Regulators continue to say that stronger financial reporting requirements make good sense and that insurers should embrace a model regulation that achieves that goal.
In response, representatives of the insurance industry attending the fall meeting of the National Association of Insurance Commissioners said they would like to see good reasons offered to support the need for additional reporting requirements.
During a progress report on the Model Regulation Requiring Annual Audited Financial Reports, regulators cited two areas of the model– auditor independence and corporate responsibility–that roughly equate with requirements in Title II and Title III of the Sarbanes-Oxley Act of 2002.
Insurers were told that the total amount of direct written and assumed premium that could exempt insurers from requirements under Section 7 of the model that are focused on the qualifications of an independent certified public accountant hired by the company was being raised from $25 million to $100 million.
Specifically, insurers with under $100 million in direct and written premium could request an exemption from a requirement that a commissioner not recognize as a qualified independent public accountant, nor accept an annual audited financial report, prepared by an accountant who provides non-audit services simultaneously with audit services.