In this paper we want to explore an argumentative pattern that provides a normative justification for expected utility functions grounded on empirical evidence, showing how it worked in three different episodes of their development. The argument claims that we should prudentially maximize our expected utility since this is the criterion effectively applied by those who are considered wisest in making risky choices (be it gamblers or businessmen). Yet, to justify the adoption of this rule, it should be proven that this is empirically true: i.e., that a given function allows us to predict the choices of that particular class of agents. We show how expected utility functions were introduced and contested in accordance to this pattern in the 18 th century and how it recurred in the 1950s when M. Allais made his case against the neobernoullians.

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The Solvency 2 package, which went on force on January 1 st , 2016, has had strong implications on the insurance companies' market conduct, consumer relation and solvency; an ongoing process with the FSB and the IAIS due to address systemic risk is also impacting systemic insurers. These milestones of insurance regulation are aimed at solving the social cost of the failure of financial institutions, in order to prevent future crisis. The paper at hand reviews the detail of these considerable reforms and show the consistence of the whole: prevention of systemic and microeconomic risk is first seen as prevention of regulatory arbitrage with the banking sector. This thorough legal package has but a cost, not only for every firm (cost of implementation of reforms, recurring cost of compliance including direct cost of funding supervisory authorities, indirect administrative costs and cost of regulatory capital) but also for the sector as a whole. We show that most of these costs have been played down so far, since the crisis prompted the authorities to appear tough on finance and set examples. Unfortunately, costs lead to market concentration and uniformization, which have significant systemic implications. To address this issue, finance future growth, advance market integration and development, we offer some insights on simplification and focusing of insurance regulation. * 2. Market regulation Market regulation is related to business conduct, comprising both business-to-business and business-to-consumer relationships. We will review price regulation (2.1.), and explicit consumer protection (2.2.) before turning to solvency, which can be understood as a particular form of consumer protection. 2.1. Price regulations Back in the 80's or early 90's, insurance firms were in many continental European countries under close supervisory tutelage since EU Member States could introduce "laws, regulations or administrative provisions concerning, in particular, approval of general and special policy conditions, of forms (…) of premiums…" (Dir. 1988/357/EC on non-life insurance art. 18, Dir. 1990/619/EC on life insurance art. 12). The 1992 Directives terminated this "interventionist era" and abolished prior approval of prices and forms (see especially art. 39 of Dir. 1992/49/EC on non-life and art. 29 of Dir. 1992/96/EC on life insurance). By that time, 31 US States also had prior rate approval for automobile

In actuarial parlance, the price of an insurance policy is considered fair if customers bearing the same risk are charged the same price. The estimate of this fair amount hinges on the expected value obtained by weighting the different claims by their probability. We argue that, historically, this concept of actuarial fairness originates in an Aristotelian principle of justice in exchange (equality in risk). We will examine how this principle was formalized in the 16th century and shaped in life insurance during the following two hundred years, in two different interpretations. The Domatian account of actuarial fairness relied on subjective uncertainty: An agreement on risk was fair if both parties were equally ignorant about the chances of an uncertain event. The objectivist version grounded any agreement on an objective risk estimate drawn from a mortality table. We will show how the objectivist approach collapsed in the market for life annuities during the 18th century, leaving open the question of why we still speak of actuarial fairness as if it were an objective expected value.