NAMIC Tells Regulators SOX Cost Benefit Analysis Coming in June

NAMIC Financial Regulation Manager Bill Boyd told a sub-group of solvency regulators working on applying Sarbanes-Oxley type requirements to non-public companies that he will have a cost benefit analysis study completed for presentation at the June NAIC meeting in Boston. The NAMIC study will address the business case on the utility of the Section 404 content and whether it is financially rational to impose it on mutual insurers.

The panel also heard from a mono-line public insurer FPIC based in Jacksonville, FL. FPIC presented a detailed account of what they had to do to comply with SOX requirements. Kim Thorpe, executive vice president and CFO of FPIC Insurance Group, noted in his presentation to the Subgroup that for his company costs resulting from 404 compliance were about 1.1 percent of its $236.8 million in revenue in 2004, which equated to 8.9 percent of net income. FPIC gets most of its revenue from professional liability premiums.

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