The insurance industry has finally swallowed Sarbanes-Oxley. Four years after Congress imposed SOX on publicly traded companies, insurance commissioners last month approved a new auditing rule that does much the same for insurers—including privately held or mutual insurers, who until now have been exempt from SOX obligations.
Publicly held insurers have long sparred with their private and mutual brethren, complaining to regulators that the extra burden of SOX compliance costs put them at a competitive disadvantage. The mutuals—which include industry icons such as State Farm, Northwestern Mutual and New York Life—countered that industry oversight was already so strong that a SOX-like review of internal controls wasn’t necessary.
