Utah Admin. Code R590-254-3 - Definitions

Current through Bulletin No. 2021-18, September 15, 2021

The terms and definitions contained in this rule are intended to provide definitional guidance as the terms are used within this rule. In addition to the definitions in Section 31A-1-301, the following definitions shall apply for the purpose of this rule:

(1) "Accountant" or "independent certified public accountant" means an independent certified public accountant or accounting firm in good standing:
(a) with the American Institute of Certified Public Accountants (AICPA); and
(b) in all states in which the accountant or independent certified public accountant is licensed to practice;
(c) 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, 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, and audits of financial statements of the insurer or group of insurers.
(a) 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 pursuant to Subsection R590-254-14(6).
(b) 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 Section R590-254-5.
(5) "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.
(6) "Independent board member" has the same meaning as described in Subsection R590-254-14(4).
(7) "Insurer" means a licensed insurer or an authorized insurer as defined in Section 31A-1-301.
(8) "Group of insurers" means those licensed insurers:
(a) included in the reporting requirements of Chapter 31A-16, Insurance Holding Companies; or
(b) a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over financial reporting.
(9) "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 specified in Subsections R590-254-5(2)(b) through R590-254-5(2)(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 specified in Subsections R590-254-5(2)(b) through R590-254-5(2)(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 specified in Subsections R590-254-5(2)(b) through R590-254-5(2)(g).
(10) "SEC" means the United States Securities and Exchange Commission.
(11) "Section 404" means Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC's rules and regulations promulgated thereunder.
(12) "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 Subsection (1).
(13) "SOX compliant entity" means an entity that either is required to be compliant with, or voluntarily is compliant with, each of the following provisions:
(a) the preapproval requirements of Section 201 of the Sarbanes-Oxley Act of 2002, under Section 10A(i) of the Securities Exchange Act of 1934,
(b) the audit committee independence requirements of Section 301 of the Sarbanes-Oxley Act of 2002, under Section 10A(m)(3) of the Securities Exchange Act of 1934; and
(c) the internal control over financial reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002, under Item 308 of SEC Regulation S-K.

Notes

Utah Admin. Code R590-254-3
Amended by Utah State Bulletin Number 2021-13, effective 6/22/2021

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