Guide to Compliance with State Audit Requirements … · NAIC’s Guide to Compliance STATE AUDIT REQUIREMENTS The NAIC has prepared this publication to assist insurers, certified

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GUIDE ��

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NAIC Guide to Compliance

with State Audit Requirements

2010

Accounting & Reporting

Accountants, members of the insurance industry and

educators will find relevant information about statutory

accounting practices and procedures.

Consumer Information

Consumers, educators and members of the insurance

industry will find important answers to common questions

in guides about auto, home, health and life insurance.

Financial Regulation

Accountants, financial analysts and lawyers will find

handbooks, compliance guides and reports on financial

analysis, state audit requirements and receiverships.

Legal

State laws, regulations and guidelines apply to members

of the legal and insurance industries.

NAIC Activities

Insurance industry members will find directories,

newsletters and reports affecting NAIC members.

Special Studies

Accountants, educators, financial analysts, members of

the insurance industry, lawyers and statisticians will find

relevant products on a variety of special topics.

Statistical Reports

Insurance industry data directed at regulators, educators,

financial analysts, insurance industry members, lawyers

and statisticians.

Supplementary Products

Accountants, educators, financial analysts, insurers,

lawyers and statisticians will find guidelines, handbooks,

surveys and NAIC positions on a wide variety of issues.

Securities Valuation Office

Provides insurers with portfolio values and procedures

for complying with NAIC reporting requirements.

White Papers

Accountants, members of the insurance industry and

educators will find relevant information on a variety of

insurance topics.

© 2010 National Association of Insurance Commissioners. All rights reserved.

ISBN: 978-1-59917-352-8

Printed in the United States of America

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mechanical, including photocopying, recording, or any storage or retrieval system, without written permission from the NAIC.

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The following companion product provides additional information on the same or similar subject matter. Many

customers who purchase the NAIC’s Guide to Compliance with State Audit Requirements also purchase the

following product:

Companion Products

Annual Financial Reporting Model Regulation (Model Audit Rule)

Improves the surveillance of the financial condition of insurers by requiring

1) annual audit of financial statements; 2) communication of internal control-

related matters noted in an audit; and 3) management's report of internal

control over financial reporting. Commonly referred to as the Model Audit Rule.

Includes updates through April 2010 (Update #91).

International orders must be prepaid, including shipping charges. Please contact an NAIC Customer Service Representative, Monday - Friday, 8:30 am - 5 pm CT.

NAIC’s Guide to Compliance

STATE AUDIT REQUIREMENTS

The NAIC has prepared this publication to assist insurers, certified public accountants, and other interested parties in complying with various state filing requirements for annual audited financial reports. These filing requirements generally provide for, among other things, specific information concerning the filing and content of audited financial reports and other related letters and reports with the state insurance department. All of the guidelines in this area have recently been significantly changed and this publication has been created to summarize these new requirements. On June 11, 2006, the NAIC membership voted to approve amendments to the Annual Financial Reporting Model Regulation (#205), commonly known as the Model Audit Rule. The purpose of this regulation is to improve a state’s surveillance of the financial condition of insurers by requiring an independent annual audit of the financial statements by Certified Public Accountants. Significant elements of this regulation are required as an accreditation standard and have been since the creation of the standards. The amendments adopted in 2006 were the result of nearly three years of continued research and discussion by financial regulators, members of industry, public accountants and representatives from trade associations. The revisions deal with primarily three areas: auditor independence, corporate governance and internal control over financial reporting. The critical new requirements associated with these revisions became effective beginning January 1, 2010 and have now been adopted by virtually all member states. Citations providing reference to each state’s statute or regulation containing the relevant provisions have been provided within the publication. The publication summarizes requirements placed on insurers and their external auditors by the Model Audit Rule and compares and contrasts the requirements included within the NAIC Model to those ultimately adopted by each NAIC member state. The summaries contained herein are not intended to be all-inclusive and should not be relied on solely in determining state-specific requirements. Where a question exists with respect to any requirement, the state’s statute or regulation should be reviewed and, where necessary, the state insurance department should be contacted. Every effort has been made to ensure the contents of this publication are complete and factually correct, but the NAIC makes no warranty as to the completeness or correctness of the information provided. All responsibility for compliance with individual state insurance codes rests solely with the insurance company and its independent auditor.

