly, having access to accurate data about the nature of the risk to be assumed is the cornerstone on which the insurance industry is built.
