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ISSUED: 2/21/2002 FOR IMMEDIATE RELEASE

SERIO ANNOUNCES GUIDELINES ON INSURERS' DISCLOSURE OF CONSULTING WORK BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Requires Insurers To Disclose Fees to Increase Awareness of Potential Conflict of Interest

Superintendent of Insurance Gregory V. Serio today announced that the Department has issued guidance to the insurance industry concerning the disclosure of consulting work performed by independent certified public accountants (CPA) engaged to also provide an opinion on annual Financial Statements.

"The Department monitors the financial solvency of over 1,000 insurers doing business in New York. These insurers file financial statements that are required under law to be audited by independent CPA firms. The Enron situation brought to the forefront the critical need for the CPA to maintain independence and integrity when auditing financial statements," said Serio. "In view of this situation, the Department is requiring insurers to disclose fees paid for all services, both audit and consulting work, performed by the CPA engaged to audit the insurers' financial statement. This disclosure will allow assessment of any potential conflict and will assist in safeguarding New York State consumers that rely on the solvency of insurers doing business in this State."

The Department, in Circular Letter No.7, provides specific guidance to the insurance industry with regard to filing with the Department the fees incurred as a result of services performed by the insurer’s CPA.

 

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