© 2010 National Association of Insurance Commissioners



TABLE OF CONTENTS

Alabama .............................................................................................................................. 1 Alaska ................................................................................................................................. 5 Arizona................................................................................................................................ 9 Arkansas.............................................................................................................................13 California ...........................................................................................................................17 Colorado.............................................................................................................................21 Connecticut ........................................................................................................................25 Delaware ............................................................................................................................29 District of Columbia ..........................................................................................................33 Florida ................................................................................................................................37 Georgia...............................................................................................................................41 Hawaii ................................................................................................................................45 Idaho ..................................................................................................................................49 Illinois ................................................................................................................................53 Indiana................................................................................................................................57 Iowa....................................................................................................................................61 Kansas ................................................................................................................................65 Kentucky............................................................................................................................69 Louisiana............................................................................................................................73 Maine .................................................................................................................................77 Maryland............................................................................................................................81 Massachusetts ....................................................................................................................85 Michigan ............................................................................................................................89 Minnesota...........................................................................................................................93 Mississippi .........................................................................................................................97 Missouri ...........................................................................................................................101 Montana ...........................................................................................................................105 Nebraska ..........................................................................................................................109 Nevada .............................................................................................................................113 New Hampshire ...............................................................................................................117 New Jersey .......................................................................................................................121 New Mexico.....................................................................................................................125

© 2010 National Association of Insurance Commissioners i



ii © 2010 National Association of Insurance Commissioners

TABLE OF CONTENTS

New York.........................................................................................................................129 North Carolina .................................................................................................................133 North Dakota....................................................................................................................137 Ohio..................................................................................................................................141 Oklahoma.........................................................................................................................145 Oregon..............................................................................................................................149 Pennsylvania ....................................................................................................................153 Puerto Rico.......................................................................................................................157 Rhode Island ....................................................................................................................161 South Carolina .................................................................................................................165 South Dakota....................................................................................................................169 Tennessee.........................................................................................................................173 Texas ................................................................................................................................177 Utah..................................................................................................................................181 Vermont ...........................................................................................................................185 Virginia ............................................................................................................................189 Washington ......................................................................................................................193 West Virginia ...................................................................................................................197 Wisconsin.........................................................................................................................201 Wyoming..........................................................................................................................205



© 2010 National Association of Insurance Commissioners 1

NAIC MODEL RULE ALABAMA

Citation Model 205 ALA. ADMIN. CODE R. 482-1-141.01 to 482-1-141.20

Applicability All licensed or authorized insurers.

All licensed insurers.

Size Exemptions Allowed for insurers having direct premiums in domestic state of < $1,000,000 in any calendar year and < 1,000 policyholders nationwide, unless reinsurance premiums assumed exceed $1,000,000.

Same as NAIC Model Audit Rule.

Exemption from Filing in Other States

Allowed if audited reports required by the domestic state are deemed substantially similar and Audited financial reports, Communication of Internal Control Related Matters Noted in an Audit, Qualification Letter, Notification of Adverse Condition, and Management’s Report of Internal Control over Financial Reporting are filed within the time specified.


Partner Rotation Partner limited to five consecutive years after which he/she cannot act in that capacity for five years. An insurer may make application to the commissioner for relief from the rotation requirement on the basis on unusual circumstances.


Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years.


Audit Committee Requirements

Every insurer required to file an annual Audited financial report shall designate a group of individuals as constituting its Audit committee. Ultimate controlling person shall provide written notice describing the basis for electing to designate a parent audit committee to serve in that function for the insurer. Audit committees are charged with specific oversight responsibilities. Audit committees for insurers with prior calendar year direct written and assumed premiums between $300 million and $500 million shall have a minimum of 50% of its members qualify as independent. Audit committees for insurers with prior calendar year direct written and assumed premiums greater than $500 million shall have a minimum of 75% of its members qualify as independent.





NAIC MODEL RULE

ALABAMA

Prohibited Services The commissioner shall not accept Audited financial reports from an accountant who provides prohibited non-audit services. Insurers having direct written and assumed premiums of less than $100,000,000 in any calendar year may request an exemption from this requirement.


Cooling-Off Period The commissioner shall not recognize a CPA as qualified to perform an audit if the insurer employs a person in a key financial position that was previously employed by the CPA firm and acted as a partner or senior manager involved in the insurer’s preceding audit. An insurer may make an application to the commissioner for relief from the requirement on the basis of unusual circumstances.


Conduct of Insurer in Preparing Required Reports

Directors and officers of insurers are required to meet minimum standards in providing information to their auditors and regulators.


Management’s Report of Internal Controls over Financial Reporting

Every insurer with direct written and assumed premiums of $500 million or more shall prepare a report. If an insurer does not exceed the premium threshold, the commissioner may still require the filing of this report if the insurer is in any RBC level event or meets any one or more of the standards of an insurer deemed to be in hazardous financial condition. An insurer may file its or its parent’s Sarbanes-Oxley Act Section 404 report along with an addendum to fulfill the filing requirement. The report shall include an assertion as to the effectiveness of internal controls over statutory financial reporting along with other significant elements. Management shall document and make available for review during the financial condition examination the basis upon which its assertion is made.


FILING DEADLINES

Audit Report June 1. The commissioner may require an insurer to file an Audited financial report earlier than June 1 with 90 days advanced notice.


Designation of Auditor Within 60 days after becoming subject to regulation.


Qualification Letter June 1.





