Researchers from University of Melbourne Discuss Findings in Insurance (Voluntary Versus Mandatory Disclosure of Liability Insurance Coverage Limit): Insurance

2023 JUL 10 (NewsRx) -- By a News Reporter-Staff News Editor at NewsRx Policy and Law Daily -- Investigators discuss new findings in Insurance. According to news reporting originating from Melbourne, Australia, by NewsRx correspondents, research stated, “This article analyzes the disclosure of the liability insurance coverage limit and the impact of mandating disclosure of the coverage limit in a setting where voluntary disclosure of a firm’s cash flow information is subject to litigation risk and the firm has directors’ and offi-cers’ (D&O) liability insurance. Disclosure of cash flow information is costly, but disclosure of the insurance coverage limit features no direct disclosure friction.”

Our news editors obtained a quote from the research from the University of Melbourne, “We find that, when the litigation environment is weak, the usual unraveling argument applies, and the man-ager always voluntarily discloses the coverage limit in equilibrium. However, when the lit-igation environment is strong, either no coverage limit is disclosed or only sufficiently high coverage limits are disclosed in equilibrium.”

According to the news editors, the research concluded: “Further analysis shows that mandatory disclo-sure of the coverage limit increases the voluntary disclosure of cash flow information.(.”

This research has been peer-reviewed.

For more information on this research see: Voluntary Versus Mandatory Disclosure of Liability Insurance Coverage Limit. Journal of Accounting and Public Policy, 2023;42(2). Journal of Accounting and Public Policy can be contacted at: Elsevier Science Inc, Ste 800, 230 Park Ave, New York, NY 10169, USA. (Elsevier - www.elsevier.com; Journal of Accounting and Public Policy - http://www.journals.elsevier.com/journal-of-accounting-and-public-policy/)

The news editors report that additional information may be obtained by contacting Xue Jia, University of Melbourne, Melbourne, Australia.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jaccpubpol.2022.107029. 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.

(Our reports deliver fact-based news of research and discoveries from around the world.)