Annual Audited Financial Reports

 

DEPARTMENT OF FINANCIAL SERVICES

OIR – Insurance Regulation

RULE NO.:RULE TITLE:

69O-137.002Annual Audited Financial Reports

NOTICE OF CHANGE

Notice is hereby given that the following changes have been made to the proposed rule in accordance with subparagraph 120.54(3)(d)1., F.S., published in Vol. 44 No. 135, July 12, 2018 issue of the Florida Administrative Register.

The changes are in response to written comments received from the Joint Administrative Procedures Committee.

 

69O-137.002 Annual Audited Financial Reports.

(1) through (8) No change.

(9) Scope of Audit and Report of Independent Certified Public Accountant. Financial statements furnished pursuant to subsection (5), above, 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-C 610 of the Professional Standards of the AICPA, Using the Work of Internal Auditors, effective 12/15/14, and AU-C Section 940 of the Professional Standards of the AICPA, An Audit of Internal Control Over Financial Reporting That is Integrated With an Audit of Financial Statements, effective 12/15/16, the independent certified public accountant should obtain an understanding of internal control sufficient to plan the audit. To the extent required by AU-C 610 and AU-C Section 940, for those insurers required to file a Management’s Report of Internal Control over Financial Reporting pursuant to subsection (16), the independent certified public accountant should consider (as that term is defined in of the Professional Standards of the AICPA,  AU-C 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards , effective 12/15/12 ) the most recently available report in planning and performing the audit of the statutory financial statements. Consideration should also be given to the other procedures illustrated in the Financial Condition Examiner’s Handbook promulgated by the National Association of Insurance Commissioners (incorporated by reference in Rule 69O-138.001, F.A.C.) as the independent Certified Public Accountant deems necessary.

(10) Notification of Adverse Financial Condition.

(a) through (b) No change.

(c) If the accountant, subsequent to the date of the Audited Financial Report filed pursuant to this rule, becomes aware of facts which might have affected his report, the Office notes the obligation of the accountant to take such action as prescribed in AU-C 560 of the Professional Standards of the AICPA, Subsequent Events and Subsequently Discovered Facts , effective 12/15/12 .

(11) Communication of Internal Control Related Matters Noted in an Audit.

(a) In addition to the annual Audited Financial Report, each insurer shall furnish the Office with a written communication as to any unremediated material weaknesses in its Internal control over financial reporting noted during the audit. Such communication shall be prepared by the accountant within sixty (60) days after the filing of the annual Audited Financial Report, and shall contain a description of any unremediated material weakness (as the term material weakness is defined by AU-C 265 of the Professional Standards of the AICPA, Communicating Internal Control Related Matters Identified in an Audit , effective 12/15/12 ) as of December 31 immediately preceding (so as to coincide with the Audited Financial Report discussed in subsection (4)) in the insurer’s Internal control over financial reporting noted by the accountant during the course of their audit of the financial statements. If no unremediated material weaknesses were noted, the communication should so state.

(b) No change.

(12) through (13) No change.

(14) Requirements for Audit Committee.

This section shall 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.

(a) through (e) No change.

(f)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 AU-C 260 of the Professional Standards of the AICPA, The Auditor’s Communication With Those Charged with Governance, effective 12/15/12, including:

a. through c. No change.

2. If an insurer is a member of an insurance holding company system, the reports required by subparagraph (f)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.

(g) through (h) No change.

(15) through (19) No change.

(20) Standards Incorporated by Reference.

(a) The following standards are hereby incorporated by reference:

1. AU-C 610 of the Professional Standards of the AICPA, Using the Work of Internal Auditors , effective 12/15/14 ;

2. AU-C 200 120 of the Professional Standards of the AICPA, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards , effective 12/15/12 ;

3. AU-C 560 of the Professional Standards of the AICPA, Subsequent Events and Subsequently Discovered Facts , effective 12/15/12 ;

4. AU-C 265 of the Professional Standards of the AICPA, Communicating Internal Control Related Matters Identified in an Audit , effective 12/15/12 ;

5. AU-C 260 of the Professional Standards of the AICPA, The Auditor’s Communication With Those Charged With Governance , effective 12/15/12 ; and

6. AU-C Section 940 of the Professional Standards of the AICPA, An Audit of Internal Control Over Financial Reporting That is Integrated With an Audit of Financial Statements , effective 12/15/16 .

(b) The standards incorporated in this section are available :

1. From at the American Institute of Certified Public Accountants’ CPAs (AICPA) website at: http://www.aicpa.org/Publications ; and, .

2. For inspection during regular business hours at the Office of Insurance Regulation, Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0300.

Rulemaking Authority 624.308(1), 624.4085, 624.424(8)(e) FS. Law Implemented 624.307(1), 624.324, 624.424(8) FS. History–New 3-31-92, Amended 3-14-94, 8-17-98, 4-4-01, 8-14-02, Formerly 4-137.002, Amended 11-3-05, 9-21-10, ____________.