Ala. Admin. Code r. 482-1-141-.03 - Definitions
The following definitions shall apply for purposes of this chapter:
(a) "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 Accounts (AICPA) and in all states in which he or she is
licensed to practice; for Canadian and British companies, it means a
Canadian-chartered or British-chartered accountant.
(b) 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.
(c) "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, and audits of financial statements of the insurer
or group of insurers, the internal audit function of an insurer or group of
insurers (if applicable), and 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 this regulation at the election
of the controlling person. Refer to paragraph (5) of Rule
482-1-141-.14 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.
(d) "Audit financial report" means and
includes those items specified in rule
482-1-141-.05.
(e) "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.
(f)
"Independent board member" has the same meaning as described in paragraph (3)
of Rule 482-1-141-.14.
(g) "Insurer" means a licensed insurer as
defined in Sections
27-1-2(2),
Code of Ala. 1975, or an authorized insurer as defined
in Section
27-1-2(10),
Code of Ala. 1975.
(h) "Group of insurers" means those licensed
insurers included in the reporting requirements of Section
27-29-1, Code of Ala.
1975, or a set of insurers as identified by management, for the
purpose of assessing the effectiveness of internal control over financial
reporting.
(i) "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.
(j)
"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 paragraphs (2) through (7) of Rule
482-1-141-.05 and includes those
policies and procedures that satisfy all of the following:
1. Pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of assets.
2. Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of the financial statements, i.e., those items specified in
paragraphs (2) through (7) of Rule
482-1-141-.05 and that receipts
and expenditures are being made only in accordance with authorizations of
management and directors.
3.
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
paragraphs (2) through (7) of Rule
482-1-141-.05.
(k) "SEC" means the United States
Securities and Exchange Commission.
(l) "Section 404" means Section 404 of the
Sarbanes-Oxley Act of 2002 and the SECs rules and regulations promulgated
thereunder.
(m) "Section 404
Report" 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 paragraph
(a).
(n) "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:
1. The preapproval requirements of
Section 201 (Section 10A(i) of the Securities Exchange Act of 1934).
2. The Audit committee independence
requirements of Section 301 (Section 10A(m)(3) of the Securities Exchange Act
of 1934).
3. The internal control
over financial reporting requirements of Section 404 (Item 308 of SEC
Regulation S-K).
Notes
Author: Commissioner of Insurance
Statutory Authority: Code of Ala. 1975, ยงยง 27-2-17, 27-3-26, 27-7-43.
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.