FILING DEADLINES - NAIC MODEL RULE

ALABAMA

Awareness Letter Due date not specified.


Communication of Internal Control Related Matters Noted in an Audit

Prepared by the accountant and filed within 60 days after filing of audited financial statements; if no unremediated material weaknesses are noted, the communication should still be filed and so state. If unremediated material weaknesses are noted, the insurer is also required to provide a description of remedial actions to be taken with the filing.


Adverse Condition CPA must notify insurer within five business days; insurer shall notify Commissioner within five business days of notification.


Change in Auditor Insurer must notify Commissioner within five business days of dismissal or resignation of auditor.


Application for Relief from Partner Rotation Requirements

The application for relief from partner rotation requirements must be made at least 30 days before the end of the calendar year. If approval is granted, the insurer shall file with its annual statement filing the approval for relief with the states that it is licensed or doing business in and the NAIC.


Approval of Relief from Cooling-Off Requirements

The insurer shall file with its annual statement filing the approval for relief with all states it is licensed or doing business in and the NAIC.


Audit Committee Election Notification of the election shall be made prior to the issuance of the statutory audit report and the election shall remain in effect until rescinded.



Report shall be as of the December 31 immediately preceding and filed with the commissioner along with the Communication of Internal Control Related Matters Noted in an Audit (within 60 days of filing the audited financial statement).





This page is intentionally left blank




NAIC MODEL RULE

ALASKA

Citation Model 205

ALASKA ADMIN. CODE tit. 3 §§ 21.700 to 21.799


All authorized insurers.








Workpaper Requirements

Retained until Report of Examination covering period is issued, but no longer than seven years. Same as NAIC Model Audit Rule.







NAIC MODEL RULE

ALASKA










AS 21.09.200(i) refers to the management report in internal control over financial reporting. This section is effective 12/31/2010. Regulations are currently in the process of adoption. Per NAIC Model Audit Rule Sec. 17 G, this reporting starts with the reporting period ending 12/31/2010.

FILING DEADLINES



Designation of Auditor

Within 60 days after becoming subject to regulation. Same as NAIC Model Audit Rule.





ALASKA


















Audit Committee Election

Notification of the election shall be made prior to the issuance of the statutory audit report and the election shall remain in effect until rescinded.




Effective 12/31/2010.








NAIC MODEL RULE ARIZONA

Citation Model 205 ARIZ. REV. STAT. ANN. § 20-698 Requires compliance with NAIC Model Audit Rule.

Applicability All licensed or authorized insurers. Same as NAIC Model Audit Rule.


Same as NAIC Model Audit Rule except language exempts insurers that have either <$1,000,000 in premiums or <1,000 policyholders, rather than exempting those qualifying under both.






Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years. Same as NAIC Model Audit Rule.




NAIC MODEL RULE

ARIZONA














NAIC MODEL RULE

ARIZONA




FILING DEADLINES



Designation of Auditor Within 60 days after becoming subject to regulation. Same as NAIC Model Audit Rule.

Qualification Letter June 1. Same as NAIC Model Audit Rule.

Awareness Letter Due date not specified. Same as NAIC Model Audit Rule.






Change in Auditor Insurer must notify Commissioner within five business days of dismissal or resignation of auditor. Same as NAIC Model Audit Rule.





ARIZONA















NAIC MODEL RULE ARKANSAS

Citation Model 205 25 ARK. CODE INS. R. §§ 1-19
















NAIC MODEL RULE

ARKANSAS











FILING DEADLINES








ARKANSAS


Awareness Letter Due date not specified. Same as NAIC Model Audit Rule except that it states the awareness letter must be filed simultaneously with the designation of auditor.

























NAIC MODEL RULE CALIFORNIA

Citation Model 205

CAL. CODE. REGS. tit. 10, §§ 2309.2 to 2309.20

Applicability All licensed or authorized insurers. All insurers doing business in California subject to ICS 900.2 requirements.


Allowed for insurers having direct premiums of < $1,000,000 and < 1,000 policyholders nationwide, unless reinsurance premiums assumed exceed $1,000,000.



Not addressed.








NAIC MODEL RULE

CALIFORNIA














NAIC MODEL RULE

CALIFORNIA




FILING DEADLINES


















CALIFORNIA

















NAIC MODEL RULE COLORADO

Citation Model 205 3 COLO. CODE REGS. 3-1-4
















NAIC MODEL RULE

COLORADO











FILING DEADLINES








COLORADO



























NAIC MODEL RULE CONNECTICUT

Citation Model 205

CONN. AGENCIES REGS. §§ 38a-54-1 to 38a-54-14


















NAIC MODEL RULE

CONNECTICUT











FILING DEADLINES







CONNECTICUT
































NAIC MODEL RULE DELAWARE

Citation Model 205

301 DEL. CODE REGS. §§ 1.0 to 19.0


















NAIC MODEL RULE

DELAWARE











FILING DEADLINES









DELAWARE






























NAIC MODEL RULE DISTRICT OF COLUMBIA

Citation Model 205

D.C. CODE §§ 31-301 to 31-314


All licensed or authorized insurers.







