Rhode Island Code of Regulations › Title 230 - Department of Business Regulation › Chapter 20 - Insurance › Subchapter 45 - Financial Standards and Corporate Operations › Part 7 - Annual Financial Reporting › Section 230-RICR-20-45-7.3 - Definitions

Current through June 14, 2024
A. The terms and definitions contained herein
				  are intended to provide definitional guidance as the terms are used within this
				  Regulation.
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, means a person
				  that directly, or indirectly through one (1) 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 (1) or more of these controlled insurers solely for the
				  purposes of this Regulation at the election of the controlling person. Refer to
				  §
											7.14(A)(3)   of this Part 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 §
											7.5   of this Part.
5. "Commissioner," "Commissioner of
				  Insurance" or "Insurance Commissioner" means the Director of the Department of
				  Business Regulation of this state or his or her designee.
6. "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 or other misrepresentations made by the insurer
				  or its representatives.
7.
				  "Independent board member" has the same meaning as described in
				  §
											7.14(A)(3)   of this Part.
8.
				  "Insurer" means a licensed insurer as defined in R.I. Gen. Laws §§
											27-1-1
et seq
.,
				  27-2-1
et seq
., 27-19-1
et seq
.,
				  27-20-1
et seq.
, 27-20.1-1
et seq
.,
				  27-20.2-1
et seq
., 27-20.3-1
et seq
., and
				  27-41-1
et seq
., and an authorized insurer to as defined in
				  R.I. Gen. Laws §
											27-3-28   transact the business of surplus lines insurance
				  in this State.
9. "Group of
				  insurers" means those licensed insurers included in the reporting requirements
				  of R.I. Gen. Laws §
											27-35-1
et seq
.,
				  or a set of insurers as identified by management, for the purpose of assessing
				  the effectiveness of Internal control over financial reporting.
10. "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.
11. "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 §§
											7.5(B)(2) - (7)   of this Part 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 §§
												7.5(B)(2) - (7)   of this
				  Part 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 §§
												7.5(B)(2) - (7)   of this Part.
12. "SEC" means the United States
				  Securities and Exchange Commission.
13. "Section  404" means §
											404   of the
				  Sarbanes-Oxley Act of 2002 and the SEC's Rules and Regulations promulgated
				  thereunder.
14. "Section  404   R
				  eport" means management's report on "internal control over financial reporting"
				  as defined by the SEC and the related attestation report of the independent
				  Certified Public Accountant as described in §
											7.3(A)(1)   of this
				  Part.
15. "SOX Compliant Entity"
				  means an entity that either is required to be compliant with, or voluntarily is
				  compliant with, all of the following provisions of the Sarbanes-Oxley Act of
				  2002:
(i) the preapproval requirements of
				  §
												201   (§
												10A(i)   of the Securities Exchange Act of 1934);
(ii) the Audit committee independence
				  requirements of §
												301   (§
												10A(m)(3)   of the Securities Exchange Act of
				  1934); and
(iii) the Internal
				  control over financial reporting requirements of §
												404   (Item 308 of SEC
				  Regulation S-K).