Which of the following is a purpose of a regulatory audit?

A regulatory audit serves a critical role in ensuring that organizations comply with specific laws and regulations, particularly in specialized areas such as surplus lines insurance. The primary purpose of conducting such an audit is to verify that the business is adhering to the regulatory standards set forth by governing bodies. This includes checking for compliance with licensing requirements, reporting obligations, and other legal mandates that are essential for maintaining ethical and legal business operations in the surplus lines market.

In contrast, improving customer service practices, assessing the effectiveness of marketing strategies, and evaluating employee performance, while important for overall business operation and success, fall outside the direct objectives of a regulatory audit. These aspects focus more on operational efficiency and business growth rather than compliance with statutory requirements, which is the central aim of a regulatory audit. Thus, the emphasis on compliance within the context of surplus lines regulations underscores the importance of maintaining lawful practices in the industry.