Sarbanes-Oxley Casts Its Shadow On Captive Governance

The federal Sarbanes-Oxley Act isn't likely to be applied directly to captive insurers, given that its main focus is on publicly traded companies, but new regulations governing insurance entities have been inspired by Sarbanes-Oxley.

Aaron Kaslow, a partner with the law firm Muldoon Murphy Faucette & Aguggia, told an audience at the 33rd annual International Conference of the Captive Insurance Companies Association that corporate reform measures outlined by Sarbanes-Oxley are being picked up by insurance regulators. Broadly, those measures include active, objective oversight by a company's board; improved auditing processes; and expanded public disclosure. "Sarbanes-Oxley is a sweeping piece of legislation," said Kaslow. "The Securities and Exchange Commission and stock exchanges have extended the legislation's provisions. The big question is whether regulators will extend those principles to protect policyholders."

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