보험산업의 이익조정 연구*: RBC비율을 중심으로

This paper examines whether earnings management within insurance companies occurs to increase RBC rates and whether firms in the range just above the 150% RBC rate tend to manage their earnings more to avoid the regulated violation than firms in other ranges. This paper further examines whether earnings management of insurance companies increases after the adoption of risk-based capital rate(RBC rate) system. RBC rate has been used to control the financial stability of insurance companies in Korea. The results of this study are as follows. First, we are not able to find evidence that insurance companies manage earnings using discretionary bad debts expenses to increase RBC rate. Second, the results show that insurance companies in an RBC range between 150% and 160% are more likely to manage earnings than companies in other ranges. This result is consistent with the expectation that firms in the range of little more than 150% RBC rate manange earnings to meet a regulatory requirement. Third, we also find that earnings management using discretionary bad debts expenses decreases after the adoption of the RBC regulation. This result suggests that after the adoption of RBC regulation in April 2009, attention from various interested parties to RBC has increased and, therefore, the likelihood of earnings management has decreased. This paper suggests that financial statements users and regulators pay a greater attention to those firms that barely exceed 150% RBC rates.