Wis. Admin. Code Office of the Commissioner of Insurance § Ins 50.15 - Requirements for audit committees
(1) This section
does not apply to foreign or alien insurers licensed in this state or an
insurer that is a SOX Compliant Entity or a direct or indirect wholly-owned
subsidiary of a SOX Compliant Entity.
(2) The audit committee shall be directly
responsible for the appointment, compensation and oversight of the work of any
accountant, including resolution of disagreements between management and the
accountant regarding financial reporting, for the purpose of preparing or
issuing the audited financial report or related work pursuant to this chapter.
Each accountant shall report directly to the audit committee .
(2m) The audit committee shall be responsible
for overseeing the insurer's internal audit function and granting the person or
persons performing the function suitable authority and resources to fulfill
their responsibilities if required by s. Ins 50.155.
(3) Each member of the audit committee shall
be a member of the board of directors of the insurer or a member of the board
of directors of an entity elected pursuant to sub. (6) and s.
Ins
50.01(1r).
(4) In order to be considered independent for
purposes of this section, a member of the audit committee may not, other than
in the capacity as a member of the audit committee , the board of directors, or
any other board committee, accept any consulting, advisory or other
compensatory fee from the entity or be an affiliated person of the entity or
any subsidiary thereof. However, if a law requires board participation by
otherwise non-independent members, the law shall prevail and the members may
participate in the audit committee and be designated as independent for audit
committee purposes, unless the members are an officer or employee of the
insurer or one of its affiliates.
(5) If a member of the audit committee ceases
to be independent for reasons outside the member's reasonable control, the
member, with notice by the insurer to the commissioner, may remain an audit
committee member of the insurer until the earlier of the next annual meeting of
the insurer or one year from the occurrence of the event that caused the member
to be no longer independent.
(6) To
exercise the election of the controlling person to designate the audit
committee for purposes of this chapter, the ultimate controlling person shall
provide written notice to the commissioner of the affected insurers.
Notification shall be made timely prior to the issuance of the audited
financial report and include a description of the basis for the election. The
election can be changed through notice to the commissioner by the insurer,
which shall include a description of the basis for the change. The election
shall remain in effect for perpetuity, until rescinded.
(7)
(a) The
audit committee shall require the independent certified public accountant that
performs for an insurer any audit required by this chapter to timely report to
the audit committee in accordance with the requirements of SAS 61,
Communication with Audit Committees, or its replacement, including:
1. All significant accounting policies and
material permitted practices.
2.
All material alternative treatments of financial information within statutory
accounting principles that have been discussed with management officials of the
insurer , ramification of the use of the alternative disclosures and treatments,
and the treatment preferred by the independent certified public
accountant .
3. Other material
written communications between the independent certified public accountant and
the management of the insurer, such as any management letter or schedule of
unadjusted differences.
(b) If an insurer is a member of an insurance
holding company system, the reports required by sub. (7) (a) may be provided to
the audit committee on an aggregate basis for insurers in the holding company
system, provided that any substantial differences among insurers in the system
are identified to the audit committee .
(8) The proportion of independent audit
committee members shall meet or exceed the criteria contained in the following
table unless the commissioner orders a greater proportion of independent audit
committee members: -
Prior Calendar Year Direct Written and
Non- |
||
$0 - $300,000,000 |
$300,000,000 - $500,000,000 |
Over $500,000,000 |
No minimum requirements. |
Majority (50% or more) of members shall be independent. |
Supermajority of members (75% or more) shall be independent. |
(9)
An insurer with direct written and assumed premium, excluding premiums
reinsured with the Federal Crop Insurance Corporation and Federal Flood
Program, less than $ 500,000,000 may make application to the commissioner for a
waiver from this section based upon hardship. The insurer shall file with its
annual statement filing the approval for relief from the requirements of this
section with the states that it is licensed in or doing business in and the
NAIC. If the nondomestic state accepts electronic filing with the NAIC, the
insurer shall file the approval in an electronic format acceptable to the
NAIC.
Notes
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