Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 26.00 - Annual Financial Reporting For Years Ending 2010 And After › Section 26.19 - Management's Report of Internal Control over Financial Reporting

Current through Register 1525, July 5, 2024
(1) Every insurer required to file an Audited
			 financial report pursuant to
			 211 CMR 26.00 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
			 211 CMR 26.04.
The report shall be filed with the Commissioner along with the
				Communication of Internal Control Related Matters Noted in an Audit described
				under
				211
				CMR 26.12. Management's Report of Internal
				Control over Financial Reporting shall be as of December
				31st immediately preceding.
(2) Notwithstanding the premium threshold in
			 211 CMR 26.19(1), the Commissioner may require an insurer to file Management's
			 Report of Internal Control over Financial Reporting if the insurer is in any
			 risk-based capital level event, or meets any one or more of the standards of an
			 insurer deemed to be in hazardous financial condition as defined in M.G.L. c.
			 175, §§ 3A, 4, 48,180A through 180L; M.G.L. c. 175J; M.G.L. c. 176A,
			 §§ 3,18, 23, 24, 33; M.G.L. c. 176B, §§ 8, 9, 10, 13, 17,
			 21; M.G.L. c. 176D, § 11; M.G.L. c. 176E, §§ 8, 9, 10, 13, 16;
			 M.G.L. c. 176F, §§ 8, 9, 10, 13; M.G.L. c. 176G, §§ 10, 17,
			 20, 20A, 25, 29;
			 211 CMR 20.00:
Risk-based Capital (RBC) for Insurers
and
			 211 CMR 25.00:
Risk-based Capital (RBC) for Health Organization.
(3) An insurer or a Group of insurers that
			 is:
(a) Directly subject to §
			 404;
(b) Part of a holding company
			 system whose parent is directly subject to § 404;
(c) Not directly subject to § 404, but
			 is a SOX Compliant Entity; or
(d) A
			 member of a holding company system whose parent is not directly subject to
			 § 404, but is a SOX Compliant Entity; may file its or its parent's §
			 404 Report and an addendum in satisfaction of 211 CMR 26.19(3) 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
			 211 CMR
			 26.06 ) were included in the scope of the
			 § 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
			 211 CMR
			 26.06 ) excluded from the § 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 § 404 Report, the insurer or Group of
			 insurers may either file a 211 CMR 26.19 report, or the § 404 Report and a
			 211 CMR 26.19 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 § 404 Report.