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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

journal contribution
posted on 2008-08-01, 00:00 authored by Monica KeneleyMonica Keneley
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

Journal

Accounting history

Volume

13

Issue

3

Pagination

313 - 332

Publisher

SAGE Publications Ltd

Location

London, England

ISSN

1032-3732

eISSN

1749-3374

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2008, SAGE Publications

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