Florida Office of Insurance Regulation Reviews Proposed Revisions to Annual Audited Financial Reports Rule
Oct 22, 2009
The Florida Office of Insurance Regulation (“OIR”) held a Rule Development Workshop on October 21, 2009 regarding proposed Rule 690-137.002 entitled “Annual Audited Financial Reports.” To view the meeting notice, click here.
Officials from both the OIR Life and Health and Property and Casualty divisions presided over yesterday’s Workshop. The OIR officials briefly explained the proposed Rule, which would implement Sarbanes-Oxley-type financial controls for certain Florida insurers similar to the National Association of Insurance Commissioners’ (“NAIC”) 2006 Model Audit Rule. As part of its insurance department accreditation process, the NAIC has given state insurance departments until 2010 to adopt the Model Audit Rule or substantially similar regulations.
During the public testimony portion of the Workshop, the OIR officials explained that the proposed Rule is not intended to require an additional annual audit for a foreign insurer if it is in substantial compliance with a Model Audit Rule from another state.
It also was suggested that the cost of financial auditing would “theoretically” decrease with the adoption of the proposed Rule, however, a cost impact is not expected.
The OIR also addressed typographical errors in the proposed Rule, noting that necessary changes would be made.
In regard to Section 17(a) in the proposed Rule that provides for circumstances warranting a exemption from compliance, Katherine Webb, representing clients of Colodny Fass, asked the OIR officials to further clarify or define the term “financial or organization hardship.” Explaining that “we’ll know it when we see it,” the officials said simply that the proposed Rule is broader in scope than the existing Rule.
The record will be open for additional written comments until November 2, 2010.
To view a comprehensive summary of proposed Rule 690-137.002, click here.
To view the October 21 meeting notice, which includes statutory references and hyperlinks to the current Rule, click here.
Colodny Fass will continue to monitor this issue and report developments as they occur.
Should you have any questions or comments, please contact Colodny Fass.
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