Insurers Spend Millions to Comply With Sarbanes-Oxley

As public companies comply with the corporate governance mandates of the Sarbanes-Oxley Act of 2002, lessons learned along the way might benefit mutual insurers.

Those that are well along the road to compliance have found that implementation costs exceed their initial estimates. A recent study by Financial Executives International found companies' total costs for first-year Section 404 compliance averaged $4.36 million, up 39% from the $3.14 million they expected to pay, based on an earlier study. The increase stems largely from a 66% rise in external costs for consulting, software and other vendors and a 58% increase in the fees charged by external auditors.

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