Same as NAIC Model Audit Rule. Legislation introduced in the D.C. council includes this provision.





Legislation introduced in the D.C. council includes these provisions.




NAIC MODEL RULE DISTRICT OF COLUMBIA


Legislation introduced in the D.C. council includes this provision.









FILING DEADLINES








FILING DEADLINES - NAIC MODEL RULE DISTRICT OF COLUMBIA






























NAIC MODEL RULE FLORIDA

Citation Model 205

69O-137.002; § 624.424






Same as NAIC Model Audit Rule except Management’s report of Internal Control over Financial Reporting is not mentioned.


Same as NAIC Model Audit Rule except 7-year rotation period with 2-year cool-down.




Board of director establishes audit committee which consists of three or more directors. Statute requires all to be considered independent and free of bias. Requires every insurer subject to annual financial audit report to designate group of individuals constituting audit committee and charges them with specific oversight responsibilities. No reference to election or requirement to report basis of appointment / election.




NAIC MODEL RULE

FLORIDA

Prohibited Services The commissioner shall not accept Audited financial reports from an accountant who provides prohibited non-audit services. Insurers having direct written and assumed premiums of less than $100,000,000 in any calendar year may request and exemption from this requirement.

No provision


No provision



No provision



Provision allowing insurer to petition to Office to file it’s or it’s parent’s SOX 404 report along with addendum to fulfill the filing requirement.

FILING DEADLINES

Audit Report June 1. The commissioner may require an insurer to file and Audited financial report earlier than June 1 with 90 days advanced notice.


Designation of Auditor Within 60 days after becoming subject to regulation. By December 31st of year subject to audit.





FLORIDA





Same as NAIC Model Audit Rule except no reference to whether need to file is no weaknesses noted. It is, however, implied.

Adverse Condition CPA must notify insurer within five days; insurer shall notify Commissioner within five days of notification.


Change in Auditor Insurer must notify Commissioner within five days of dismissal or resignation of auditor. Same as NAIC Model Audit Rule.



Same as NAIC Model Audit Rule except no requirement to file with states or NAIC.



No provision


No provision


Report shall be as of the December 31 immediately preceding and filed with the commissioner along with the Communication of Internal Control Related Matters Noted in an Audit.

No provision








NAIC MODEL RULE GEORGIA

Citation Model 205

GA. COMP. R. & REGS. 120-2-60-.01 to 120-2-60-.19


















NAIC MODEL RULE

GEORGIA











FILING DEADLINES









GEORGIA






























NAIC MODEL RULE HAWAII

Citation Model 205 HAW. REV. STAT. § 431:3-302.5 and HAW. CODE R. §§ 16-185-101 to 16-185-118

Applicability All licensed or authorized insurers. All domestic insurers.





Not addressed.



Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years. For captive insurers, workpapers shall be retained for five years. All others, same as NAIC Model Audit Rule.







NAIC MODEL RULE

HAWAII











FILING DEADLINES


June 30 — captives (other than class 3); June 1 — all other insurers.







HAWAII


Statute does not mention date.







See (*) for discussion of notification of adverse condition.














* Hawaii Regulations regarding the notification of adverse condition requires Hawaiian captive insurers to notify the executive officers and the board of

directors that the captive has materially misstated its financial condition or is in adverse financial condition. The captive must then notify the Commissioner within five working days. For all insurers other than captives, the notification requirement is per the NAIC Model Audit Rule.








NAIC MODEL RULE IDAHO

Citation Model 205

IDAHO ADMIN. CODE r. 62.18.01.62.001 to 62.18.01.62.025


















NAIC MODEL RULE

IDAHO











FILING DEADLINES









IDAHO







June 1 (filed with audited financial statements).























NAIC MODEL RULE ILLINOIS

Citation Model 205

ILL. ADMIN. CODE tit. 50, §§ 925.20 to 925.200




No size exemption specified.














NAIC MODEL RULE

ILLINOIS











FILING DEADLINES









ILLINOIS







June 1 (filed with audited financial statements).



Change in Auditor Insurer must notify Commissioner within five business days of dismissal or resignation of auditor. Same as NAIC Model Audit Rule. Insurer shall also notify Director within 30 days of engaging new auditor.



















NAIC MODEL RULE INDIANA

Citation Model 205 760 IND. ADMIN. CODE §§ 1-78-1 to 1-78-18








Same as NAIC Model Audit Rule except that the partner rotation has a 7-year limitation with a 2-year cool-down period.









