Compilation of Rules and Regulations of the State of Georgia › Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER › Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE › Subject 120-2-45 - CAPTIVE INSURANCE COMPANIES › Rule 120-2-45-.09 - Captive Insurance Company Audits

Current through Rules and Regulations filed through June 27, 2024
(1) Audit Requirement. Each captive insurance
				company shall engage an independent certified public accountant authorized by
				the Commissioner to conduct a comprehensive audit and shall file such audited
				financial report with the Commissioner on or before June 30th of each year. The
				annual audit report shall be considered part of the company's annual report of
				financial condition.
(2)
				Designation of Independent Certified Public Accountant.
Within ninety (90) days of being licensed in Georgia, a
				  company shall report to the Commissioner the name of the audit partner and
				  certified public accountant that it retained to perform its annual
				  audit.
(3) Standards
				Applicable to Designated Independent Certified Public Accountant.
The Commissioner will accept an audit from the independent
				  certified public accountant subject to the conditions set forth in Regulation
				  120-2-60-.07(6).
(4) Notification of Adverse
				Financial Condition.
A company shall require the certified public accountant to
				  immediately notify in writing an officer and all members of the Board of
				  Directors of the company of any determination by the independent certified
				  public accountant that the company has materially misstated its financial
				  condition in its report to the Commissioner. The certified public accountant
				  shall furnish such notification to the Commissioner within five (5) business
				  days of the delivery of the written notice to Board of Directors.
(5) Availability and Maintenance
				of Working Papers of the Independent Certified Public Accountant.
(a) Each company shall require the
				independent certified public accountant to make available for review by the
				Commissioner or his or her appointed agent the work papers prepared in the
				conduct of the audit of the company. The company shall require that the
				independent certified public accountant retain the audit work papers for a
				period of seven (7) years or the period of time covering one (1) year prior to
				the last examination, or from the date of the organizational examination if no
				subsequent examination has been completed, whichever period is
				longer.
(b) The aforementioned
				review by the Commissioner shall be considered examination work papers and
				shall be confidential in accordance with O.C.G.A. §
										33-41-16(b). The
				company shall require that the independent certified public accountant provide
				photocopies or equivalent copy of any of the working papers which the
				Commissioner considers relevant. Such working papers may be retained by the
				Commissioner.
(c) "Work Papers" or
				"Working Papers" as referred to in this rule include, but are not limited to,
				schedules, analyses, reconciliations, abstracts, memoranda, narratives, flow
				charts, copies of company records or other documents prepared or obtained by
				the independent certified public accountant and the employees of such in the
				conduct of their examination of the company.
(d) The lead (or coordinating) audit partner
				(having primary responsibility for the audit) may not act in that capacity for
				more than five (5) consecutive years. The person shall be disqualified from
				acting in that or similar capacity for the same company or its insurance
				subsidiaries or affiliates for a period of five (5) consecutive years. An
				insurer may make application to the Commissioner for relief from the above
				rotation requirement on the basis of unusual circumstances. This application
				should be made at least thirty (30) days before the end of the calendar year.
				The Commissioner may consider the following factors in determining if the
				relief should be granted:
1.Number of
				partners, expertise of the partners or the number of insurance clients in the
				currently registered firm;
2.Premium volume of the company;
3.Number of jurisdictions in which the
				company transacts business;
4.Types
				of risks directly written;
5.Complexity of the company's operations;
				and
6.Whether the company is
				organized as a pure captive.