The NAIC’s Model Audit Rule became effective on January 1, 2010, with the actual first “round of reporting” to be submitted in 2011 for calendar year 2010. While the financial services industry as a whole was certainly in the forefront of significant activity at the federal levels last year with enactment of the Dodd-Frank bill, the insurance industry was left largely untouched by this legislation from a pure regulatory perspective.
However, that does not mean that state regulators had not been actively focused on greater transparency in the state role of insurance industry regulator. And, while much of the recent federal legislative activity was tied to and is, in part, indicative of reaction to the financial crisis, recent steps taken a few years ago by state regulators across the U.S. laid the groundwork for further solidifying financial solvency standards for the insurance industry through the adoption of revisions to the Annual Financial Reporting Model Regulation, or Model Audit Rule (MAR), by the NAIC in late 2006.
Various financial goals, including greater transparency and heightened internal audit controls within insurance companies, are expected to be realized with the full implementation of the revised Model across the states. Depending on the current expectation of adoption rates of the latest round of MAR revisions or modified versions due to state variability, most insurers will be required to comply with the additional requirements for reporting calendar year 2010 data.
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