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Publisher Description

ABSTRACT Incentives to manage accounting information are examined within 63 property-liability insurance company conversions from mutual ownership to common stock charter. In the conversion process, policyholders' embedded equity claims must be valued. Since mutuals have no separately traded equity, accounting numbers are a critical input in this valuation, incentives for surplus management vary across firms; the strongest evidence of surplus management is observed among firms where the mutual's executives become the firm's principal stockholders following conversion. The evidence suggests that converting firms manage accounting information primarily by adjusting liabilities and selectively establishing investment losses--not by altering claims settlement policy.

GENRE
Business & Personal Finance
RELEASED
2004
June 1
LANGUAGE
EN
English
LENGTH
63
Pages
PUBLISHER
American Risk and Insurance Association, Inc.
SELLER
The Gale Group, Inc., a Delaware corporation and an affiliate of Cengage Learning, Inc.
SIZE
348.6
KB

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