Travelers 2006 Annual Report Download - page 257

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Management’s Report on Internal Control Over Financial Reporting
Managementof the Company is responsible for establishing and maintaining adequate internal
control over financial reporting. The Company’s internal control over financial reporting is designed to
provide reasonable assurances regarding the reliability of financial reporting and the preparation of the
consolidated financial statements of the Company in accordance with U.S. generally accepted accounting
principles. The Company’s accounting policies and internal controls over financial reporting, established
and maintained by management, are under the general oversight of the Company’s Audit Committee.
The Company’s internal control over financial reporting includes those policies and procedures that:
•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
•provide reasonable assurance that transactions arerecorded as necessary to permit preparation of
financial statements in accordance with U.S. generally accepted accounting principles, and that
receipts and expenditures are being made only in accordance with authorizations of the Company’s
management and directors; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to futureperiods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree or compliance
with the policies or procedures may deteriorate.
Management has assessed the Company’s internal control over financialreporting as of December 31,
2006. The standard measures adopted by management in making its evaluation are the measures in the
Internal-Control Integrated Framework published by the Committee of Sponsoring Organizations of the
Treadway Commission.
Based upon its assessment, management has concluded that the Company’s internal control over
financial reporting is effective at December 31, 2006, and that there were no material weaknesses in the
Company’s internal control over financial reporting as of that date.
KPMG LLP, an independent registered public accounting firm, which has audited and reported on
the consolidated financial statements contained in this Form 10-K, has issued its written attestation report
on management’s assessment of the Company’s internal control over financial reporting which follows this
report.