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Rule 235 ANNUAL AUDITED FINANCIAL REPORTS Contents Section 1. Authority and Purpose This Rule is adopted by the Superintendent of Insurance pursuant to 24 M.R.S.A. § 2317(2) and 24‑A M.R.S.A. §§ 212, 221‑A(5), and 4218, in order to ensure that the annual audited financial reports required pursuant to 24-A M.R.S.A. § 221‑A and other applicable provisions of the Maine Insurance Code are prepared in compliance with the standards established by the National Association of Insurance Commissioners. Section 2. Scope This Rule applies to all insurers and health maintenance organizations required to file audited financial reports pursuant to 24-A M.R.S.A. §§ 221‑A and 4233(2), and to all nonprofit corporations regulated under Title 24 M.R.S.A., subject to the same exemptions and limitations that would apply under 24-A M.R.S.A. §§ 221‑A and this Rule if they were authorized as insurers. For purposes of this Rule, the term “insurer” includes health maintenance organizations and nonprofit corporations regulated under Title 24 M.R.S.A. If an insurer is publicly traded, this Rule and the standards incorporated by reference herein apply only to the extent that it does they do not conflict with applicable federal law and applicable standards promulgated by the Public Company Accounting Oversight Board. For SOX-Compliant Insurers, as defined in Section 15, the provisions of this Rule are superseded to the extent provided therein. Compliance with this Rule does not limit in any way the insurer’s duty to provide such additional information as the Superintendent may request pursuant the Superintendent’s examination authority or other applicable law. Section 3. Contents of Annual Audited Financial Report The annual audited financial report shall report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows, and changes in capital and surplus for the year then ended. Financial statements, opinions, and reports filed pursuant to this Rule must be prepared in conformity with the statutory accounting practices prescribed or permitted by the insurance supervisory official of the insurer’s state of domicile for insurers’ regulatory financial statements, with due consideration given to the procedures illustrated in the Financial Condition Examiners Handbook or its successor publication promulgated by the National Association of Insurance Commissioners. The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the Superintendent. The financial statements shall be comparative, presenting the amounts as of December 31 of the most recent year and the amounts as of the immediately preceding December 31, except for newly formed insurers for which comparative data does not exist. The annual audited financial report shall include the following:
Section 4. Time for Filing of Annual Audited Financial Report An insurer shall file its audited financial report with the Superintendent on or before June 1 of each year, or such other date as may be provided by law or ordered by the Superintendent upon 90 days’ notice to the insurer. Extensions of the filing date may be granted by the Superintendent for 30-day periods upon a showing by the insurer and its independent certified public accountant of the reasons for requesting an extension and a determination by the Superintendent that there is good cause for an extension. The request for extension must be submitted in writing at least ten days before the due date in sufficient detail to permit the Superintendent to make an informed decision on the requested extension. Section 5. Designation of Independent Certified Public Accountant
Section 6. Qualifications of Independent Certified Public Accountant
F. The Superintendent shall not recognize an individual or firm as a qualified independent certified public accountant, nor accept an annual audited financial report prepared in whole or in part by an individual or firm, if the individual or firm provides to the insurer, contemporaneously with the audit, any services that would impair the accountant’s independence from the insurer by causing the accountant to function in the role of management, to have the authority to audit the accountant’s own work, or to serve in an advocacy role for the insurer. (1) The following non-audit services violate this Subsection, unless authorized by the Superintendent pursuant to Paragraph 2: (a) Bookkeeping or other services related to the accounting records or financial statements of the insurer; (b) Financial information systems design and implementation; (c) Appraisal or valuation services, fairness opinions, or contribution-in-kind reports; (d) Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions, and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer’s financial statements. An accountant’s actuary may also issue an actuarial opinion or certification on an insurer’s reserves if the following conditions have been met: (i) Neither the accountant nor the accountant’s actuary has performed any management functions or made any management decisions; (ii) The insurer has competent personnel (or engages a third party actuary) to estimate the reserves for which management takes responsibility; and (iii) The accountant’s actuary tests the reasonableness of the reserves after the insurer’s management has determined the amount of the reserves; (e) Internal audit outsourcing services; (f) Management functions or human resources; (g) Broker or dealer, investment adviser, or investment banking services; (h) Legal services or