Best's Review: Auditors and Actuaries Are Gaining New Clout.

OLDWICK, N.J. -- The new regulatory scrutiny required under the federal Sarbanes-Oxley Act gives added weight to the roles auditors and actuaries play in the insurance industry, perhaps more than in any other line of business, the January issue of Best's Review reports.

Although all public companies must comply with the new accounting regulations, insurance is the only industry that markets and sells products before their final cost is known. As a result, insurers' future predictions, as well as past financial practices, must be reviewed carefully.

As part of its special coverage, Best's Review also features lists of the most-active actuaries and auditors, based on insurance filings.

Actuaries are key to many of insurers' predictions, particularly the size of reserves insurers must set aside to pay future claims. In the past, actuaries may have labored in obscurity, but because of the new regulatory scrutiny, company officers now have to understand the reserve process and the inherent risk.

Auditors' new roles include determining how closely company managers have complied with procedures for financial reporting.

While Sarbanes-Oxley does not apply to nonpublic insurance companies, the National Association of Insurance Commissioners has been discussing whether the act should be extended to apply to all forms of insurance companies, including mutuals, fraternals and captives.

Best's Review is published by A.M. Best Co. for insurance professionals, including home office executives, agents, brokers and others who are affiliated with the industry, including bankers, lawyers and educators.

The January issue also examines:

--How auto insurers are using many forms of media to build brand.

--How new reporting requirements will affect the climate for finite reinsurance.

--How the catastrophes of 2005, the limits of risk models and closer scrutiny by regulators are affecting annual negotiations for reinsurance coverage.

--The top 10 insurance news stories of 2005, based on their impact on the industry for 2006.

To read these articles and more, subscribe to Best's Review by visiting our Web site at www.bestreview.com/subscribe, calling the A.M. Best customer service department at [phone], ext. 5742, or e-mailing your request to [e-mail].

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.