June 12, 2006--The National Association of Insurance Commissioners ("NAIC") has amended its Model Regulation Requiring Annual Audited Financial Statements to include Sarbanes-Oxley Act requirements. The amendments relate to auditor independence, corporate governance, and internal control over financial reporting.
The adopted revisions require that insurance companies have an audit committee and indicate that some audit committee members may need to be independent from management. The adopted revisions also require that insurance companies with $500 million or more in direct and assumed premium file a report with the insurance department regarding the company's assessment of internal control over financial reporting. The exemption from internal control assessment must be filed for and received from the domiciliary insurance commissioner. The exemption may not be granted if risked-based capital levels or company actions present a financial hazard. The scheduled effective date is January 1, 2010.
For more information, please feel free to contact Mark S. Fischer at (630) 243-0117 or email MFischer@riskinc.net