expert services unrelated to the audit; or (i) Any other services that the Superintendent determines are impermissible. (2) The Superintendent may exempt an insurer from the prohibitions of Paragraph 1 for any calendar year in which the insurer has direct written and assumed premiums of less than $100,000,000 and files a written request with the Superintendent, at least 30 days before the end of the calendar year, explaining the nature of the non-audit services to be provided and demonstrating to the satisfaction of the Superintendent that strict compliance with the required separation of functions would impose an unreasonable financial or organizational hardship upon the insurer, and that the services to be provided will not compromise the integrity of the audit. (3) A qualified independent certified public accountant who performs the audit may engage in non-audit services that are not described in Paragraph 1, including tax services, only if the insurer is a SOX-Compliant Insurer as defined in Section 15 or if the activity is approved in advance by the Audit Committee in accordance with Subsection H. The Audit Committee may delegate the approval authority to one or more designated members of the Audit Committee if the decisions of any member to whom this authority is delegated are presented to the full Audit Committee for review at each of its scheduled meetings. (4) The Superintendent shall consider the analogous provisions of Securities and Exchange Commission Final Rule No. 33-8183, Strengthening the Commission’s Requirements Regarding Auditor Independence (adopted January 28, 2003), when evaluating whether an accountant is performing services that would impair the accountant’s independence. F G. If the Superintendent determines that an accountant is not qualified, the insurer shall replace the accountant with another whose relationship with the insurer is qualified within the meaning of this Rule. If the insurer contests the Superintendent’s determination, the Superintendent shall hold an adjudicatory hearing pursuant to 24‑A M.R.S.A. § 229. H. All auditing services and non-audit services provided to an insurer by the qualified independent certified public accountant of the insurer must be preapproved by the Audit Committee, except for non-audit services satisfying all of the following criteria: (1) The aggregate amount of all non-audit services provided to the insurer constitutes not more than five percent (5%) of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the non-audit services are provided; (2) The services were not recognized by the insurer at the time of the engagement to be non-audit services; and (3) The services are promptly brought to the attention of the Audit committee and approved prior to the completion of the audit by the Audit committee or by one or more members of the Audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the Audit committee. I. The Superintendent shall not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for that insurer, was employed by the independent certified public accountant and participated in the audit of that insurer during the one-year period preceding the date that the most current statutory opinion is due as a partner or senior manager. An insurer may make application to the Superintendent for relief from the requirements of this Subsection on the basis of unusual circumstances. An insurer granted relief shall file a copy of the Superintendent’s approval with the NAIC, in an electronic format acceptable to the NAIC, and shall make such additional filings as may be required by any state in which the insurer is licensed. Section 7. Consolidated or Combined Audits An insurer may make written application to the Superintendent for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies that utilizes a pooling or 100% reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and the insurer cedes all of its direct and assumed business to the pool. In such cases, a columnar consolidating or combining worksheet shall be filed with the report, as follows:
Section 8. Scope of Audit and Report of Independent Certified Public Accountant Financial statements furnished pursuant to Section 3 shall be examined by the independent certified public accountant. The audit of the insurer’s financial statements shall be conducted in accordance with generally accepted auditing standards. In accordance with AU Section 314 of the Professional Standards of the AICPA, Consideration of Internal Control in a Financial Statement Audit, the independent certified public accountant should obtain an understanding of internal control sufficient to plan the audit. To the extent required by AU 314, for those insurers required to file a Management’s Report of Internal Control over Financial Reporting pursuant to Section 10, the independent certified public accountant should consider (as that term is defined in Statement on Auditing Standards (SAS) No. 102 (AU 120), Defining Professional Requirements in Statements on Auditing Standards or its replacement) the most recently available report in planning and performing the audit of the statutory financial statements. Consideration shall be given to the procedures illustrated in the Financial Condition Examiners Handbook promulgated by the National Association of Insurance Commissioners as the independent certified public accountant deems necessary. Section 8 9. Notification of Adverse Financial Condition