NAIC MODEL RULE

INDIANA











FILING DEADLINES








INDIANA




























NAIC MODEL RULE IOWA

Citation Model 205 IOWA ADMIN. CODE r. 191-98.1(505) to 191-98.20(505)
















NAIC MODEL RULE

IOWA











FILING DEADLINES








IOWA



























NAIC MODEL RULE KANSAS

Citation Model 205

KAN. ADMIN. REGS. § 40-1-37 (adopts “policy and procedure requiring annual audited financial reports” dated May 26, 2009).


All insurers.
















NAIC MODEL RULE

KANSAS











FILING DEADLINES







KANSAS





Awareness Letter Due date not specified. The CPA need only file once prior to the first audit, however, a change in auditors would necessitate a new awareness letter – per Department ruling.


























NAIC MODEL RULE KENTUCKY

Citation Model 205 806 KY. ADMIN. REGS. 3:170; KY. REV. STAT. ANN. § 304.3-180


















NAIC MODEL RULE

KENTUCKY


Kentucky has the first part of this requirement (cannot provide prohibited non-audit services), but does not have the exemption when less than $100 million in premium.









FILING DEADLINES









KENTUCKY






























NAIC MODEL RULE LOUISIANA

Citation Model 205

LA. ADMIN. CODE tit. 37 §§ 13701 to 13739


















NAIC MODEL RULE

LOUISIANA











FILING DEADLINES







LOUISIANA
































NAIC MODEL RULE MAINE

Citation Model 205 Bureau of Insurance Rule 235; ME. REV. STAT. ANN. tit. 24-A, § 221-A

Applicability All licensed or authorized insurers. All licensed insurers, HMOs, and nonprofit health plans.

Size Exemptions Allowed for insurers having direct premiums of < $1,000,000 in any calendar year and < 1,000 policyholders nationwide, unless reinsurance premiums assumed exceed $1,000,000.

Nationwide written premium plus reinsurance assumed less than $1,000,000, provided that outstanding loss reserves are less than $1,000,000. Assessment fire insurers.

Exemption Allowed if audited reports required by the domiciliary state are deemed substantially similar and Audited financial reports, Communication of Internal Control Related Matters Noted in an Audit, Qualification Letter, Notification of Adverse Condition, and Management’s Report of Internal Control over Financial Reporting are filed within the time specified.

Substantially similar to NAIC Model Audit Rule, but must file if requested by Superintendent.



Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years. Retained for a minimum of six years. Extended to seven years if Report of Examination is still outstanding after six years.




NAIC MODEL RULE

MAINE














NAIC MODEL RULE

MAINE




FILING DEADLINES

Audit Report June 1. The commissioner may require an insurer to file an Audited financial report earlier than June 1 with 90 days’ advance notice.







At same time as designation of auditor.



June 1.


CPA shall immediately notify all Board of Directors and the Superintendent upon detection.





MAINE








Filing with NAIC, same as in Model Audit Rule. Additional filing with other states, only if required by their law.




When required, report shall be as of the December 31 immediately preceding and filed with the commissioner along with the Communication of Internal Control Related Matters Noted in an Audit (within 60 days of filing the audited financial statement).





NAIC MODEL RULE MARYLAND

Citation Model 205

MD. CODE REGS. 31.05.11.1 to 31.05.11.17
















NAIC MODEL RULE

MARYLAND











FILING DEADLINES


Same as NAIC Model Audit Rule except that non-profit health service plans and dental plan organizations have deadlines of March 1 and April 1, respectively. Also, no provision for Commissioner being able to require early filing with 90-day notice.





MARYLAND


Qualification Letter June 1. Same as NAIC Model Audit Rule though deadline is based on deadline for the audit report.


























NAIC MODEL RULE MASSACHUSETTS

Citation Model 205

211 MASS. CODE REGS. 26.00


All insurers.
















NAIC MODEL RULE

MASSACHUSETTS











FILING DEADLINES









MASSACHUSETTS







Same as NAIC Model Audit Rule























NAIC MODEL RULE MICHIGAN

Citation Model 205

MICH. COMP. LAWS §§ 500.1001 to 500.1033




Same as NAIC Model Audit Rule. See (*) for further size exemption.



Same as NAIC Model Audit Rule except that the submission of a Qualification Letter is not addressed.


Same as NAIC Model Audit Rule. Effective date December 23, 2008; can apply for relief to match the model’s delayed implementation.

Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years. Retained for a period of not less than five years after period reported on.




NAIC MODEL RULE

MICHIGAN














NAIC MODEL RULE

MICHIGAN




FILING DEADLINES




















MICHIGAN












* Domestic insurers transacting business only in Michigan that have direct premiums of less than $10,000,000 in any year, write or assume reinsurance for only

property-based coverage, and are not part of an insurance holding company system whose members have total direct written premiums of more than $10,000,000 in any year.




NAIC MODEL RULE MINNESOTA

Citation Model 205

MINN. STAT. § 60A.1291

Applicability All licensed or authorized insurers. All insurers doing business in the State of Minnesota.
















