NEW YORK--U.S. insurance firms expanding abroad by buying foreign companies face increasing risk of running afoul of the Federal Corrupt Practices Act, according to an executive with a major consulting firm.

Companies are moving into "nontraditional geographies" such as Brazil, Russia, India and China," and with that "comes high risks because of different value sets and traditions concerning corruption, gratuities and business practices," said Frederic R. Miller, a partner in the investigations and forensic services at PricewaterhouseCoopers.

Mr. Miller was interviewed today after a press briefing on handling international business and regulatory compliance risks at a PWC promotional event here.

Because of their expansion activities, "insurance companies face much more risk than they have in the past," said Mr. Miller, who advised that insurer "compliance programs need to be increased to meet the increased risk."

He said PWC concerns in the area have led one insurer, which he did not identify, to ask the firm for help on "how and what they should do to improve compliance to deal with anticorruption and bribery protection procedures."

Under the 1997 Foreign Corrupt Practices Act, firms are exposed to criminal and civil penalties for payments, or promises of payments, to foreign officials that could be considered bribes.

Its requirements involve:

o Prohibitions against giving money or anything of value to secure business.

o Accounting rules calling for reports to the Securities and Exchange Commission.

o Internal accounting controls to enforce corporate anticorruption directives and ensure that transactions are monitored.

According to Mr. Miller, the focus on how to vet overseas acquisitions has come as the government has ramped up activities in this area. There have been more federal investigations on this issue in the last three years than in the past 25, he said.

He noted that proscriptions on payoffs have come into play in other countries as well, which in the past allowed businesses a tax deduction for paying foreign bribes.

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