Section 9 10. Evaluation of Insurer’s Internal Controls A. An insurer’s board of directors and management shall have effective internal controls designed to provide reasonable assurance regarding the reliability of the financial statements required by Subsections 3(B) through 3(F) of this Rule, including policies and procedures that: (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 and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and (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. B. In addition to At the time the annual audited financial statements report is filed, each insurer shall furnish the Superintendent with a written report prepared by the accountant acknowledging that the accountant has evaluated the insurer’s internal controls pursuant to SAS No. 78 109, Consideration of Internal Control in a Financial Statement Audit (AU Section 319 314 of the Professional Standards of the American Institute of Certified Public Accountants), and describing any significant deficiencies in the insurer’s internal control structure noted by the accountant during the audit. SAS No. 60 112, Communication of Internal Control Structure Related Matters Noted in an Audit (AU Section 325 of the Professional Standards of the American Institute of Certified Public Accountants), requires an accountant to communicate significant deficiencies (known as “reportable conditions”) noted during a financial statement audit to the appropriate parties within an entity. No further detail need be provided if the accountant does not identify significant deficiencies. If the internal control evaluation cannot be finalized by the time the annual audited financial statement report is filed, the insurer may file the evaluation up to 60 days later. If significant deficiencies are identified, the insurer must provide a description of remedial actions taken or proposed, if those actions are not described in the accountant’s report. The insurer must retain for at least six years, and make available for examination by the Superintendent, all communications with the independent certified public accountant relating to significant deficiencies. C. In addition to the Communication of Internal Control Related Matters Noted in an Audit required pursuant to Subsection B, all insurers, and all groups of insurers filing annual audited financial reports on a consolidated basis, shall file Management’s Report of Internal Control over Financial Reporting, as of December 31 immediately preceding if their direct written and assumed premiums for the year, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, were $500,000,000 or more, or if the insurer has been ordered by the Superintendent to file the report after the occurrence of a risk-based-capital action level event pursuant to 24‑A M.R.S.A. §§ 6453 through 6456 or a determination of hazardous financial condition pursuant to Bureau of Insurance Rule 710. Except as otherwise provided in Subsection 15(C) for SOX-Compliant Insurers, Management’s Report of Internal Control over Financial Reporting shall include: (1) A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting; (2) A statement that management has established internal control over financial reporting and an assertion, to the best of management’s knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles; (3) A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting; (4) A statement that briefly describes the scope of work that is included and whether any internal controls were excluded; (5) Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of December 31 immediately preceding. Management is not permitted to conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there are any unremediated material weaknesses in its internal control over financial reporting; (6) A statement regarding the inherent limitations of internal control systems; and (7) Signatures of the chief executive officer and the chief financial officer (or equivalent position/title). D. Management shall document and make available upon financial condition examination the basis upon which the assertions in Management’s Report of Internal Control are made. Management may base its assertions, in part, upon its review, monitoring, and testing of internal controls undertaken in the normal course of its activities. (1) Management shall have discretion as to the nature of the internal control framework used, and the nature and extent of documentation, in order to make its assertion in a cost effective manner and, as such, may include assembly of or reference to existing documentation. (2) Any documentation provided by the insurer in support of its internal control evaluation during the course of a financial condition examination shall be kept confidential pursuant to Subsection 12(E). (3) If the insurer considers any information disclosed by a report filed pursuant to Subsection B or C to be confidential under Maine law, the insurer shall file a request for protection from disclosure, identifying with particularity the information the insurer considers to be confidential and the reasons the insurer believes the information filed is not a public record within the meaning of the Maine Freedom of Access Law, 1 M.R.S.A. §§ 401 et seq. Drafting Note: It is recommended that the company officer responsible for financial reporting not be a member of the Audit Committee and that the independent committee members meet periodically with the independent certified public accountant, with no management present, to discuss the strengths and weaknesses of the insurer’s or group’s internal control environments.
