[mspecter]

>"Insured" can be interpreted very broadly; moral hazard is whenever the negative outcomes of a risky decision are directed away from oneself.

Nope! That's called an externality. A moral hazard is a type of externality, but is very focused on a particular set of instances in the definition I provided.

[ABCLAW]

My comment used the term in the exact manner described by the comment you're replying to, to describe a state of affairs whereby incentives are systemically perverse because risk is not properly allocated.

A recent review I looked through indicates that the term has been historically used for different purposes in economics, insurance and probability literature. If the language of externalities is easier to understand for you, feel free to mentally substitute it in.

I could have couched the comment in the language of externalities and made a similar point, but it would lose the rhetorical flourish of hinting that legislatures themselves discount risk associated with their actions (or lack thereof).