Louisiana Administrative Code › Title 37 - INSURANCE › Part XIII - Regulations › Chapter 137 - Regulation Number 98-Annual Financial Reporting › Section XIII-13731 - Management's Report of Internal Control over Financial Reporting

Current through Register Vol. 50, No. 6, June 20, 2024
A. Every insurer
				required to file an audited financial report pursuant to Regulation 98 that has
				annual direct written and assumed premiums of $500,000,000 or more, excluding
				premiums reinsured with the Federal Crop Insurance Corporation and the Federal
				Flood Program, shall prepare a report of the insurer's or group of insurers'
				internal control over financial reporting, as these terms are defined in
				§13705 The report shall be filed with the commissioner along with the
				communication of internal control related matters noted in an audit described
				under §13721 management's report of internal control
				over financial reporting shall be as of December 31 immediately
				preceding.
B. Notwithstanding the
				premium threshold in Subsection A of this Section, the commissioner may require
				an insurer to file management's report of internal control over financial
				reporting if the insurer is in any RBC level event, or is deemed to be in
				hazardous financial condition.
C.
				An insurer or a group of insurers that are directly subject to Section 404;
				part of a holding company system whose parent is directly subject to Section
				404; not directly subject to Section 404 but is a SOX Compliant Entity; or a
				member of a holding company system whose parent is not directly subject to
				Section 404 but is a SOX Compliant Entity may file its or its parent's Section
				404 report and an addendum in satisfaction of this
				§13731 requirement provided that those
				internal controls of the insurer or group of insurers having a material impact
				on the preparation of the insurer's or group of insurers' audited statutory
				financial statements those items included in Section §13709. B.2 through
				§13709. B.7 of Regulation 98 were included in the scope of the Section 404
				Report.
D. The addendum shall be a
				positive statement by management that there are no material processes with
				respect to the preparation of the insurer's or group of insurers' audited
				statutory financial statements those items included in §13709. B.2 through
				§13709. B.7 of Regulation 98 excluded from the Section 404 Report. If there are
				internal controls of the insurer or group of insurers that have a material
				impact on the preparation of the insurer's or group of insurers' audited
				statutory financial statements and those internal controls were not included in
				the scope of the Section 404 Report, the insurer or group of insurers may
				either file a
				§13731 report, or the Section 404
				Report and a
				§13731 report for those internal
				controls that have a material impact on the preparation of the insurer's or
				group of insurers' audited statutory financial statements not covered by the
				Section 404 Report.
E. Management's
				Report of Internal Control over Financial Reporting shall include:
1. a statement that management is responsible
				for establishing and maintaining adequate internal control over financial
				reporting;
2. a statement that
				management has established internal control over financial reporting and an
				assertion, to the best of management's knowledge and belief, after diligent
				inquiry, as to whether its internal control over financial reporting is
				effective to provide reasonable assurance regarding the reliability of
				financial statements in accordance with statutory accounting
				principles;
3. a statement that
				briefly describes the approach or processes by which management evaluated the
				effectiveness of its internal control over financial reporting;
4. a statement that briefly describes the
				scope of work that is included and whether any internal controls were
				excluded;
5. disclosure of any
				unremediated material weaknesses in the internal control over financial
				reporting identified by management as of December 31 immediately preceding.
				Management is not permitted to conclude that the internal control over
				financial reporting is effective to provide reasonable assurance regarding the
				reliability of financial statements in accordance with statutory accounting
				principles if there is one or more unremediated material weaknesses in its
				internal control over financial reporting;
6. a statement regarding the inherent
				limitations of internal control systems; and
7. signatures of the chief executive officer
				and the chief financial officer or equivalent position/title.