Section 10 11. Accountant’s Letter of Qualifications The accountant shall furnish the insurer in connection with, and for inclusion in, the filing of the annual audited financial report, a letter stating: A. That the accountant is independent with respect to the insurer and conforms to the standards of his or her profession as contained in the Code of Professional Ethics and pronouncements of the American Institute of Certified Public Accountants and the rules of professional conduct of the Maine Board of Accountancy, or similar code; B. The background and experience in general, and the experience in audits of insurers of the staff assigned to the engagement and whether each is an independent certified public accountant. Nothing within this Rule shall be construed as prohibiting the accountant from utilizing such staff as he or she deems appropriate where use is consistent with the standards prescribed by generally accepted auditing standards; C. That the accountant understands that the annual audited financial report and his opinion thereon must be filed in compliance with this Rule, and that the Superintendent will be relying on this information in the monitoring and regulation of the financial position of insurers; D. That the accountant consents and agrees to retain and to make available for review by the Superintendent, or the Superintendent’s designee or appointed agent, all work papers and other audit documents, as required pursuant to 24 M.R.S.A. § 2307(3), 24-A M.R.S.A. § 414(5), or 24-A M.R.S.A. § 4233(2), as applicable; E. That the accountant is properly licensed by an appropriate state licensing authority and is a member in good standing in the American Institute of Certified Public Accountants; and F. That the accountant is in compliance with the requirements of Section 6 of this Rule. Section 11 12. CPA Work Papers and Audit Communications A. The accountant shall preserve all work papers prepared in the conduct of the accountant’s examination and make them available for review and copying by Bureau of Insurance examiners in accordance with the requirements of this Section and, as applicable, the requirements of 24 M.R.S.A. § 2307(3), 24-A M.R.S.A. § 414(5), or 24‑A M.R.S.A. § 4233(2). The accountant and the insurer shall in like manner preserve and make available any communications related to the audit between the accountant and the insurer. If the work papers or audit communications are maintained in electronic form, the Superintendent may make electronic copies. B. Work papers include all records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the accountant’s examination of the financial statements of an insurer. Work papers may include, but are not limited to, audit planning documentation, work programs, analyses, reconciliations, abstracts, narratives, flow charts, memoranda, letters of confirmation and representation, copies or abstracts of company documents and schedules, and commentaries prepared or obtained by the independent certified public accountant and the accountant’s employees in connection with the accountant’s examination of the financial statements of an insurer. C. The Superintendent may have access to work papers and audit communications pursuant to this Section at the offices of the insurer, at the offices of the Bureau of Insurance, or at any other reasonable place designated by the Superintendent. D. The audit work papers and communications shall be retained for at least six years after the audit report is filed. If no examination report covering the period of the audit has been filed in the Bureau of Insurance pursuant to 24-A M.R.S.A. § 226(3), the Superintendent, upon timely notice to the accountant or the insurer, as applicable, may order retention for an additional period of up to one year. E. All documents obtained or copied by the Superintendent in accordance with this Section are examination working papers within the meaning of 24-A M.R.S.A. § 225(3), and the Superintendent shall protect their confidentiality accordingly. Section 13. Requirements for Audit Committees A. The board of directors of every insurer required to file an annual audited financial report pursuant to this Rule shall appoint an Audit Committee for the purpose of overseeing its accounting and financial reporting processes of an insurer and audits of financial statements. If a separate Audit Committee is not designated by the insurer, the insurer’s entire board of directors shall constitute the Audit Committee. B. 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 regulation. Each accountant shall report directly to the Audit Committee. C. 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 a controlling entity that has elected pursuant to Subsection G to have its Audit Committee serve as the insurer’s Audit Committee. D. The Audit Committee must include a minimum proportion of independent members in accordance with the following table. If the same Audit Committee is responsible for multiple insurers, their premium volume shall be combined. If the insurer is financially troubled, the Superintendent may impose enhanced independence requirements pursuant to applicable laws.
