Iowa Administrative Code › Agency 191 - Insurance Division › Insurance Coverage for Pediatric Preventive Services › Chapter 98 - Annual Financial Reporting Requirements › Rule 191-98.7 - Qualifications of Independent Certified Public Accountant

Current through Register Vol. 47, No. 3, July 24, 2024
The commissioner shall not recognize any person or firm as a
				  qualified independent certified public accountant that:
a. Is not in good standing with the AICPA and
				in all states in which the accountant is licensed to practice, or, for a
				Canadian or British company, is not a chartered accountant; or
b. Has either directly or indirectly entered
				into an agreement of indemnity or release from liability (collectively referred
				to as indemnification) with respect to the audit of the insurer.
Except as otherwise provided herein, independent certified
				  public accountants shall be recognized as qualified as long as they conform to
				  the standards of their profession, as contained in the Code of Professional
				  Ethics of the AICPA and rules and regulations and the code of ethics and rules
				  of professional conduct of the Iowa accountancy examining board, or similar
				  code.
A qualified independent certified public accountant may
				  enter into an agreement with an insurer to have disputes relating to an audit
				  resolved by mediation or arbitration. However, in the event of a delinquency
				  proceeding commenced against the insurer under Iowa Code chapter 507C, the
				  mediation or arbitration provisions shall operate at the option of the
				  statutory successor.
The lead (or coordinating) audit partner (having primary
				  responsibility for the audit) may not act in that capacity for more than five
				  consecutive years. The person shall be disqualified from acting in that or a
				  similar capacity for the same company or its insurance subsidiaries or
				  affiliates for a period of five consecutive years. An insurer may make
				  application to the commissioner for relief from the above rotation requirement
				  on the basis of unusual circumstances. This application should be made at least
				  30 days before the end of the calendar year The commissioner may consider the
				  following factors in determining if the relief should be granted:
a. Number of partners, expertise of the
				partners, or the number of insurance clients in the currently registered
				firm;
b. Premium volume of the
				insurer; or
c. Number of
				jurisdictions in which the insurer transacts business.
The insurer shall file, with its annual statement filing, the
				  approval for relief from subrule 98.7(4) with the states in which it is
				  licensed or doing business and with the NAIC. If the nondomestic state accepts
				  electronic filing with the NAIC, the insurer shall file the approval in an
				  electronic format acceptable to the NAIC.
The commissioner shall neither recognize as a qualified
				  independent certified public accountant nor accept any annual audited financial
				  report prepared in whole or in part by any natural person who:
a. Has been convicted of fraud, bribery, a
				violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.
				Sections 1961 to 1968, or any dishonest conduct or practices under federal or
				state law;
b. Has been found to
				have violated the insurance laws of this state with respect to any previous
				reports submitted under this chapter; or
c. Has demonstrated a pattern or practice of
				failing to detect or disclose material information in previous reports filed
				under the provisions of this chapter
The commissioner of insurance, under 191-Chapter 3, may hold
				  a hearing to determine whether an independent certified public accountant is
				  qualified and, considering the evidence presented, may rule that the accountant
				  is not qualified for purposes of expressing the opinion of the accountant on
				  the financial statements in the annual audited financial report made pursuant
				  to this chapter and require the insurer to replace the accountant with another
				  whose relationship with the insurer is qualified within the meaning of this
				  chapter
The commissioner shall not recognize as a qualified
				  independent certified public accountant or accept an annual audited financial
				  report prepared in whole or in part by an accountant who provides to an
				  insurer, contemporaneously with the audit, the following nonaudit
				  services:
a. Bookkeeping or other
				services related to the accounting records or financial statements of the
				insurer;
b. Financial information
				systems design and implementation;
c. Appraisal or valuation services, fairness
				opinions, or contribution-in-kind reports;
d. Actuarially oriented advisory services
				involving the determination of amounts recorded in the financial statements.
				The accountant may assist an insurer in understanding the methods, assumptions
				and inputs used in the determination of amounts recorded in the financial
				statement only if it is reasonable to conclude that the services provided will
				not be subject to audit procedures during an audit of the insurer's financial
				statements. An accountant's actuary may also issue an actuarial opinion or
				certification ("opinion") on an insurer's reserves if the following conditions
				have been met:
(1) Neither the accountant nor
				the accountant's actuary has performed any management functions or made any
				management decisions;
(2) The
				insurer has competent personnel (or engages a third-party actuary) to estimate
				the reserves for which management takes responsibility; and
(3) The accountant's actuary tests the
				reasonableness of the reserves after the insurer's management has determined
				the amount of the reserves;