An alternate proposal to impose Sarbanes Oxley Act provisions on mutual insurers, “errs in applying to mutual insurers costly and burdensome internal accounting control measures not demonstrated to preclude or materially reduce insurer failures,” according to the National Association of Mutual Insurance Companies (NAMIC).
“Fundamentally, regulation should be rational—it should fit the nature and behavior of the regulated entities—and cost no more than is necessary for that goal. This proposal fails both tests.” said NAMIC Financial Regulation Manager William D. Boyd “It was meant for public companies and it simply costs too much.”
The NAMIC comments address a Dec. 5, 2005, draft of amendments to the NAIC Model Audit Rule that embodies elements from the Sarbanes-Oxley Act of 2002. They articulate NAMIC’s continuing reservations with efforts by some state regulators to emulate Sarbanes-Oxley content. An original proposal to do so that debuted in February 2004, was succeeded by what has been called an “alternate proposal” that represents a possible compromise between regulators and parts of the insurance industry.
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