The Research On The Mechanism And Prevention Of Corporate Governance Risk Of Insurance Company In China

Corporate governance is a worldwide problem. Although it appears those representative corporate governance modes, such as Anglo-American model, and German-Japanese model, corporate governance problem has not been not effectively solved, and even has intensified trend. Especially in2008, the Wall Street financial crisis, made the corporate governance of financial institutions to be received unprecedented attention. After this crisis, OECD, The World Bank, International Corporate Governance Network, Registered Association of International Accountants and national regulators all laid the crisis on the accumulation of corporate governance risk of financial institutions.Because insurance company has its characteristics, such as specialty of insurance products, high debt capital structure, dispersion of creditors and complexity of risk control, insurance company not only should consider maximizing interests for shareholders in governance goal, but also must pay special attention to protect the interests of the stakeholders such as policy holders. Therefore, relative to the common company, insurance corporate governance covers more aspects, and the requirements on main factors of governance are higher.In addition, whether shareholders’meeting, board of directors, managers and board of supervisors governance in internal governance, or market governance, intermediary management in external governance, they all have their particularity. Insurance company tries to solve the principal-agent problem between policy holders and shareholders, major shareholders and minority shareholders, shareholders and managers by the special governance structure and governance mechanism.However, in the practice of insurance corporate governance, the design of governance structure is often unreasonable, and the corporate governance mechanism is not sound. Besides, there are multiple principal-agent relationships, the information asymmetry and personal bounded rationality in insurance corporate governance. These factors make relevant actors’performance not to meet the designated position, so that the company’s operating results couldn’t reach the predetermined target, leading insurance corporate governance risk. For insurance company, corporate governance risk is different from the other risks faced in the process of operation and management activities. It has the features of foundation, which have important effects on insurance company’s business and market stability.The risk factors may exist in each link of internal governance and external governance. By discovering risk factors that may cause governance risk of insurance company in each link of corporate governance, and analyzing the forming process of the risk, we can build the risk factors index for insurance corporate governance. Therefore, this article sets up7primary evaluation indexes,19secondary evaluation indexes and69tertiary evaluation indexes based on the analysis of formation process of insurance corporate governance risk. Next, combining2012annual report of the4A-share listed insurance companies and information disclosed by CIRC, this paper analyzes the common risk factors in internal and external governance that insurance companies in our country are facing. The conclusion is that there are many corporate governance problems in insurance industry of our country.Based on the present situation of the corporate governance risk in the insurance company, it should take measures to prevent governance risk and protect benefits of stakeholders. Therefore, this paper puts forward the following suggestions:Firstly, optimize the shareholding structure, and strengthen the behavior management of major shareholders. Secondly, improve the board governance, strengthening its functions. Thirdly, design reasonable managers’ compensation, and make special post person play a better role. Fourthly, strengthen institution-building of the Supervisory Board, and ensure normalization of work. Fifthly, optimize government regulation, improving the government governance. Sixthly, cultivate and improve the external market. Seventhly, regulate intermediaries, and promote their role to play in protecting the interests of policy holders.