This paper examines the relation between corporate governance and efficiency performance of public non-life insurance companies in Thailand over the period [2000][2001][2002][2003][2004][2005][2006][2007]. Data envelopment analysis is used to compute an insurer's efficiency performance including technical, allocative, cost, and revenue efficiency. We then employ truncated bootstrapped regression to test the relation between efficiency performance and corporate governance. The results show that the characteristics of corporate governance influence the efficiency performance of non-life insurers. In particular, board independence, diligence, and firm size have a positive impact on the efficiency performance of the Thai non-life insurance companies. However, audit committee size, diligence, divergence between voting rights and cash flow rights, board tenure, board age, as well as board ownership have a negative impact on the efficiency performance. Finally, our empirical evidence also indicates that there is an unclear relation between an insurer's efficiency performance and the board size, the proportion of financial expertise on an audit committee, and the board compensation.

This article examines the impact of board and finance committee characteristics on insurers' cash holdings using a sample of 1,454 U.S. stock property–liability insurer‐year observations. We focus on the roles of independent board members and independent finance committee members. Our results suggest that independent board members allow managers to hold excess cash holdings to avoid underinvestment and play a monitoring role in managers' cash spending behavior in a regulated industry. The overall findings are consistent with the independent director responsibility hypothesis, which suggests that independent directors play a monitoring role in managers' cash spending behavior and avoiding underinvestment problems.

No abstract

We examine the relation between reserve management and a set of audit committee characteristics of property-liability insurers, using reserve errors as a proxy for reserve management. We find that insurers with three audit committee characteristics have more conservative loss reserve estimations: larger audit committee size and more members with accounting expertise, and more audit committee meetings. Our results also find that three recommendations of the 1999 Blue Ribbon Committee can make corporate audit committees more effective: a minimum audit committee size, a minimum level of accounting expertise, and a minimum number of audit committee meetings. These results were obtained when we controlled for board of director characteristics, firm-specific characteristics, and Sarbanes-Oxley. Some board composition variables (e.g., director ownership) also have an impact on reserve management during our study period. The evidence overall suggests that the audit committee and some board characteristics have an impact on reserve management (earnings management) even in a regulated environment such as the insurance industry.

No abstract