Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.6 - INSURANCE DEPARTMENT › Subchapter 6.6.35 - Annual Audited Reports and Establishing Accounting Practices and Procedures to Be Used in Annual Statements › Rule 6.6.3517 - MANAGEMENT'S REPORT OF INTERNAL CONTROL OVER FINANCIAL REPORTING

Current through Register Vol. 13, July 5, 2024
(1) Every insurer required to file an audited
				financial report pursuant to this subchapter that has annual direct written and
				assumed premiums, excluding premiums reinsured with the Federal Crop Insurance
				Corporation and Federal Flood Program, of $500,000,000 or more shall prepare a
				report of the insurer's or group of insurers' internal control over financial
				reporting, as these terms are defined in ARM
				6.6.3501. The report shall be filed
				with the commissioner along with the communication of internal control related
				matters noted in an audit described under ARM
				6.6.3510. Management's report of
				internal control over financial reporting shall be as of December 31
				immediately preceding.
(2)
				Notwithstanding the premium threshold in (1), 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 meets any one or more of
				the standards of an insurer deemed to be in hazardous financial condition
				pursuant to ARM
				6.6.3401 and
				6.6.3402.
(3) An insurer or a group of insurers that is
				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
				that 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 rule 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 ARM
				6.6.3504(2)(b) 
				through 6.6.3504(3) ) were
				included in the scope of the Section 404 Report. 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 ARM
				6.6.3504(2)(b) 
				through 6.6.3504(3) of
				this subsection) 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 file:
(a) a ARM
				6.6.3517 report; or
(b) the Section 404 Report and ARM
				6.6.3517 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.