This research extends corporate governance literature by analyzing the impact of
corporate governance structure on the efficiency performance of insurance companies
in Taiwan. To our knowledge, we are the first to examine the effects of voting and
cash-flow right ownership on efficiency performance. Furthermore, we provide several
new contributions to insurance research by following two new perspectives. First,
under the severe regulatory requirement that holds board members fully responsible
for bankruptcies, the corporate governance system of the insurance industry in Taiwan
offers an interesting environment to explore the distinct regulatory impact on insurers’
efficiency performance. This unlimited responsibility may offer stronger support for
the effect of the board’s influence to prevent insolvency, but it also entails a trade-off
between improving efficiency and preventing insolvency. Second, insurance firms in
Taiwan have a relatively high level of ownership concentration, mostly within family group