Publications

Other SEC Guidance

Friday, August 12, 2016

The Securities and Exchange Commission’s (SEC) Division of Investment Management staff (the Staff) has issued letters to four different groups regarding auditing standards for financial statements of insurance company depositors of variable insurance products. These letters can be accessed by clicking on the following link: http://www.sec.gov/divisions/investment/letters_audit.htm. Specifically, these letters were in response to the CAQ’s SEC Regulations Committee inquiry as to the required or permissible form of auditor’s report of insurance company depositor or sponsor financial statements included in the registration statements of variable annuity and variable life insurance contracts. The letter to the CAQ’s SEC Regulations Committee can be accessed by clicking on the following link: http://www.sec.gov/divisions/investment/aicpa030805.pdf.

The Chief Accountant of the Division of Investment Management noted in the letters that for certain insurance company depositor or sponsor financial statements included in the registration statements of variable annuity and variable life insurance contracts, the Staff will not object to audit opinions on financial statement audits conducted in accordance with either the standards of the Public Company Accounting Oversight Board (PCAOB) or generally accepted auditing standards issued by the AICPA (GAAS), until further notice. However, the Staff is currently considering whether the audits of these types of financial statements are required to be audited in accordance with PCAOB standards. During this period of consideration, the Staff will accept auditor’s reports prepared in accordance with either PCAOB standards or GAAS.

The Center for Public Company Audit Firms (Center or CAQ) suggests that you communicate the information above to the specialists in the insurance and investment management practice areas of your firms as well as those individuals in your firm responsible for establishing and disseminating policy and communications regarding auditor reporting.

If you have any questions regarding these letters, please contact the staff in the SEC Division of Investment Management at (202) 551- 6720.