

董監事暨重要職員責任保險對企業信用評等之影響
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We further explore the effect of normal insurance coverage (
NORMAL_DO
) and
abnormal insurance coverage (
AbnDO
) on credit ratings for firms with D&O insurance. We
predict the direction of
NormalDO
to be negative and the direction of
AbnDO
to be positive.
The evidence shows that firms with D&O insurance have better credit ratings than those
without D&O insurance (supporting H1). Further results show that D&O insurance coverage
also impacts firms’ credit ratings. If the firm purchases the appropriate (normal) D&O
insurance coverage that suits the firm’s specific characteristics and risk, it tends to have a
superior credit rating (supporting H2a). However, if the firm purchases excess (abnormal)
D&O insurance coverage that is more than the firm’s needs , it tends to have an inferior
credit rating, a fact that likely stems from opportunistic behaviors from the directors and
managers at the expense of creditors (supporting H2b).
Our study offer important contributions to this field. First, our study is the first to
investigate the effect of D&O insurance and its coverage on firms’ credit ratings as perceived
by creditors, thus filling not only the void in the existing literature on D&O insurance, but
also the scarcity of research on credit ratings. Second, we find that the purchase of D&O
insurance can reduce credit ratings as perceived by creditors, but only when it is the purchase
of excess (abnormal) D&O insurance. These findings imply that future research should
further explore the effect of D&O insurance coverage on the effectiveness of corporate
governance. Third, the results of this study also can act as a reference to security authorities
in the implementation of D&O insurance, a reference to insurance companies in decision-
making on D&O insurance, and a reference to creditors in the assessment of the effect of
D&O insurance on firms’ credit ratings.