Insurance Board meets external auditors of insurance companies

MEETING: The Insurance Board of Sri Lanka(IBSL) held its first ever joint meeting with the external auditors of the 15 registered insurance companies on April 27.

The external auditors play an important role in IBSL's regulatory oversight process since IBSL places extensive reliance on the audited financial statements of insurance companies.

Over the past year, IBSL has had an opportunity to meet external auditors of six of the insurance companies that had undergone onsite inspections using IBSL's the new risk based supervision approach. Based on the results of these IBSL onsite inspections and meetings with the external auditors, it was determined that there was a need for greater dialogue between IBSL and the external auditors.

The meeting with the external auditors covered a wide range of issues relating to the Audit of the Year end 2005 financial statements; the recently introduced additional reporting requirements for auditors; IBSL's reliance on the work of external auditors; and the nature and frequency of future IBSL communications with external auditors.

The discussions included issues relating to improving external auditors' understanding of the new and increasing IBSL reporting requirements for insurance companies that impact the work of the external auditors; the wordings of audit opinions; disclosures in the notes to the financial statements; and the need for improvements in the communications between the external auditors, actuaries, internal auditors, compliance officers and Boards/Audit Committees.

All parties found the meeting to be very useful in raising the level of awareness of current and future regulatory issues, and as means of improving auditing standards for insurance companies.

It was agreed that the external auditors would appoint a committee to address issues arising from the meeting and that IBSL would hold such joint meetings on a regular basis, a press release said.