Nebraska Administrative Code › Topic - INSURANCE, DEPARTMENT OF › Title 210 - NEBRASKA DEPARTMENT OF INSURANCE › Chapter 56 - ANNUAL AUDITED FINANCIAL REPORTS › Section 210-56-014 - Requirements for Audit committees

Current through June 17, 2024
This section shall not apply to foreign or alien Insurers
				  licensed in this state or an Insurer that is a SOX Compliant Entity or a direct
				  or indirect wholly-owned subsidiary of a SOX Compliant Entity.
014.01 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 Rule.
				Each accountant shall report directly to the Audit committee.
014.02 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 Section 015 of this Rule.
014.03
				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 Section 014.05 and Section 003.03.
014.04 In order to be considered independent
				for purposes of this section, a member of the Audit committee may not, other
				than in his or her 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 non-independent 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 an officer or employee of the Insurer or
				one of its affiliates.
014.05 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 be no longer
				independent.
014.06 To exercise the
				election of the controlling person to designate the Audit committee for
				purposes of this Rule, the ultimate controlling person shall provide written
				notice to the Directors of the affected Insurers. Notification shall be made
				timely prior to the issuance of the statutory audit report and include a
				description of the basis for the election. The election can be changed through
				notice to the Director by the Insurer, which shall include a description of the
				basis for the change. The election shall remain in effect for perpetuity, until
				rescinded.
014.07
014.07(a) The Audit committee shall require
				the accountant that performs for an Insurer any audit required by this Rule to
				timely report to the Audit committee in accordance with the requirements of SAS
				61, Communication with Audit Committees, or its replacement, including:
014.07(a)(i) All significant accounting
				policies and material permitted practices;
014.07(a)(ii) All material alternative
				treatments of financial information within statutory accounting principles that
				have been discussed with management officials of the Insurer, ramifications of
				the use of the alternative disclosures and treatments, and the treatment
				preferred by the accountant; and
014.07(a)(iii) Other material written
				communications between the accountant and the management of the Insurer, such
				as any management letter or schedule of unadjusted differences.