State insurance regulators have plowed ahead with efforts to tighten standards for corporate governance and auditor independence, but they are taking longer to update standards for internal controls.[@@]
Panels at the National Association of Insurance Commissioners, Kansas City, Mo., are drafting revisions to Title II of the NAIC’s Model Audit Rule, which deals with auditor independence; Title III, which deals with governance; and Title IV, which deals with controls.
Talks on Title II and Title III already have produced proposals that could be incorporated into draft revisions of the Model Audit Rule, but regulators want to put those proposals on hold until panels complete work on proposed changes to Title IV, says Doug Stolte, chairman of the NAIC-American Institute of Certified Public Accountants working group and deputy commissioner of the Virginia Bureau of Insurance.
Regulators working on the revisions hope to advance all components through the NAIC together and then send a single package of changes to state legislatures, Stolte says.
Today, 39 states use laws and regulations based on the Model Audit Rule, which is formally known as the Model Regulation Requiring Annual Audited Financial Statements, to regulate insurance company financial reporting.
Regulators will be talking about the Model Audit Rule in Boston June 11-14 at the NAIC’s summer meeting.
State legislators will be talking about the model in July, during the summer meeting of the National Conference of Insurance Legislators, Troy, N.Y., in Newport, R.I.