Iowa Administrative Code › Agency 191 - Insurance Division › Insurance Coverage for Pediatric Preventive Services › Chapter 98 - Annual Financial Reporting Requirements › Rule 191-98.13 - Requirements for Audit Committees

Current through Register Vol. 47, No. 3, July 24, 2024
This rule shall not apply to foreign or alien insurers
				  licensed in this state or to an insurer that is a SOX compliant entity or a
				  direct or indirect wholly owned subsidiary of a SOX compliant entity.
(1) The audit committee shall 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 shall report directly to the audit committee.
(2) The audit committee of an insurer or
				group of insurers shall be responsible for overseeing the insurer's internal
				audit function and granting the person or persons performing the function
				suitable authority and resources to fulfill their responsibilities if required
				by rule
				191-9814.
				(505).
(3) Each member of the audit
				committee shall 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 subrule
				98.13(6).
(4) In order to be
				considered independent for purposes of this rule, a member of the audit
				committee may not, other than in the member's 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 nonindependent members, that law
				shall prevail and such members may participate in the audit committee and be
				designated as independent for audit committee purposes unless they are officers
				or employees of the insurer or one of its affiliates.
(5) 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 state, may remain an audit
				committee member of the responsible entity until the earlier of the next annual
				meeting of the responsible entity or one year from the occurrence of the event
				that caused the member to no longer be independent.
(6) To exercise the election of the
				controlling person to designate the audit committee for purposes of this
				chapter, the ultimate controlling person shall provide written notice to the
				commissioners of the affected insurers. Notification shall be made timely prior
				to the issuance of the statutory audit report and shall include a description
				of the basis for the election. The election may be changed through notice to
				the commissioner by the insurer, which shall include a description of the basis
				for the change. The election shall remain in effect for perpetuity until
				rescinded.
(7) The audit committee
				shall require the accountant that performs for an insurer any audit required by
				this chapter to timely report to the audit committee in accordance with the
				requirements of SAS 61, Communication with Audit Committees, or its
				replacement, including:
a. All significant
				accounting policies and material permitted practices;
b. All material alternative treatments of
				financial information within statutory accounting principles that have been
				discussed with management officials of the insurer, the ramifications of the
				use of the alternative disclosures and treatments, and the treatment preferred
				by the accountant; and
c. Other
				material written communications between the accountant and the management of
				the insurer, such as any management letter or schedule of unadjusted
				differences.