NAIC MODEL RULE

MINNESOTA











FILING DEADLINES









MINNESOTA































NAIC MODEL RULE MISSISSIPPI

Citation Model 205

MISS. CODE ANN. §§ 83-5-101 to 83-5-125






Only Management’s Report of Internal Control over Financial Reporting is exempted.










NAIC MODEL RULE

MISSISSIPPI


Same as NAIC Model Audit Rule except no provision for petitioning for relief from this provision.









FILING DEADLINES








MISSISSIPPI















Same as NAIC Model Audit Rule except no NAIC reference.













NAIC MODEL RULE MISSOURI

Citation Model 205

MO. REV. STAT. §§ 375.1025 to 375.1062


All certified or authorized insurers.





Same as NAIC Model Audit Rule, except that the submission of a CPA Qualification Letter is not addressed.











NAIC MODEL RULE

MISSOURI











FILING DEADLINES









MISSOURI






























NAIC MODEL RULE MONTANA

Citation Model 205

MONT. ADMIN. R. 6.6.3501 to 6.6.3521


All licensed or authorized insurers.















NAIC MODEL RULE

MONTANA











FILING DEADLINES








MONTANA



























NAIC MODEL RULE NEBRASKA

Citation Model 205 210 NEB. ADMIN. CODE §§ 56-001 to 56-019


















NAIC MODEL RULE

NEBRASKA











FILING DEADLINES









NEBRASKA






























NAIC MODEL RULE NEVADA

Citation Model 205 LCB File No. R205-08 (adopted but not yet codified)

Applicability All licensed or authorized insurers. All authorized insurers.
















NAIC MODEL RULE

NEVADA











FILING DEADLINES









NEVADA






























NAIC MODEL RULE NEW HAMPSHIRE

Citation Model 205 N.H. ADMIN. R. INS. §§ 4501.01 to 4501.17


















NAIC MODEL RULE

NEW HAMPSHIRE











FILING DEADLINES









NEW HAMPSHIRE






























NAIC MODEL RULE NEW JERSEY

Citation Model 205 N.J. ADMIN. CODE §§ 11:2-26.1 to 11:2-26.21







Allowed if audited reports are deemed substantially similar and audit report is filed with Commissioner along with other required reports.







NAIC MODEL RULE

NEW JERSEY



Some provisions same as NAIC Model Audit Rule. However, New Jersey rule does not contain similar premium thresholds. Audit committee requirements do not apply to a domestic insurer if the person controlling the insurer is an entity having a BOD and committees that substantially meet the requirements. The board of directors shall establish one or more committees, including an audit committee comprised solely of directors who are not officers, employees of the insurer or any related entity, or under common control or owners of a controlling interest of any such entity.








NAIC MODEL RULE

NEW JERSEY







FILING DEADLINES
















NEW JERSEY







Same as NAIC Model Audit Rule except upon notice of not being qualified as an independent CPA, the insurer may within 20 days request review.





Same as NAIC Model Audit Rule. The BOD shall establish a committee of entirely independent members.







NAIC MODEL RULE NEW MEXICO

Citation Model 205

N.M. CODE R. §§ 13.2.5.2 to 13.5.2.27









Partner limited to five consecutive years after which he/she cannot act in that capacity for two years.









NAIC MODEL RULE

NEW MEXICO







No specific provision.




FILING DEADLINES









NEW MEXICO






























NAIC MODEL RULE NEW YORK

Citation Model 205 N.Y. COMP. CODES R. & REGS. tit. 11 §§ 89.0 to 89.16

Applicability All licensed or authorized insurers. Insurers, fraternal benefit societies and managed care organizations.


No provision.






Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years. For six calendar years from the date of the audit report or until the filing of the report on examination covering the period of the audit, whichever is longer.




NAIC MODEL RULE

NEW YORK



Same as NAIC Model Audit Rule. Does not apply to a domestic life insurer subject to Insurance Law 1202(b)(2); a foreign or alien insurer not entered into this state through a U.S. branch; or a company that is a SOX compliant entity or a wholly-owned subsidiary of a SOX compliant entity.











NAIC MODEL RULE

NEW YORK



Contains provisions similar to the NAIC Model Audit Rule. Does not contain provision regarding RBC level.

FILING DEADLINES


Audited financial reports shall be filed on or before May 31; on or before April 1 for MCOs. See N.Y. COMP. CODES R. & REGS. tit. 11 § 89.2 for locations to submit filings.

Designation of Auditor Within 60 days after becoming subject to regulation. March 1, 2010 and updated information within 60 days of any change thereafter.

Qualification Letter June 1. No provision.







NEW YORK



Shall submit report to the superintendent as part of filing of the annual audited financial report.


Shall be required to report, in writing, to the superintendent, the board of directors and the company’s audit committee within 5 days.










