410-141-5020 FINANCIAL SOLVENCY REGULATION: Annual Audited Financial Statements and Auditor’s Report (1) Annual audited financial statements shall report the financial position of the CCO as of the end of the most recent calendar year and the results of its operations, cash flows and changes in capital and surplus for the year then ended in accordance with the form and content requirements of OAR 410-141-5015. (2) The audit of the CCO’s annual financial statements shall be performed by an independent accounting firm and shall include, but not limited to: (a) A report of the independent accounting firm that meets the requirements of this section. (b) A written statement of opinion by the independent accounting firm based on the firm's audit regarding the CCO's annual financial statements. (c) A written statement of opinion by an independent actuarial firm with respect to the assumptions and methods used in determining the CCO’s loss reserves, actuarial liabilities and related items, and the consistency of those assumptions and methods with generally accepted actuarial standards and practices for such matters. (3) Each CCO required to file an annual audited financial report must register with the Authority in writing the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit. A CCO shall register under this rule on or before the later of sixty (60) days following the date on which the CCO first becomes subject to this section. (4) In addition to the requirement of OAR 410-141-5035, a CCO shall obtain a letter from the independent certified accountant retained by the CCO stating that is aware of the provisions of these rules that relate to CCO accounting and financial matters; and affirming that the accountant will express the opinion of the accountant on the financial statements in terms of their conformity with the Statutory Accounting Principles, specifying exceptions that the accountant believes appropriate. (5) If the accountant who was the CCO’s certified public accountant for the immediately preceding filed audited financial report is dismissed or resigns, the CCO shall so notify the Authority not later than the fifth business day after the dismissal or resignation. The CCO shall also do the following: (a) Notify the Authority in a separate letter, not later than the 10th business day after the date of the notice of dismissal or resignation, whether in the 24 months preceding the dismissal or resignation there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure that, if not resolved to the satisfaction of the former accountant, would have caused the former accountant to make reference to the subject matter of the disagreement in connection with the accountant's opinion. The disagreements required to be reported in response to this subsection include both those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction and are those disagreements that occur at the decision-making level, between personnel of the CCO responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. (b) Request the former accountant furnish a letter addressed to the CCO stating whether the accountant agrees with the statements contained in the CCO's letter and, if not, stating the reasons for which the accountant does not agree. (c) Furnish the Authority the letter received from the former accountant under subsection (b) of this section together with a response by the CCO to that letter. Statutory/Other Authority: ORS 413.042, 414.572, 414.591 & 414.605 Statutes/Other Implemented: ORS 414.570-414.686 & 415.001-415.430 History: DMAP 143-2024, amend filed 12/29/2024, effective 01/01/2025 DMAP 58-2019, adopt filed 12/18/2019, effective 01/01/2020