The Sarbanes-Oxley Act grabbed corporate America by its lapels and shook it, but after a few years of understanding what SOX is all about, U.S. insurers are returning much of their compliance attention to state regulators.

Clearly, SOX was important in the world of financial reporting for compliance, states Ellen Walsh, partner in the risk and regulatory practice of Pricewaterhouse-Coopers. SOX helped shed light on the importance of having a solid compliance program across the business, particularly for large life insurance companies that are beholden to a number of different regulators.

In addition to the departments of insurance in all 50 states, if carriers are selling security products, they need to comply with the NASD rules in terms of their broker/dealer operations as well as the SEC rules on variable insurance products and the underlying funds that support them, explains Walsh. "Insurance companies, especially on the life side, continue to be required to be in compliance with a whole host of very different regulations," she says. "It can be managed, but what we are seeing is the cumulative effect of the whole host of regulatory requirements is forcing companies to step back and ask, 'Are we approaching all this in the best way we can?'"