Shall give notice of the election of its audit committee within 30 days of the effective date of this provision (provisions apply beginning with the reporting period ending December 31, 2010) and within 30 days of any change in membership of the audit committee.



Shall be filed with the audited financial report.




NAIC MODEL RULE NORTH CAROLINA

Citation Model 205 N.C. GEN. STAT. §§ 58-10-185 to 58-10-265


















NAIC MODEL RULE

NORTH CAROLINA











FILING DEADLINES







NORTH CAROLINA
































NAIC MODEL RULE NORTH DAKOTA

Citation Model 205 N.D. ADMIN. CODE 45-03-20.01 to 45-03-20.17

Applicability All licensed or authorized insurers. All licensed insurers other than those licensed exclusively in North Dakota.
















NAIC MODEL RULE

NORTH DAKOTA











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NORTH DAKOTA




























NAIC MODEL RULE OHIO

Citation Model 205

OHIO ADMIN. CODE 3901:1-50


















NAIC MODEL RULE

OHIO









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OHIO

























NAIC MODEL RULE OKLAHOMA

Citation Model 205

OKLA. STAT. tit. 36 §§ 311A.1- 311A.20



















NAIC MODEL RULE

OKLAHOMA









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OKLAHOMA


























NAIC MODEL RULE OREGON

Citation Model 205

OR. ADMIN. R. 836-011-0100 to 836-011-0235


















NAIC MODEL RULE

OREGON









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OREGON

























NAIC MODEL RULE PENNSYLVANIA

Citation Model 205

31 PA. CODE §§ 147.1 to 147.15










Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years. Same as NAIC Model Audit Rule; except that requires retention for at least 7 years after period reported on in audit report.







NAIC MODEL RULE

PENNSYLVANIA


Same as NAIC Model Audit Rule; with the exception of broader scope for prohibited actuarial advisory services.









FILING DEADLINES









PENNSYLVANIA
















Same as NAIC Model Audit Rule except that it states no later than April 1 of the year filed.











NAIC MODEL RULE PUERTO RICO

Citation Model 205

RULE 14-A




Insurers having premiums less than $100,000 in any year or less than 1,000 policyholders.



No provision.


No provision.

Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years. Not less than 5 years after period covered in report.



No provision.




NAIC MODEL RULE

PUERTO RICO


No provision.


No provision.



No provision.



No provision.

FILING DEADLINES


Shall file on or before June 30.


Within 30 days.





PUERTO RICO

Qualification Letter June 1. Shall be filed with annual audited report.


No provision.



No provision.


Insurer shall notify Commissioner within 5 days; no requirement for CPA.

Change in Auditor Insurer must notify Commissioner within five business days of dismissal or resignation of auditor. No provision.



No provision.



No provision.


No provision.



No provision.








NAIC MODEL RULE RHODE ISLAND

Citation Model 205

27 R.I. CODE R. §§ 87-001 to 87-020


















NAIC MODEL RULE

RHODE ISLAND









FILING DEADLINES









FILING DEADLINES - NAIC MODEL RULE RHODE ISLAND
















Report shall be as of the December 31 immediately preceding and filed with the commissioner along with the Communication of Internal Control Related Matters Noted in an Audit(within 60 days of filing the audited financial statement).









NAIC MODEL RULE SOUTH CAROLINA

Citation Model 205

S.C. CODE ANN. REGS. 69-70




















NAIC MODEL RULE

SOUTH CAROLINA









FILING DEADLINES













SOUTH CAROLINA


























NAIC MODEL RULE SOUTH DAKOTA

Citation Model 205

S.D. Codified Laws §§ 58-43-1 to 58-43-26




















NAIC MODEL RULE

SOUTH DAKOTA









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SOUTH DAKOTA


























NAIC MODEL RULE TENNESSEE

Citation Model 205 TENN. COMP. R. & REGS. 0780-01-65-.01 to 0780-01-65-.20













Same as NAIC Model Audit Rule except that the first clause, ‘every insurer that is required to file an annual Audited financial report shall designate a group of individuals as constituting its Audit committee’, is omitted.




NAIC MODEL RULE

TENNESSEE











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TENNESSEE



























NAIC MODEL RULE TEXAS

Citation Model 205

I.C. §§ 401.001 – 401.021

Applicability All licensed or authorized insurers. Insurers and HMOs


Same as model except no 1,000 policyholders reference.



Required to file with commissioner 1. audited financial report, 2. qualification letter, 3. communication of internal control related matters noted in audit, 4. notification of any adverse conditions. Management’s report of internal control not necessary to file if requirements of domestic state are substantially similar to requirements of TX.








NAIC MODEL RULE

TEXAS




Prohibited Services The commissioner shall not accept Audited financial reports from an accountant who provides prohibited non-audit services. Insurers having direct written and assumed premiums of less than $100,000,000 in any calendar year may request and exemption from this requirement.



