The National Association of Insurance Commissioners (NAIC) finalized the revisions to the Annual Financial Reporting Model Regulation (also known as “MAR” or “Model Audit Regulation”). These changes will require corporations to take an objective look at their operations to identify gaps. Namely, your business may need to revisit its corporate governance structure and examine its internal controls over financial reporting, thanks to the Sarbanes-Oxley (“SOX”) type provisions. The impact of these new requirements to the insurance industry is substantial.
In addition, this guidance has recently been supplemented by ORSA. The purpose of charging the company’s board of directors and/or senior management with conducting an ORSA is to insure that the company has developed a risk management policy that clearly identifies material risks and the amount of material risks the company is exposed to, how the company measures the amount of material risk, how the company expects to monitor, manage and mitigate those material risks and to insure that the company has communicated the risk management policy to all company management personnel so that they understand how their actions and decisions they make in executing the company’s business strategy impacts overall risk tolerance limits and economic and regulatory capital needed to continue to operate in a strong and healthy manner. WithumSmith+Brown can help clients identify and develop a sound ORSA plan.
Our Insurance Industry Services Team is at the pulse of the industry, always leading our clients to understand the timing and impacts that state and federal regulation has on their business. We want to ensure that insurance companies not only reach compliance —but have long-term outcomes of efficiency, sustainability and profitability. We have extensive experience in conducting financial examinations, market conduct reviews and demutualizations. We work in conjunction with various State Insurance Departments, and at times, on behalf of them.