During Morgan Bulkeley's tenure, Aetna became one of the first
stock insurance companies to enter the health insurance business.
In this article, we exploit this detailed information to examine how managers are monitored under different ownership structures by investigating CEO turnovers in mutual and
stock insurance companies.
While the difference between mutual and
stock insurance companies has long since blurred, it was a major point of contention in the early years of the organization.
Stock insurance companies are insurers that are publicly owned and traded on stock exchanges--just like General Motors or Procter & Gamble.
815, which affects
stock insurance companies, have been rendered moot by several laws.
Debt and equity markets reward the
stock insurance companies for their ability to acquire other companies, believe 71 percent of the industry executives surveyed.
The data on
stock insurance companies from 1943-99 is used in the estimation.
In 1899, the Indiana Compulsory Deposit Law created new rules which allowed for growth of
stock insurance companies, a fact that established the Hoosier state as a headquarters location for a number of Midwestern insurance companies in the new century.
The third piece of legislation, H.596, updates the previous law relating to the method for accomplishing mutual insurer conversions, or "demutualizations," to
stock insurance companies. The new law doesn't change any benefits, values, guaranties or premiums provided to policyholders, but it does provide the stock insurance company with greater access to capital markets as a means of strengthening the captive.
Comparing mutual companies with some 30
stock insurance companies, Komiya discovers little difference in the way they run their affairs.
Another topic which will continue to receive attention is the solvency of large
stock insurance companies. The financial health of these companies has been exacerbated by risky investment decisions, inadequate reserves and changes which force the companies to pay claims they never anticipated.
See Garven (1992) and D'Arcy and Doherty (1988, chapter 6), for general discussions of the application of contingent claims analysis to
stock insurance companies.
