Connecticut Administrative Code › Title 38a - Insurance Department › 54 - Annual Audited Financial Reports › Section 38a-54-2 - Definitions

Current through July 10, 2024
As used in Sections
				38a-54-1 to
				38a-54-13,
				inclusive, of the Regulations of Connecticut State Agencies:
(a) "Accountant" or "independent certified
			 public accountant" means an independent certified public accountant or
			 accounting firm in good standing with the American Institute of Certified
			 Public Accountants (AICPA) and in all states in which he or she is licensed to
			 practice; for Canadian and British companies, it means a Canadian-chartered or
			 British-chartered accountant.
(b)
			 An "affiliate" of, or person "affiliated" with, a specific person, is a person
			 who directly, or indirectly through one or more intermediaries, controls, or is
			 controlled by, or is under common control with, the person specified.
(c) "Audit committee" means a committee (or
			 equivalent 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 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 Sections
			 38a-54-1 to
			 38a-54-14,
			 inclusive, of the Regulations of the Connecticut State Agencies at the election
			 of the controlling person in accordance with the provisions of Section
			 38a-54-11
			 a(g) of the Regulations of Connecticut State Agencies. If an audit committee is
			 not designated by the insurer, the insurer's entire board of directors shall
			 constitute the audit committee.
(d)
			 "Audited financial report" or "statutory financial statement" or "audited
			 statutory financial statement" mean and include those items specified in
			 Section
			 38a-54-4
			 of the Regulations of Connecticut State Agencies.
(e) "Business combination" means the
			 consolidation, for accounting purposes, of a corporation and one or more
			 incorporated or unincorporated businesses. In a business combination, the
			 multiple entities are considered as one entity for accounting
			 purposes.
(f) "Commissioner" means
			 the Insurance Commissioner of the State of Connecticut.
(g) "Department" or "Insurance Department"
			 means the Insurance Department of the State of Connecticut.
(h) "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 other misrepresentations made knowingly or otherwise by
			 the insurer or its representatives.
(i) "Independent board member" has the same
			 meaning as described in Section
			 38a-54-11
			 a of the Regulations of Connecticut State Agencies.
(j) "Insurer" or "Insurance Company" means an
			 insurance company, health care center or fraternal benefit society licensed by
			 the Commissioner to do business in this State.
(k) "Group of insurers" means those licensed
			 insurers included in the reporting requirements of Sections
			 38a-129
			 to
			 38a-142,
			 inclusive, of the Connecticut General Statutes, or a set of such insurers as
			 identified by management, for the purpose of assessing the effectiveness of
			 internal controls over financial reporting.
(l) "Internal audit function" means a person
			 or persons who provide independent, objective and reasonable assurance designed
			 to add value and improve an organization's operations and accomplish its
			 objectives by bringing a systematic, disciplined approach to evaluate and
			 improve the effectiveness of risk management, control and governance
			 processes.
(m) "Internal control
			 over financial reporting" means a process effected by an entity's board of
			 directors, management and other personnel designed to provide reasonable
			 assurance regarding the reliability of financial statements such as those items
			 specified in Section
			 38a-54-4
			 of the Regulations of Connecticut State Agencies and including 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 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
			 statement.