North Dakota Administrative Code › Title 45 - Insurance, Commissioner of › Article 45-03 - Regulation of Insurance Companies › Chapter 45-03-20 - Annual Financial Reporting Model Regulation › Section 45-03-20-12.3 - Management's report of internal control over financial reporting

Current through Supplement No. 393, July, 2024
1. Every insurer required to file an audited
				financial report pursuant to this chapter that has annual direct written and
				assumed premiums, excluding premiums reinsured with the federal crop insurance
				corporation and federal flood program, of five hundred million dollars 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 section
				45-03-20-02. The report shall be
				filed with the commissioner along with the communication of internal
				control-related matters noted in an audit described under section
				45-03-20-10. Management's report
				of internal control over financial reporting shall be as of December
				thirty-first immediately preceding.
2. Notwithstanding the premium threshold in
				subsection 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 45-03-13.
3. An insurer or a group of
				insurers that is:
a. Directly subject to
				section 404;
b. Part of a holding
				company system whose parent is directly subject to section 404;
c. Not directly subject to section 404 but is
				a SOX-compliant entity; or
d. A
				member of a holding company system whose parent is not directly subject to
				section 404 but is a SOX-compliant entity;
may file its or its parent's section 404 report and an
				  addendum in satisfaction of this section's 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 were included in the scope of the section 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
				  subsections 2 through 7 of section
				  45-03-20-04) excluded from the
				  section 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 section 404 report, the insurer
				  or group of insurers may either file a report under this section, or the
				  section 404 report and a report under this section 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 section 404
				  report.