This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Google Scholar Articles by Keneley, M. Social Bookmarking                   What's this?

The curious case of the Occidental and Regal: the evolution of solvency and disclosure standards in the Australian life insurance industry

Deakin University, mkeneley{at}deakin.edu.au

In 1990, the Australian life insurance industry was rocked by a scandal that threatened to destabilize consumer confidence in the ability of insurance providers to meet policyholder liabilities. The incident highlighted the nature of the agency problems that arise when conditions of asymmetric information exist. It revealed systemic weaknesses in accounting, solvency and disclosure standards as they applied to life insurers. This article uses an evolutionary concept of agency to analyse government and industry responses to this event. It is argued that initial adaptive responses stabilized the industry and averted a more serious crisis. Longer term innovative responses led to the introduction of a new and more rigorous approach to reporting and solvency standards, which has improved information flows and agency outcomes.

Key Words: Corporate governance • directors' responsibilities • disclosure standards • life insurance • regulation • solvency

CiteULike    Connotea    Del.icio.us    Digg    Reddit    Technorati    What's this?