The terms and definitions provided herein are intended to
provide definitional guidance as the terms used in this Rule.
003.01 Accountant or
independent certified
public accountant
"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 they are licensed to practice; for Canadian and
British companies, it means a Canadian-chartered or British-chartered
accountant. For purposes of this Rule, "independent" means not affiliated with
an Insurer.
003.02 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.
003.03 Audit committee
"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 or more of
these controlled Insurers solely for the purposes of this Rule at the election
of the controlling person. Refer to Section 014.05 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.
003.04 Audited
financial report
"Audited financial report" means and includes those items
specified in Section 005 of this Rule.
003.05 Department
"Department" means the Nebraska Department of
Insurance.
003.06 Director
"Director" means the Director of Insurance for the State of
Nebraska.
003.07
Indemnification
"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.
003.08
Independent board member
"Independent board member" has the same meaning as described
in Section 014.03.
003.09
Insurer
"Insurer" means any stock insurance company, mutual insurance
company, assessment company, reciprocal insurance company, fraternal benefit
society or health maintenance organization holding a certificate of authority
or license issued by the Department.
003.10 Group of insurers
"Group of insurers" means those licensed Insurers included in
the reporting requirements of Neb. Rev. Stat.
§
44-2120, or a set
of Insurers as identified by management, for the purpose of assessing the
effectiveness of Internal control over financial reporting.
003.11 Internal audit function
"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.
003.12 Internal
control over financial reporting
"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 Section 005.02 through
005.07 of this Rule and includes those policies and procedures that:
003.12(a) Pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of assets;
003.12(b) Provide reasonable assurance that
transactions are recorded as necessary to permit preparation of the financial
statements, i.e., those items specified in Section 005.02 through 005.07 of
this Rule and that receipts and expenditures are being made only in accordance
with authorizations of management and directors; and
003.12(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 Section 005.02 through 005.07 of
this Rule.
003.13 NAIC
"NAIC" means the National Association of Insurance
Commissioners.
003.14 NAIC
Annual Statement Instructions and the
NAIC Accounting Practices and Procedures
Manual
"NAIC Annual Statement Instructions and the NAIC Accounting
Practices and Procedures Manual" means the edition of the Annual Statement
Instructions and Accounting Practice and Procedures Manuals adopted by the
National Association of Insurance Commissioners in effect for the period under
audit. The NAIC Annual Statement Instructions and the NAIC Accounting Practices
and Procedures Manual are available for public inspection at the offices of the
Nebraska Department of Insurance, located at 941 O Street, Suite 400, Lincoln,
Nebraska 68508.
003.15 SEC
"SEC" means the United States Securities and Exchange
Commission.
003.16 Section
404
"Section 404" means Section 404 of the Sarbanes-Oxley Act of
2002 and the SEC's rules and regulations promulgated
thereunder.
003.17 Section
404 Report
" 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 Section 003.01.
003.18
SOX Compliant Entity
"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 Section
201 (Section 10A(i) of the Securities Exchange Act of 1934);
(ii) the Audit committee independence
requirements of Section 301 (Section 10A(m)(3) of the Securities Exchange Act
of 1934); and
(iii) the Internal
control over financial reporting requirements of Section 404 (Item 308 of SEC
Regulation S-K).
003.19
Statutory accounting practices
"Statutory accounting practices" has the meaning defined in
the current editions of the Annual Statement Instructions and Accounting
Practice and Procedures Manuals published by the National Association of
Insurance Commissioners, or as otherwise prescribed by the insurance department
of the Insurer's state of domicile
