Hawaii Administrative Rules › Title 16 - DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS › Chapter 185 - ANNUAL AUDITED FINANCIAL REPORTING › Section 16-185-102 - Definitions

Current through June, 2024
As used in this chapter:
"Accountant" or "independent certified public accountant" means
				a person or accounting firm licensed in good standing with the American
				Institute of Certified Public Accountants and in all states in which the
				accountant or independent certified public accountant is licensed to practice.
				For Canadian and British companies, these terms mean a Canadian-chartered or
				British-chartered accountant.
An "affiliate" of, or person "affiliated" with a specific
				person, is one who directly or indirectly, through one or more intermediaries,
				controls or is controlled by, or is under common control with the person
				specified.
"Audit committee" means a body established by the board of
				directors of an entity for the purpose of overseeing the accounting and
				financial reporting processes of an insurer or group of insurers, the internal
				audit function of an insurer or group of insurers, if applicable, and external
				audits of financial statements of the insurer or group of insurers. The audit
				committee of any entity that controls an insurer or a group of insurers may be
				deemed to be the audit committee for one or more of these controlled insurers
				solely for the purposes of this chapter at the election of the controlling
				person as discussed in sections 16-185-103(d) and 16-185-113(g), Hawaii
				Administrative Rules. If an audit committee is not designated by the insurer,
				the insurer's entire board of directors shall constitute the audit
				committee.
"Audited financial report" means and includes those items
				specified in section 16-185-104, Hawaii Administrative Rules.
"Commissioner" or "insurance commissioner" means the Hawai`i
				insurance commissioner, unless otherwise specified.
"Division" or "insurance division" means the Hawai`i insurance
				division.
"Group of insurers" means those licensed insurers included in
				the reporting requirements of Hawai`i Revised Statutes ("HRS"), chapter
				431, article 11, or a set of insurers
				as identified by management, for the purpose of assessing the effectiveness of
				internal control over financial reporting.
"Indemnification" means an agreement of indemnity or a release
				from liability where the intent or effect is to shift or limit in any manner
				the potential liability of the person or firm for failure to adhere to
				applicable auditing or professional standards, whether or not resulting in part
				from knowing of other misrepresentations made by the insurer or its
				representatives.
"Insurer" means a licensed entity as defined in section
				431:1-202, HRS,
				and a risk retention captive insurance company as defined in section
				431:19-101,
				HRS.
"Internal audit function" means a person or persons that
				provide independent, objective, and reasonable assurance designed to add value
				and improvement to an organization's operations and accomplish its objectives
				by bringing a systematic and disciplined approach to evaluate and improve the
				effectiveness of risk management, control, and governance processes.
"Internal control over financial reporting" means a process
				effected by an entity's board of directors, management, or other personnel
				designed to provide reasonable assurance regarding the reliability of the
				financial statements, i.e., those items specified in section 16-185-104(2)
				through (7), Hawaii Administrative Rules, and includes those policies and
				procedures that:
(1) Pertain to the maintenance of records that, in reasonable
				detail, accurately and fairly reflect the transactions and dispositions of
				assets;
(2) Provide reasonable assurance that transactions are recorded
				as necessary to permit preparation of the financial statements, i.e., those
				items specified in section 16-185-104(2) through (7), Hawaii Administrative
				Rules, and that receipts and expenditures are being made only in accordance
				with authorizations of management and directors; and
(3) 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, i.e., those items specified
				in section 16-185-104(2) through (7), Hawaii Administrative Rules.
"Material weakness" has the same meaning as defined by the
				Statement on Auditing Standard 115, Communication of Internal Control Related
				Matters Identified in an Audit, as amended or replaced.
"Section 404" means section 404 of the Sarbanes-Oxley Act of
				2002 and the United States Securities and Exchange Commission's rules and
				regulations promulgated thereunder.
"Section 404 report" means management's report on "internal
				control over financial reporting" as defined by the United States Securities
				and Exchange Commission and the related attestation report of the independent
				certified public accountant.
"SOX compliant entity" means an entity that either is required
				to be compliant with or voluntarily is compliant with all of the following
				provisions of the Sarbanes-Oxley Act of 2002:
(1) The preapproval requirements of section 201 (section 10A(i)
				of the Securities Exchange Act of 1934);
(2) The audit committee independence requirements of section
				301 (section 10A(m)(3) of the Securities Exchange Act of 1934); and
(3) The internal control over financial reporting requirements
				of section 404 (item 308 of United States Securities and Exchange Commission
				Regulation S-K).