Who typically conducts internal compliance audits?

The correct answer reflects the understanding that internal compliance audits are generally conducted by the insurance company’s own employees. These employees, specifically those in compliance or internal audit departments, are responsible for reviewing the company's adherence to applicable laws, regulations, and internal policies. Such audits help ensure the organization operates within legal frameworks and industry standards, thereby protecting the organization from potential compliance failures.

Independent third-party auditors might conduct external audits, which evaluate the company's financial statements and compliance from an outside perspective, providing objectivity but not typically focusing on internal compliance audits. Government regulators oversee and enforce compliance but do not conduct internal audits directly within companies. Insurance policyholders, while they may provide feedback or file complaints, do not play a role in conducting compliance audits.

Thus, the nature of internal compliance audits conducted by a company’s employees emphasizes the organization's proactive approach toward regulatory adherence and operational integrity.