The majority of insurance companies already maintain a rigorous corporate governance model to protect the financial interests of their policyholders and shareholders. So why does the Sarbanes-Oxley act have the industry aflutter? New research from TowerGroup, a Needham, Mass.-based research and consulting firm, finds insurers are realizing that the law can serve as a catalyst for long- term financial systems architecture strategy and process improvements."The globalization of insurance and the current complex regulatory environment necessitate a systematic, integrated approach to risk management," says Cindy Saccocia, senior analyst in the Insurance practice at TowerGroup and author of the report, titled "Sarbanes-Oxley and Insurance: Requirements, Hype, and Opportunity."
"Sarbanes-Oxley regulation drives a tight alignment between top-office and daily internal control activities. It calls for improvements to financial management in areas such as risk and capital management that can enhance operational discipline and corporate governance across insurers' total operations."
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