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 6.6.3501 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
For the purposes of this subchapter, the following terms
				  shall have the following meanings:
(1)
				"Accountant" and "independent certified public accountant" mean an independent
				certified public accountant or accounting firm in good standing with the
				American Institute of Certified Public Accountants (AICPA), and in all states
				in which they are licensed to practice; for Canadian and British companies, it
				means a Canadian-chartered or British-chartered accountant.
(2) An "affiliate" of, or person "affiliated"
				with a specific person, is a person that directly, or indirectly through one or
				more intermediaries, controls, or is controlled by, or is under common control
				with, the person specified.
(3)
				"Audit committee" means a committee (or equivalent body) established by the
				board of directors of an entity for the purpose of overseeing the accounting
				and financial reporting processes of an insurer, or group of insurers, the
				internal audit function of an insurer or group of insurers (if applicable), and
				external audits of financial statements of the insurer, or group of insurers.
				The audit committee of any entity that controls a group of insurers may be
				deemed to be the audit committee for one or more of these controlled insurers
				solely for the purposes of this regulation at the election of the controlling
				person. Refer to ARM
				6.6.3515(6)
				for exercising this election. If an audit committee is not designated by the
				insurer, the insurer's entire board of directors shall constitute the audit
				committee.
(4) "Audited financial
				report" means and includes those items specified in ARM
				6.6.3504.
(5) "Indemnification" means an agreement of
				indemnity, or a release from liability, where the intent or effect is to shift,
				or limit, in any manner the potential liability of the person, or firm, for
				failure to adhere to applicable auditing or professional standards, whether or
				not resulting in part from knowing of other misrepresentations made by the
				insurer, or its representatives.
(6) "Independent board member" has the same
				meaning as described in ARM
				6.6.3515(4).
(7) "Insurer" means an insurer as defined in
				33-1-201
				and
				33-2-1501,
				MCA, or an authorized insurer as defined in
				33-1-201,
				MCA.
(8) "Group of insurers" means
				those licensed insurers included in the reporting requirements of
				33-2-1101,
				MCA, et seq., or a subset of such insurers as identified by management for the
				purpose of assessing the effectiveness of internal controls over financial
				reporting.
(9) "Internal audit
				function" means a person or persons that provide independent, objective, and
				reasonable assurance designed to add value and improve an organization's
				operations and accomplish its objectives by bringing a systematic, disciplined
				approach to evaluate and improve the effectiveness of risk management, control,
				and governance processes.
(10)
				"Internal control over financial reporting" means a process effected by an
				entity's board of directors, management, and other personnel designed to
				provide reasonable assurance regarding the reliability of the financial
				statements, i.e., those items specified in ARM
				6.6.3504(2)(b)
				through
				6.6.3504(3),
				and includes those policies and procedures that:
(a) pertain to the maintenance of records
				that, in reasonable detail, accurately and fairly reflect the transactions and
				dispositions of assets;
(b) provide
				reasonable assurance that transactions are recorded as necessary to permit
				preparation of the financial statements, i.e., those items specified in ARM
				6.6.3504(2)(b)
				through
				6.6.3504(3),
				and that receipts and expenditures are being made only in accordance with
				authorizations of management, and directors; and
(c) provide reasonable assurance regarding
				prevention or timely detection of unauthorized acquisition, use or disposition
				of assets that could have a material effect on the financial statements, i.e.,
				those items specified in ARM
				6.6.3504(2)(b)
				through
				6.6.3504(3).