Steve Johnson, deputy insurance commissioner for Pennsylvania, who chairs the so-called Title IV subgroup of the panel looking at applying federal Sarbanes-Oxley Act disclosure and accounting rules for non-public insurers, said at the meeting in Orlando, Fla., that it was doubtful that a cost-benefit analysis could be applied to addition of such rules.

Title IV refers to the section of the federal law that requires yearly annual assessment by management of the company's internal control measures, along with a separate attestation by the company's auditors.

"How can it be a bad thing to have management make representations about internal controls?" Mr. Johnson asked.

Mr. Johnson, who comes from a state where a number of major insolvencies have occurred in recent years, has been one of the more vocal advocates of stricter solvency regulation.

For more than a year, regulators have been looking at imposing Sarbanes-Oxley requirements on non-public, for the most part, mutual insurance companies, to provide more transparency in an effort to stave off insolvencies.

The industry has said that such new rules would be a costly burden for companies that are already the target of strict solvency regulation.

William Boyd, financial regulation manager for the National Association of Mutual Insurance Companies, said he sees some inclination of the regulators to compromise after the Title IV group meeting last week.

"But they will have to be pushed kicking and screaming to such resolution," he said.

The current premium level for companies to be exempt from such regulation is $25 million. Mr. Boyd called that a "strong candidate for liberalization."

Mr. Johnson said the committee will first look at management assessment of internal controls before tackling the issue of whether or not independent auditor assessment will be required. He also said the premium level exemption figure will be up for negotiation.

Final adoption by the NAIC was set for sometime next year. But Mr. Johnson said those portions dealing with auditor and audit committee independence may gain full approval first while the thornier issue of internal control assessment is discussed.