The American Council of Life Insurers has come up with an alternative proposal for regulators who want to include provisions of the Sarbanes-Oxley Act of 2002 in state insurance regulations.[@@]
Officials at the National Association of Insurance Commissioners, Kansas City, Mo., are working on amendments to the NAIC Model Audit Rule in an effort to include the same kinds of internal control and reporting requirements included in SOX.
Property-casualty insurance groups, including the National Association of Mutual Insurance Companies, Indianapolis, and the Property Casualty Insurers Association of America, Des Plaines, Ill., are expressing concern about the proposed changes.
The board of the ACLI, Washington, has developed a proposal that includes the following points:
- Current SEC registrants will be required to perform little, if any, additional work.
- Insurers will face no requirement for an external audit.
- Small companies will be exempt from most requirements.
- The decision about whether to file at the enterprise level or legal entity level will be based on management’s discretion.
==A risk-based approach to identifying scope of documentation and testing will be used.
==Companies will have plenty of time to adapt to the new rules.
The current NAIC model rule does offer an exemption for companies with $25 million in annual premium revenue or less. Regulators say they are willing to be flexible about the amount needed for an exemption.