Reports Outline Insurance Study Results from Syracuse University (The Effect of External Monitoring On Conservative Financial Reporting In the Property-casualty Insurance Industry): Insurance

Health Policy and Law Daily

2023 MAY 15 (NewsRx) -- By a News Reporter-Staff News Editor at Health Policy and Law Daily -- New research on Insurance is the subject of a report. According to news originating from Syracuse, New York, by NewsRx correspondents, research stated, “When property-casualty (P&C) insurers understate their loss reserves, they increase the appearance of solvency. Understating loss reserves can lead to inadequate loss protection for policyholders.”

Our news journalists obtained a quote from the research from Syracuse University, “This paper investigates the effect of external monitoring by state regulators on financial reporting by P&C insurers. Specifically, we analyze whether a regulatory financial examination of P&C insurers, as mandated and conducted by state law, results in reporting more conservative loss reserve estimates. We find that P&C insurers report more conservative loss reserve estimates during and following a regulatory financial examination.”

According to the news editors, the research concluded: “Whereas past studies use audits as external monitoring events around which fluctuations in loss reserves are observed, we focus on regulatory financial examinations as external monitoring events that mitigate the use of loss reserves to manage perceptions of company health.”

This research has been peer-reviewed.

For more information on this research see: The Effect of External Monitoring On Conservative Financial Reporting In the Property-casualty Insurance Industry. AUDITING: A Journal of Practice & Theory, 2022;41(4):179-197. AUDITING: A Journal of Practice & Theory can be contacted at: Amer Accounting Assoc, 9009 Town Center Parkway, Lakewood Ranch, Fl, United States.

The news correspondents report that additional information may be obtained from Willie D. Reddic, Syracuse University, Martin J Whitman Sch Management, Lubin Sch Accounting, Syracuse, NY 13244, United States. Additional authors for this research include Jill Bisco and Kayla D. Booker.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.2308/ajpt-17-069. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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