California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3.3 - Annual Financial Reporting › Section 2309.2 - Purpose and Scope

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The purpose of these regulations is to improve surveillance
					 by the California Department of Insurance 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
					 2309.3) shall be subject to these
					 regulations; however, insurers having direct premiums written in this state of
					 less than $1,000,000 in any calendar year and fewer than 1,000 policyholders or
					 certificate holders of direct written policies nationwide at the end of the
					 calendar year shall be exempt from these regulations for the year (unless the
					 commissioner makes a specific finding that compliance is necessary for the
					 commissioner to carry out statutory responsibilities) except that insurers
					 having 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
					 reports 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
					 2309.4 through
					 2309.13 of these regulations
					 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 the
				  other state are filed with the commissioner in accordance with the filing dates
				  specified in Sections
				  2309.4,
				  2309.11 and
				  2309.12, respectively (Canadian
				  insurers may submit accountants' reports as filed with the Office of the
				  Superintendent of Financial Institutions, Canada).
(b) A copy of any Notification of Adverse
				  Financial Condition Report filed with the other state is filed with the
				  commissioner within the time specified in Section
				  2309.10.
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.
These regulations shall not prohibit, preclude or in any
					 way limit the commissioner from ordering or conducting or performing
					 examinations of insurers under any provision of the California Insurance Code
					 or the rules, regulations, practices, and procedures of the Department of
					 Insurance.
1. New
					 article 3.3 (sections
					 2309.2-2309.20) and section filed
					 12-7-2009; operative 1-1-2010 pursuant to Government Code section
					 11343.4
					 (Register 2009, No. 50).
Note: Authority cited: Sections
						900.2 and
						925.4,
						Insurance Code. Reference: Sections
						730,
						731,
						732,
						733,
						734,
						734.1,
						735,
						735.5,
						736,
						736.5,
						737,
						900.2 and
						925.4,
						Insurance Code.