Recent research has examined the effect of the passage of the Financial Services Modernization Act of 1999, more commonly known as the Gramm-Leach-Bliley Act, on the market value of insurers, commercial banks, securities firms, thrifts, and finance companies. This study differs from previous research in that it examines life insurers and property-liability insurers as separate industries rather than treating them as a single industry. This study also analyzes trading volume in addition to share price reactions. Finally, this study features two variables in a cross-sectional analysis of insurer stock returns not considered in prior research. Using a generalized least squares portfolio approach and Corrado\u27s rank statistic, we find significant share price reactions to certain legislative announcements surrounding the passage of the GLB. Trading volume reactions corroborate the significant share price reactions. Our results indicate that life insurers and property-liability insurers reacted differently to enactment of the GLB. Smaller life insurers with high liquidity and high leverage had the most positive (or least negative) share price reactions of all insurers
