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 284-07-217 - Management's report of internal control over financial reporting

Current through Register Vol. 24-14, July 15, 2024
(1) Every insurer
				required to file an audited financial report under WAC
				284-07-100 through
				284-07-230 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 must prepare a report of the insurer's or group of insurers'
				internal control over financial reporting, as these terms are defined in WAC
				284-07-110. The report must be
				filed with the commissioner along with the Communications of Internal Control
				Related Matters Noted in an Audit described under WAC
				284-07-190. Management's report
				of internal control over financial reporting shall be as of December 31
				immediately preceding.
(2)
				Notwithstanding the premium threshold in subsection (1) of this section, the
				commissioner may require an insurer to file management's report of internal
				control over financial reporting if the insurer is in any RBC level event, or
				meets any one or more of the standards of an insurer deemed to be in hazardous
				financial condition as defined in WAC
				284-16-310.
(3) An insurer or 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 (those items included in WAC
				284-07-130(2)(b) through
				(g))  were included in the scope of the
				Section 404 Report. The addendum must 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 WAC
				284-07-130(2)(b) through
				(g))  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:
(i) A WAC
				284-07-217 report; or
(ii) The Section 404 Report and a WAC
				284-07-217 report 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.