Evolving Audit Committee Standards for Texas Insurers

Effective January 1, 2010, the National Association of Insurance Commissioners (NAIC) adopted the Annual Financial Reporting Model Regulations (Model Audit Rule), which among other requirements, substantially expanded the role of board of director audit committees in the oversight of insurance company financial reporting, auditor qualifications and independence, corporate governance and internal control reporting. The Model Audit Rule represented a long-in-process regulatory shift toward best practice auditing standards modeled in large part after the practices mandated for U.S. public companies under the Sarbanes-Oxley Act of 2002 (SOX). The various states, Texas included, have in recent years adopted their own versions of the Model Audit Rule. To the boards of insurers included within a publicly traded holding company structure, many of the Model Audit Rule provisions are already institutionalized within their internal accounting and reporting procedures. (Read more)