The American Insurance Association reported that the Oklahoma Senate unanimously approved Senate Bill 565, which encourages insurers doing business in the state to closely examine their operations and “clean house” when necessary by allowing insurance companies to initiate internal audits.
According to the AIA, the bill will be especially valuable to carriers already domesticated in Oklahoma, and will provide incentive to companies looking to domesticate in the state.
John Marlow, assistant vice president, AIA Southwest Region, said the bill “will encourage insurers to conduct such audits without fear that their own internal improvement efforts will be used against them at some later time.”
SB 565, based on the National Conference of Insurance Legislators (NCOIL) model bill, would authorize a limited evidentiary privilege for internal audits initiated by insurance companies. This measure is very similar to the existing privilege many states recognize to encourage internal audits by businesses for compliance with environmental regulations. The environmental self-audit privilege has been on the books for many years without problems. The concept also is similar to the federal law governing internal self-audits of banks.
SB 565, sponsored by Sen. John Sparks (D), was passed by the Oklahoma Senate on March 8 by a vote of 45-0 with the title stricken from the bill. Striking the title in Oklahoma requires that the bill be automatically referred to a conference committee. The House is expected to vote on the bill in the next two weeks.
Source: AIA
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