What is the purpose of financial reporting for insurers?
Privately-held insurers who meet a certain threshold of revenue are required to submit financial reports to their state’s insurance department. These reports provide details about the internal controls used by management for their statutory financial statements when undergoing an annual audit. Management should be able to provide an assessment of their internal controls and the effectiveness of these controls to ensure accurate financial reporting about the company’s recent fiscal year. To comply with financial reporting rules, insurers adopt the requirements stated in the Annual Financial Reporting Model Regulation, also known as the Model Audit Rule (MAR).
What is the Model Audit Rule?
The Model Audit Rule is a set of requirements used by independent auditors such as I.S. Partners, LLC to provide audit services for insurers regarding their internal controls for financial reporting. The requirements use several of the components of the Sarbanes-Oxley Act, Section 404: Management of Assessment of Internal Controls to provide an attestation report regarding management’s assertion over the effectiveness of internal controls and any issues that are disclosed about the internal controls. These standards provide the guidance which I.S. Partners, LLC follows when providing attestation reports for insurers and assisting management in asserting that appropriate controls were established and tested.
How does I.S. Partners help companies adhere to the Model Audit Rule?
I.S. Partners, LLC specializes in performing internal audit preparedness engagements for insurance companies throughout the United States, and our staff of audit professionals possesses a high degree of expertise in the areas of Sarbanes-Oxley compliance, insurance regulatory compliance, risk assessments, process documentation, control testing and validation, and the creation of effective self-assessment programs. Our comprehensive audit services ensure that controls are in place and operating effectively to meet the company’s obligations.