E. In order to be considered independent for purposes of this Section, a member of the Audit Committee may not, other than in his or her 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 the insurer is required by law to have a board of directors with an insufficient number of independent members to meet the standards of Subsection D, the insurer shall appoint other directors to the Audit Committee, subject to the Superintendent’s approval, who are not officers or employees of the insurer or any of its affiliates. In evaluating whether a director is independent within the meaning of this Section, the Superintendent shall consider the standards in Securities and Exchange Commission Final Rule No. 33-8220, Standards Relating to Listed Company Audit Committees, adopted April 9, 2003. F. If a member of the Audit Committee ceases to be independent for reasons outside the member’s reasonable control, that person, with notice by the responsible entity to the state, may remain an Audit Committee member of the responsible entity until the earlier of the next annual meeting of the responsible entity or one year after the occurrence of the event that caused the member to be no longer independent. G. The controlling person of a group of affiliated insurers may designate its audit committee to serve as the Audit Committee for one or more of those the insurers for purposes of this Rule. A controlling person exercising this election shall provide written notice to each of the insurance supervisory officials of the affected insurers. Notification shall be made timely prior to the issuance of the statutory audit report and include a description of the basis for the election. The election can be changed through notice to the Superintendent by the insurer, which shall include a description of the basis for the change. The election shall remain in effect until rescinded. H. (1) The Audit Committee shall require the accountant that performs for an insurer any audit required by this regulation to timely report to the Audit Committee in accordance with the requirements of SAS 61, Communication with Audit Committees, or its replacement, including: (a) All significant accounting policies and material permitted practices; (b) All material alternative treatments of financial information within statutory accounting principles that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the accountant; and (c) Other material written communications between the accountant and the management of the insurer, such as any management letter or schedule of unadjusted differences. (2) If an insurer is a member of an insurance holding company system, the reports required by Paragraph 1 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. I. An insurer with direct written and assumed premium less than $500,000,000, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, may make application to the Superintendent for a waiver from the requirements of this Section based upon hardship. An insurer granted relief shall file a copy of the Superintendent’s approval with the NAIC, in an electronic format acceptable to the NAIC, and shall make such additional filings as may be required by any state in which the insurer is licensed. Section 14. Conduct of Insurer in Connection with the Preparation of Required Reports and Documents A. No director or officer of an insurer shall, directly or indirectly: (1) Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review, or communication required under this Rule; or (2) Omit to state, or cause another person to omit to state, any material fact whose omission renders misleading, in light of the circumstances under which the statement was made, a statement made to an accountant in connection with any audit, review, or communication required under this Rule. B. No officer or director of an insurer, or any other person acting under the direction thereof, shall directly or indirectly take any action to coerce, manipulate, mislead, or fraudulently influence any accountant engaged in the performance of an audit pursuant to this Rule if that person knew or should have known that the action, if successful, could result in rendering the insurer’s financial statements materially misleading. C. For purposes of Subsection B of this Section, actions that, “if successful, could result in rendering the insurer’s financial statements materially misleading,” include, but are not limited to, actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead, or fraudulently influence an accountant: (1) To issue or reissue a report on an insurer’s financial statements that is not warranted in the circumstances (due to material violations of statutory accounting principles prescribed by the Superintendent, generally accepted auditing standards, or other professional or regulatory standards); (2) Not to perform audit, review, or other procedures required by generally accepted auditing standards or other professional standards; (3) Not to withdraw an issued report; or (4) Not to communicate matters to an insurer’s Audit Committee. Section 15. SOX-Compliant Insurers A. For purposes of this Section, a “SOX-Compliant Insurer” means an insurer that complies, or is a direct or indirect wholly-owned subsidiary of an entity that complies, with all of the following provisions of the Sarbanes-Oxley Act of 2002: the preapproval requirements of Section 201 (Subsection 10A(i) of the Securities Exchange Act of 1934); the audit committee independence requirements of Section 301 (Paragraph 10A(m)(3) of the Securities Exchange Act of 1934); and the internal control assessment requirements of Section 404, including