Look On the Bright Side

Rather than letting the clouds of regulation rain on their operations, insurers that look for compliance's silver lining have an opportunity to improve their business processes.

Give Me Some Money

And that's just the half of it. Fund allocation structures are also complicating an already arduous compliance process. "The persistence required to get money and do what needs to be done with strict budgets is a challenge," relates TowerGroup's Garcia. "Most financial services institutions are not organizationally equipped to deal with holistic compliance. Instead, they have it scattered throughout business silos. So even if a company has the best of intentions when it comes to compliance for business improvements, it's easier said than done without the organization in place to support a long-term vision."

But not all budgetary structures are created alike, Garcia continues. Funds for compliance sometimes are drawn from IT and other times from business lines, she explains.

But funds have not always been set aside for compliance initiatives. "When big regulations are handed down, financial institutions will sometimes call a board meeting so that funds can be requested for a project. Then business units do what they can do with that money," says TowerGroup's Garcia.

If you're part of one of the more fortunate insurance organizations that approaches compliance with an open-checkbook policy, now is definitely the time to consider your business process improvement wish list. A more challenging situation arises for IT leaders experiencing the other end of the spectrum. According to AMR's Hagerty, some companies respond to the regulatory strain by deferring existing projects.

Still, says Jennifer Toomey, director of product marketing, PeopleSoft Financial Management Solutions (Pleasanton, Calif.), more and more carriers are taking the former approach. "We've seen companies opening up more budgets for Sarbanes-Oxley compliance because they need to consolidate so that they don't have to deal with a mishmash of legacy systems," she asserts.

2 of 3