Idaho Administrative Code › Title IDAPA 18 - Insurance, Department of › Rule 18.07.04 - ANNUAL FINANCIAL REPORTING › Section 18.07.04.021 - REQUIREMENTS FOR AUDIT COMMITTEES

Current through August 31, 2023
This section will not apply to foreign or alien insurers
				licensed in this state or an insurer that is a SOX Compliant Entity or a direct
				or indirect wholly-owned subsidiary of a SOX Compliant Entity. (3-31-22)
01.
Responsibility
. The Audit
			 committee will be directly responsible for the appointment, compensation and
			 oversight of the work of any accountant (including resolution of disagreements
			 between management and the accountant regarding financial reporting) for the
			 purpose of preparing or issuing the audited financial report or related work
			 pursuant to this chapter. Each accountant will report directly to the Audit
			 committee. (3-31-22)
02.
Corporate Membership
. Each member of the Audit committee will need
			 to be a member of the board of directors of the insurer or a member of the
			 board of directors of an entity elected pursuant to Subsection
			 021.05 and Section
			 010 of this rule.
			 (3-31-22)
03.
Independence
. In order to be considered independent for purposes
			 of Section 021, a member of the Audit
			 committee will not, other than in his capacity as a member of the Audit
			 committee, the board of directors, or any other board committee, accept any
			 consulting, advisory or other compensatory fee from the entity or be an
			 affiliated person of the entity or any subsidiary thereof. However, if law
			 requires board participation by otherwise non-independent members, that law
			 will prevail and such members may participate in the Audit committee and be
			 designated as independent for Audit committee purposes, unless they are an
			 officer or employee of the insurer or one (1) of its affiliates.
			 (3-31-22)
04.
Continuation of
			 Service
. If a member of the Audit committee ceases to be independent for
			 reasons outside the member's reasonable control, that person, with notice by
			 the responsible entity to the Director, may remain an Audit committee member of
			 the responsible entity until the earlier of the next annual meeting of the
			 responsible entity or one (1) year from the occurrence of the event that caused
			 the member to be no longer independent. (3-31-22)
05.
Controlling Person
. To
			 exercise the election of the controlling person to designate the Audit
			 committee for purposes of this rule, the ultimate controlling person will
			 provide written notice to the directors of insurance of the affected insurers.
			 Notification will be made timely prior to the issuance of the statutory audit
			 report and include a description of the basis for the election. The election
			 can be changed through notice to the Director by the insurer, which needs to
			 include a description of the basis for the change. The election will remain in
			 effect for perpetuity, until rescinded. (3-31-22)
06.
Accountant's Reports to Audit
			 Committee
. The Audit committee will require the accountant that performs
			 for an insurer any audit prescribed by this rule to timely report to the Audit
			 committee in accordance with the standards of his profession. If an insurer is
			 a member of an insurance holding company system, the reports prescribed by
			 Subsection 021.06 of this rule, may be
			 provided to the Audit committee on an aggregate basis for insurers in the
			 holding company system, provided that any substantial differences among
			 insurers in the system are identified to the Audit committee. The accountant's
			 reports need to include: (3-31-22)
a. All
			 significant accounting policies and material permitted practices;
			 (3-31-22)
b. All material
			 alternative treatments of financial information within statutory accounting
			 principles that have been discussed with management officials of the insurer,
			 ramifications of the use of the alternative disclosures and treatments, and the
			 treatment preferred by the accountant; and (3-31-22)
c. Other material written communications
			 between the accountant and the management of the insurer, such as any
			 management letter or schedule of unadjusted differences.
			 (3-31-22)