Item 308 of Securities and Exchange Commission Regulation S‑K. An insurer that is not directly or indirectly subject to these provisions of the Sarbanes-Oxley Act may elect to be treated as a SOX-Compliant Insurer by demonstrating to the satisfaction of the Superintendent that it or its direct or indirect parent complies voluntarily with these provisions. B. A SOX-Compliant Insurer’s compliance with the provisions set forth in Subsection A shall constitute compliance with the audit committee requirements of Section 13 and the preapproval requirements of Subsection 6(H). C. In satisfaction of the internal control reporting requirements of Section 10, a SOX-Compliant Insurer may file its or its parent’s Section 404 Report, meaning management’s report on “internal control over financial reporting” as defined by the Securities and Exchange Commission and the related attestation report of the independent certified public accountant, as prepared in compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder by the Securities and Exchange Commission, along with either: (1) A certification by management that the scope of the Section 404 Report encompasses all internal controls having a material impact on the preparation of the insurer’s or group’s audited statutory financial statements filed pursuant to Subsections 3(B) through 3(F) of this Rule; or (2) A report prepared in compliance with Subsection 10(C) on all internal controls that have a material impact on the preparation of the insurer’s or group’s audited statutory financial statements and were not covered by the Section 404 Report. Section 16. Effect of Changes in Premium Volume An insurer that ceases to be in compliance with the audit committee independence requirements of Section 13 as a result of an increase in premium volume or a business combination shall have one calendar year to come into compliance with the new independence requirements. An insurer that becomes subject to a reporting requirement as a result of an increase in premium volume or a business combination shall have two calendar years to come into compliance with the new reporting requirements. Section 12 17. Foreign and Alien Insurers A. Foreign or alien insurers filing audited financial reports and internal control reports in another state pursuant to in compliance with that state’s requirement of audited financial reports requirements are exempt from all other requirements of this Rule as long as: (1) The Superintendent has determined that the other state’s requirements for audited financial reports, internal control reporting, and audit committee independence are substantially similar to the requirements of this Rule; (2) A copy of the Audited Financial Report, Report on Significant Deficiencies in Communication of Internal Controls Control Related Matters Noted in an Audit if applicable, and the Accountant’s Letter of Qualifications that are filed with the other state are filed with the Superintendent, or filed with the National Association of Insurance Commissioners and made available to the Superintendent on request, in accordance with the filing dates specified in this Rule; and (3) A copy of any Notification of Adverse Financial Condition Report filed with the other state is filed with the Superintendent within the time specified in Section 8 9 of this Rule. B. If the other state has substantially audited financial report requirements but does not have substantially similar internal control report requirements, and the requirements of Subsection A have otherwise been satisfied, then the exemption otherwise available under this Section does not apply to the Management’s Report of Internal Control, which must comply with the applicable provisions of this Rule except that it need not be filed directly with the Superintendent if it is included with the insurer’s filed audited financial report. C. By asserting an exemption under this Section, an insurer represents that the Superintendent may rely on the documents filed with the other state and acknowledges that any material violation of the applicable reporting requirements constitutes a violation of this Rule and any other applicable Maine law. B D. In the case of Canadian and British insurers, the annual audited financial report shall be defined as the annual statement of total business on the form filed by such companies with their domiciliary supervision authority duly audited by an independent chartered accountant. For such insurers, the letter required in Section 5 shall state that the accountant is aware of the requirements relating to the annual audited statement filed with the Superintendent pursuant to this Rule and shall affirm that the opinion expressed is in conformity with those requirements. A report filed by a Canadian insurer with the appropriate Canadian federal regulator shall be considered filed with another state for purposes of this Section. Section 13 18. Effective Date This Rule is effective January 1, 2005. The five-year rotation requirement in Subsection 6(D) applies to audited financial reports beginning with the report for calendar year 2002. The 2009 amendments to this rule are effective January 1, 2010, and apply to audited financial reports beginning with the report for calendar year 2010. Section 14 19. Severability If any section or portion of a section of this Rule or its applicability to any person or circumstance is held invalid by a court, the remainder of the Rule or the applicability of the provision to other persons or circumstances shall not be affected.
Last Updated: November 18, 2009 |
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