State regulators are preparing to consider insurance industry recommendations they were handed last week to water down proposed new internal control reporting requirements for non-public companies.
The Interested Parties Group submitted its proposals to the National Association of Insurance Commissioners panel looking at stiffening internal controls reporting on non-public companies.
The so-called Title IV subgroup will meet Nov. 7 at a city to be determined later to mull the proposals. Regulators have set the first half of next year as the target date for final approval.
The new measures are patterned after some provisions in the 2002 Sarbanes-Oxley corporate disclosure law enacted in the aftermath of the Enron and WorldCom accounting scandals.
Regulators, led by Virginia Deputy Commissioner Doug Stolte, want to impose the Sarbanes-Oxley-type measures on nonpublic companies.
The industry has vigorously fought the proposal, asserting they are meant primarily for investor and not policyholder protection.
The so-called Sec. 404 internal control proposals have been the most controversial and are described by the industry as burdensome.
The National Association of Mutual Insurance Companies opposes even the watered-down measures proposed by the other trade associations as too costly an effort for its members, even though it remains an improvement from the regulators' original proposal.
"That relaxed version still adds costs to state solvency regulation that aren't needed, based on the solvency record of mutual insurers," said William Boyd, financial regulation manager for NAMIC.
In other NAIC news:
The NAIC said it is seeking comment on a white paper it released this week on collateral requirements for non-U.S. reinsurers. Initial comments are due Nov. 11. In addition, the Reinsurance Task Force is expected to consider other comments at its Oct. 26 interim meeting in Overland Park, Kansas.
The panel is expected to review the white paper at the winter meeting in December.
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