Connecticut Administrative Code
Title 38a - Insurance Department
54 - Annual Audited Financial Reports
Section 38a-54-6 - Qualifications of independent certified public accountant
Current through March 14, 2024
(a) The Commissioner shall not recognize any person or firm as a qualified independent certified public accountant if the person or firm:
(b) Except as otherwise provided herein, the Commissioner shall recognize an independent certified public accountant as qualified in accordance with Sections 38a-54-1 to 38a-54-14, inclusive, of the Regulations of Connecticut State Agencies as long as he or she conforms to the standards of his or her profession, as contained in the Code of Professional Ethics of the AICPA and Rules and Regulations and Code of Ethics and Rules of Professional Conduct of the Connecticut State Board of Accountancy, or similar code.
(c) A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. However, in the event of a delinquency proceeding commenced against the insurer under Chapter 704c of the Connecticut General Statutes, the mediation or arbitration provisions shall operate at the option of the statutory successor.
(d) The lead or coordinating audit partner having primary responsibility for the audit may not act in that capacity for more than five (5) consecutive years. The person shall be disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of five (5) consecutive years. An insurer may make application to the Commissioner for relief from the above rotation requirement on the basis of unusual circumstances. This application shall be made at least thirty (30) days before the end of the calendar year. The Commissioner may consider the following factors in determining if the relief sought should be granted:
The requirements of this subsection shall become effective on January 1, 2010.
(e) An insurer shall file, with its annual statement filing, the approval for relief as provided in subsection (d) of this section with the states that it is licensed in or doing business in and with the NAIC. If the non-domestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.
(f) The Commissioner shall neither recognize as a qualified independent certified public accountant, nor accept any annual audited financial report prepared in whole or in part by, any person who:
(g) The Insurance Commissioner may, as provided in Section 38a-16 of the Connecticut General Statutes and the Rules of Practice of the Insurance Department, hold a hearing to determine whether an independent certified public accountant is qualified and, considering the evidence presented, may rule that the accountant is not qualified for purposes of expressing his or her opinion on the financial statements in the annual audited financial report made pursuant to Section 38a-54-3 of the Regulations of Connecticut State Agencies and require the insurer to replace the accountant with another whose relationship with the insurer is qualified within the meaning of this section.
(h)
(i) Insurers having direct written and assumed premiums of less than $100,000,000 in any calendar year may request an exemption from subsection (h)(1) of this section. The insurer shall file with the Commissioner a written statement discussing the reasons why the insurer should be exempt from these provisions. If the Commissioner finds, upon review of this statement, that compliance with said subsection would constitute a financial or organizational hardship upon the insurer, an exemption may be granted.
(j) A qualified independent certified public accountant who performs the audit may engage in other non-audit services, including tax services, that are not described in subsection (h)(1) of this section or that do not conflict with subsection (h)(2) of this section, only if the activity is approved in advance by the audit committee, in accordance with subsection (k) of this section.
(k) All auditing services and non-audit services provided to an insurer by the qualified independent certified public accountant of the insurer shall be preapproved by the audit committee. The preapproval requirement is waived with respect to non-audit services if the insurer is a SOX compliant entity or a direct or indirect wholly-owned subsidiary of a SOX compliant entity or:
(l) The audit committee may delegate to one or more designated members of the audit committee who are members of the board of directors the authority to grant pre-approvals required by subsection (k) of this section. The decisions of any members to whom this authority is delegated shall be presented to the full audit committee at each of its scheduled meetings.
(m)
(n) The requirements of subsections (h) through (m), inclusive, of this section shall be effective for audits in the year beginning January 1, 2010.