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The curious case of the Occidental and Regal : the evolution of solvency and disclosure standards in the Australian life insurance industry
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.
History
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Accounting historyVolume
13Issue
3Pagination
313 - 332Publisher
SAGE Publications LtdLocation
London, EnglandPublisher DOI
ISSN
1032-3732eISSN
1749-3374Language
engPublication classification
C1 Refereed article in a scholarly journalCopyright notice
2008, SAGE PublicationsUsage metrics
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