Oregon Administrative Rules › Chapter 836 - DEPARTMENT OF CONSUMER AND BUSINESS SERVICES, INSURANCE REGULATION › Division 11 - ANNUAL STATEMENTS AND REPORTS BY INSURERS › Section 836-011-0223 - Requirements for Audit Committee

Current through Register Vol. 63, No. 7, July 1, 2024
(1)
			 This rule does not apply to an authorized foreign or alien insurer or to an
			 insurer that is a SOX Compliant Entity or a direct or indirect wholly-owned
			 subsidiary of a SOX Compliant Entity.
(2) The audit committee shall be directly
			 responsible for the appointment, compensation and oversight of the work of an
			 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 OAR
			 836-011-0100  to 836-011-0230. Each accountant shall report directly to the
			 audit committee.
(3) 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 OAR 836-011-0224.
(4) Each member of the audit committee must
			 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 (7) of this
			 rule.
(5) To be considered
			 independent for purposes of this rule, a member of the audit committee may not
			 accept any consulting, advisory or other compensatory fee from the entity or be
			 an affiliated person of the entity or any subsidiary thereof, other than in the
			 member's capacity as a member of the audit committee, the board of directors or
			 any other board committee. However, if a law requires board participation by an
			 otherwise non-independent member, that law prevails and the member may
			 participate in the audit committee and be designated as independent for audit
			 committee purposes, unless the member is an officer or employee of the insurer
			 or one of its affiliates.
(6) If a
			 member of the audit committee ceases to be independent for a reason outside the
			 member's reasonable control, that person, with notice by the responsible entity
			 to the Director, may remain an audit committee member of the responsible entity
			 until the earlier of the date 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.
(7) To
			 exercise the election of the controlling person to designate the audit
			 committee for purposes of OAR 836-011-0100  to 836-011-0230, the ultimate
			 controlling person shall provide written notice to the Director. The notice
			 must be provided in a timely manner prior to the issuance of the statutory
			 audit report and must include a description of the basis for the election. The
			 insurer may change the election by notifying the Director. The notice to the
			 Director must include a description of the basis for the change. The election
			 remains in effect for perpetuity, until rescinded.
(8) The audit committee shall require the
			 accountant that performs for an insurer any audit required by OAR 836-011-0100  to 836-011-0230  to timely report to the Audit committee in accordance with the
			 requirements of SAS 61,
Communication with Audit Committees
,
			 or its replacement, including:
(a) All
			 significant accounting policies and material permitted practices;
(b) 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 referred by the
			 accountant; and
(c) Other material
			 written communications between the accountant and the management of the
			 insurer, such as any management letter or schedule of unadjusted
			 differences.