Regulators and insurance industry representatives appear to be close to a compromise on a formula for imposing stricter financial disclosure rules on mutual insurers.[@@]
Representatives from the American Council of Life Insurers, Washington, were not immediately available for comment, but David Steier, a spokesman for the Property Casualty Insurers Association of America, Des Plaines, Ill., says his group believes regulators and insurance groups have made “substantial progress” during recent negotiations.
“We are coming down to the home stretch with this proposal,” Steier says.
In recent years, insurers have resisted regulators’ efforts to make large and midsize mutual insurers comply with financial reporting rules similar to those that the Sarbanes-Oxley Act of 2002 imposes on publicly traded companies.
Last week, regulators and industry representatives met in Chicago and hammered out a compromise on the most contentious issue: A proposal to require senior mutual company executives to attest to the strength of their companies’ internal controls
The proposal would require company managers to affirm their responsibility for internal controls and the fact that those controls are effective.
In addition, companies would have to add a brief description of the basis for management’s assertions, which would be reviewed by regulators during the normal financial examination process. The proposal would not require the use of a specific internal control framework.