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NAMIC Addresses NCOIL Committee Regarding Sarbanes-Oxley Issue
Testimony highlights tools states have now
INDIANAPOLIS (July 19, 2004) - As part of a discussion held during the National Conference of Insurance Legislators' recent Summer meeting in Chicago, NAMIC State Affairs Director Neil Alldredge told NCOIL members that states have a complete arsenal of financial regulatory tools that makes extension of federal Sarbanes-Oxley corporate governance standards unnecessary.
"Legislators should feel very comfortable with the state of financial regulation as it already exists. State regulators have tools that are more comprehensive than those found in Sarbanes-Oxley requirements," Alldredge said during a meeting of the NCOIL Financial Services Committee.
Insurance companies are already subject to a host of financial regulations geared toward ensuring solvency, which "should be the primary focus of insurance policymakers, not the requirements found in the Sarbanes-Oxley legislation," according to Alldredge.
"Sarbanes-Oxley is intended to protect investors not policyholders. Policymakers need to understand this distinction and why it is important," Alldredge continued. "NAMIC members support sound corporate governance practices and believe that those practices can be found in the current financial regulatory scheme but a blanket application of Sarbanes-Oxley requirements in the name of consumer protection does not make sense in this context. Consumers are already protected and would ultimately bear the cost of new, redundant regulation," Alldredge said.
He said that NAMIC will work with NCOIL member legislators to help determine the effectiveness of present state financial solvency regulation as well as identify potential weaknesses related to consumer protection.
For further information contact:
Robert Detlefsen at rdetlefsen@namic.org
or (317) 875-5250
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