Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-141 - ANNUAL FINANCIAL REPORTING › Section 482-1-141-.03 - Definitions

Current through Register Vol. 42, No. 9, June 28, 2024
The following definitions shall apply for purposes of this
				chapter:
(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 Accounts (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 that 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, and audits of financial statements of the insurer
			 or group of insurers, the internal audit function of an insurer or group of
			 insurers (if applicable), and 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 this regulation at the election
			 of the controlling person. Refer to paragraph (5) of Rule
			 482-1-141-.14 for exercising this
			 election. If an Audit committee is not designated by the insurer, the insurer's
			 entire board of directors shall constitute the Audit committee.
(d) "Audit financial report" means and
			 includes those items specified in rule
			 482-1-141-.05.
(e) "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.
(f)
			 "Independent board member" has the same meaning as described in paragraph (3)
			 of Rule 482-1-141-.14.
(g) "Insurer" means a licensed insurer as
			 defined in Sections
			 27-1-2(2),
Code of Ala. 1975
, or an authorized insurer as defined
			 in Section
			 27-1-2(10),
Code of Ala. 1975
.
(h) "Group of insurers" means those licensed
			 insurers included in the reporting requirements of Section
			 27-29-1,
Code of Ala.
			 1975
, or a set of insurers as identified by management, for the
			 purpose of assessing the effectiveness of internal control over financial
			 reporting.
(i) "Internal audit
			 function" means a person or persons that 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.
(j)
			 "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 the financial statements,
			 i.e., those items specified in paragraphs (2) through (7) of Rule
			 482-1-141-.05 and includes those
			 policies and procedures that satisfy all of the following:
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
			 paragraphs (2) through (7) of Rule
			 482-1-141-.05 and that receipts
			 and expenditures are being made only in accordance with authorizations of
			 management and directors.
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
			 paragraphs (2) through (7) of Rule
			 482-1-141-.05.