Same as NAIC Model Audit Rule 1-year cooling-off period







NAIC MODEL RULE

TEXAS




FILING DEADLINES

Audit Report June 1. The commissioner may require an insurer to file and Audited financial report earlier than June 1 with 90 days advanced notice.


Designation of Auditor Within 60 days after becoming subject to regulation. Not later than Dec. 31 of the year covered by the audit report.





TEXAS


Awareness Letter Due date not specified. Not later than Dec. 31 (filed with Designation of Auditor letter).



Same as NAIC Model Audit Rule except no ‘shall still file if no weaknesses’ language.

Adverse Condition CPA must notify insurer within five days; insurer shall notify Commissioner within five days of notification. CPA shall immediately notify the insurer; insurer shall notify the Commissioner within five days of notification.

Change in Auditor Insurer must notify Commissioner within five days of dismissal or resignation of auditor.











Report shall be as of the December 31 immediately preceding and filed with the commissioner along with the Communication of Internal Control Related Matters Noted in an Audit.





NAIC MODEL RULE UTAH

Citation Model 205

UTAH ADMIN. CODE r. 590-254-1 to 590-254-21


















NAIC MODEL RULE

UTAH











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UTAH






























NAIC MODEL RULE VERMONT

Citation Model 205

1-2009-06 VT. CODE R. §§ 1-20


















NAIC MODEL RULE VERMONT









FILING DEADLINES









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NAIC MODEL RULE VIRGINIA

Citation Model 205

14 VA. ADMIN. CODE §§ 5-270-10 to 5-270-180










Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years. Same as NAIC Model Audit Rule, except Section 13A is not included.







NAIC MODEL RULE

VIRGINIA











FILING DEADLINES


Domestic insurers — June 1; Foreign and alien insurers — June 30.






FILIING DEADLINES - NAIC MODEL RULE

VIRGINIA


Filed with audit report.

Awareness Letter Due date not specified. Within 60 days after becoming subject to the state’s audit requirement.


























NAIC MODEL RULE WASHINGTON

Citation Model 205

WASH. ADMIN. CODE §§ 284-07-100 to 284-01-240


















NAIC MODEL RULE

WASHINGTON











FILING DEADLINES









WASHINGTON






























NAIC MODEL RULE WEST VIRGINIA

Citation Model 205

W. VA. CODE §§ 33-33-1 to 33-33-16
















NAIC MODEL RULE

WEST VIRGINIA


Same as NAIC Model Audit Rule except uses $1,000,000 instead of $100,000,000 threshold.









FILING DEADLINES








WEST VIRGINIA



























NAIC MODEL RULE WISCONSIN

Citation Model 205 WIS. ADMIN. CODE INS. §§ 50-1 to 50-19






Allowed if audited reports required by the domestic state are deemed substantially similar and Audited financial reports, Communication of Internal Control Related Matters Noted in an Audit, Qualification Letter, and Notification of Adverse Condition. are filed within the time specified.

Same as NAIC Model Audit Rule, except no requirement that foreign insurer has filed Management’s Report of Internal Control over Financial Reporting in time specified.



Workpaper Requirements Retained until Report of Examination covering period is issued, but no longer than seven years. Same as NAIC Model Audit Rule, except for definition of workpapers.







NAIC MODEL RULE

WISCONSIN











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WISCONSIN






























NAIC MODEL RULE WYOMING

Citation Model 205

Wyo. Stat. Ann. §§ 26-3-301 to 26-3-317

Applicability All licensed or authorized insurers. All insurers as defined in W.S. 26-1-102(a)(xvi).












Audit committees for insurers with prior calendar year direct written and assumed premiums of $500 million or less shall have a majority of its members qualify as independent. This provision does not apply to foreign or alien insurers licensed in the state or an insurer that is a SOX compliant entity or a direct or indirect wholly-owned subsidiary of a SOX compliant entity.




NAIC MODEL RULE

WYOMING

Prohibited Services The commissioner shall not accept Audited financial reports from an accountant who provides prohibited non-audit services. Insurers having direct written and assumed premiums of less than $100,000,000 in any calendar year may request ad exemption from this requirement.










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WYOMING



























GCA- ZU- 10

Formed in 1871, the National Association of Insurance

Commissioners (NAIC) is a voluntary organization of the chief

insurance regulatory officials of the 50 states, the District of

Columbia and five U.S. territories. The NAIC has three offices:

Executive Office, Washington, D.C.; Central Office, Kansas

City, Mo.; and Securities Valuation Office, New York City.

The NAIC serves the needs of consumers and the industry,

with an overriding objective of supporting state insurance reg-

ulators as they protect consumers and maintain the financial

stability of the insurance marketplace.

For more information, visit www.naic.org.

Documents

Guide to Compliance with State Audit Requirements … · NAIC’s Guide to Compliance STATE AUDIT REQUIREMENTS The NAIC has prepared this publication to assist insurers, certified