Nearly 90% of CFOs believe that the cost of compliance with Sarbanes-Oxley (SOX) outweighs the benefits, according to the latest survey from the Tillinghast business of Stamford, Conn.-based Towers Perrin.
“This underscores a key problem area for insurers,” notes Jack Gibson, managing principal for the firm’s North American life insurance practice. “We are five years past the implementation of SOX and companies still don’t feel the benefits justify the costs, and instead, believe that larger business issues and challenges are being neglected.”
Though most are dissatisfied with the cost of compliance, nearly three-quarters think external reporting has improved since SOX implementation, but only 8% believe the improvement has been significant.
The survey engages North American life insurance companies and their CFOs three times per year. It focused on companies’ views of performance and risk management reporting, as well as their recent SOX experience.
The survey indicates that, although companies have made significant strides in their risk reporting, many still have concerns related to their companies’ ability to effectively report risk, as well as the potential impact of such reporting on ratings and capital requirements.
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