Arkansas Administrative Code › Agency 054 - Arkansas Insurance Department › Rule 054.00.09-002 - Amended Rule 25: Annual Financial Reporting

Current through Register Vol. 49, No. 6, June, 2024
Section 1.
Authority
This Rule is promulgated by the Arkansas Insurance Commissioner
			 pursuant to Ark. Code Ann. §§
								25-15-201,
et seq.,
23-61-108, 23-63-216, and other provisions of the
			 Arkansas Insurance Code.
Section
		  2.
Purpose and Scope
The purpose of this Rule is to improve the Arkansas Insurance
			 Department's surveillance of the financial condition of insurers by requiring
			 (1) an annual audit of financial statements reporting the financial position
			 and the results of operations of insurers by independent certified public
			 accountants, (2) Communication of Internal Control Related Matters Noted in an
			 Audit, and (3) Management's Report of Internal Control Over Financial
			 Reporting.
Every insurer, as defined in Section 3, shall be subject to this
			 Rule. Insurers having direct premiums written in this state of less than
			 $1,000,000 in any calendar year and less than 1,000 policyholders or
			 certificate holders of direct written policies nationwide at the end of the
			 calendar year shall be exempt from this Rule for such year, unless the
			 Commissioner makes a specific finding that compliance is necessary for the
			 Commissioner to carry out his or her regulatory responsibilities. However,
			 insurers having a combined total of direct and assumed premiums pursuant to
			 contracts and/or treaties of reinsurance of $1,000,000 or more will not be so
			 exempt.
Foreign or alien insurers filing the Audited Financial Report in
			 another state, pursuant to that state's requirement for filing of Audited
			 Financial Reports, which has been found by the Commissioner to be substantially
			 similar to the requirements herein, are exempt from Sections 4 through 13 of
			 this Rule if:
A. A copy of the Audited
		  Financial Report, Communication of Internal Control Related Matters Noted in an
		  Audit, and the Accountant's Letter of Qualifications that are filed with
		  another state are filed with the Commissioner in accordance with the filing
		  dates specified in Sections 4, 11 and 12, respectively. Canadian insurers may
		  submit accountants' reports as filed with the Office of the Superintendent of
		  Financial Institutions, Canada; and
B. When applicable, a copy of any
		  Notification of Adverse Financial Condition Report filed with another state is
		  filed with the Commissioner within the time specified in Section 10.
Foreign or alien insurers required to file Management's Report of
			 Internal Control Over Financial Reporting in another state are exempt from
			 filing the Report in this state provided the other state has substantially
			 similar reporting requirements and the Report is filed with the Commissioner of
			 the other state within the time specified.
This Rule shall not prohibit, preclude or in any way limit the
			 Insurance Commissioner from ordering, conducting or performing examinations of
			 insurers under the rules of the Arkansas Insurance Department, the provisions
			 of the Arkansas Insurance Code, and the practices and procedures of the
			 Arkansas Insurance Department.