What is Model Audit Rule 205?

Legal Definition
The Model Audit Rule 205, Model Audit Rule, or MAR 205 are the commonly applied terms for the Annual Financial Reporting Model Regulation. Model Audit Rule is a financial reporting regulation applicable to insurance companies, and borrows significantly from the Sarbanes Oxley Act of 2002 (see ‘key sections’ below). The Model Audit Rule is co-developed by the American Institute of Certified Public Accountants (“AICPA”) and National Association of Insurance Commissioners (“NAIC”) and issued by NAIC with revisions in 2006 and has taken effect in 2010.

The NAIC internal designation for the Annual Financial Reporting Model Regulation is MDL 205, where MDL stands for Model, and the number of the model rule is 205. Because the regulation was issued by NAIC, which is not a federal agency with direct regulatory power, its adoption is on a state-by-state basis.
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