Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-07 - Requirements as to company reports and annual statements › AUDITED FINANCIAL STATEMENTS › Section 284-07-110 - Definitions

Current through Register Vol. 24-14, July 15, 2024
For the purposes of WAC
				  284-07-100
				  through
				  284-07-230
				  the following definitions shall apply:
(1) "Accountant" or "independent certified
				public accountant" means 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 he or she is licensed to
				practice; for Canadian and British companies, the terms mean a
				Canadian-chartered or British-chartered accountant.
(2) An "affiliate" of, or person "affiliated"
				with, a specific person, is a person that directly, or indirectly through one
				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 functions 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 or
				more of these controlled insurers solely for the purposes of WAC
				284-07-100
				through
				284-07-230
				at the election of the controlling person. Refer to WAC
				284-07-213(5)
				 for exercising this election. If an audit committee is not designated by the
				insurer, the insurer's entire board of directors constitutes the audit
				committee.
(4) "Audited financial
				report" means and includes those items specified in WAC
				284-07-130.
(5) "Group of insurers" means those licensed
				insurers included in the reporting requirements of chapter 48.31B RCW, or a set
				of insurers as identified by management, for the purpose of assessing the
				effectiveness of internal control over financial reporting.
(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 of other misrepresentations made by the insurer
				or its representatives.
(7)
				"Independent board member" has the same meaning as described in WAC
				284-07-213(3).
(8) "Insurer" has the same meaning as set
				forth in
				RCW
				 48.01.050. It also includes health care
				service contractors registered under chapter 48.44 RCW, health maintenance
				organizations registered under chapter 48.46 RCW, fraternal benefit societies
				registered under chapter 48.36A RCW, and self-funded multiple employer welfare
				arrangements authorized under chapter 48.125 RCW.
(9) "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.
(10) "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 WAC
				284-07-130(2)(b)
				through (g)  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 WAC
				284-07-130(2)(b)
				through (g)  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 WAC
				284-07-130(2)(b)
				through (g).