NU Online News Service, Feb. 22, 2:35 p.m. – The New York State Insurance Department is requiring that all insurers, including health insurers and fraternal benefit societies licensed to do business in the state, give detailed information about the auditing fees, consulting fees and other fees paid to the accounting firms that audit their financial statements.
“The bankruptcy of Enron Corp. has highlighted the potential conflict of interest that arises when the independent certified public accountant engaged by a company to audit its financial statement is also providing consulting work for that entity,” Michael Moriarty, director of the New York department’s Capital Markets Bureau, writes in Circular Letter Number 7.
The department hopes more detailed disclosure rules will increase awareness of the extent of the potential conflict, Moriarty writes.
The department says affected insurers must file the report electronically, as an Excel spreadsheet attached to an e-mail message, by April 1.
Holding companies are supposed to file a single report giving information for all the affected insurers that they control.
Lawrence Weil is taking questions about the disclosure requirement for the Life Bureau, and Daniel Sheridan for the Health Bureau.
The text of the circular letter is posted at http://www.ins.state.ny.us/p0202211.htm