Impact of corporate governance practices (rn 518/22) on the solvency of mid-sized health insurance providers in Brazil

Abstract

In January 2019, ANS published NR 443/2019, replaced by Normative Resolution 518/2022, which established corporate governance practices with an emphasis on internal controls and risk management to improve the solvency of health insurance companies. The aim of the research was to assess whether the regulation contributes to improving the solvency of health insurance companies. Documentary research was used as a methodological tool, analyzing accounting information extracted from the ANS database for the period from 2014 to 2022. The methodology was quantitative, employing statistical analysis in three stages: the first consisted of descriptive analysis using the main measures of position and dispersion of consolidated financial results; the second, application of the nonparametric Mann-Whitney test individually and for all health insurance companies; and the third stage involved cluster analysis using the K-Means method for both types of health insurance companies, with and without a positive result after regulation was issued. The study was applied to 38 medium-sized health insurance companies, which were obliged to report the practices described in the regulation to the ANS for the base date of December 31st, 2020. The study found that the resolution influenced improving solvency in general for all 38 operators analyzed, as well as improving economic and financial indicators. More specifically, it observed a positive relationship in the solvency of 15 of the 38 operators analyzed, around 40% of the sample. The study's contribution indicates that corporate governance practices contribute to the solvency and financial performance of health insurance companies.