Abstract
The study presents information asymmetry characteristics in a relation between supervision institution and insurance firm, discusses reasons for this phenomenon occurring, analyses the possible effects for individual insurance firms and the entire market and also indicates the possibilities and methods for eliminating its negative consequences. Due to the fact that a supervisory on institution has access to all information regarding an insurance firm under assessment, information asymmetry in the relation between a supervisory authority and an insurance company, by definition, should not take place. However, the performed research into this phenomenon indicates that some of its symptoms can be observed, which results from imperfections ingrained in the information itself, from the cognitive limitations of supervisory institutions staff (decision makers), as well as the indirect implementation, by a supervisory institution, of the information disclosed by insurance firms on a voluntary basis. The consequences of information asymmetry may become the reason for an improperly performed assessment by the supervision authority and may influence the decisions made. [...]
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