Current through December 12, 2024
1. A licensed family trust company which received a rating of "satisfactory" on its most recent examination or which has not yet undergone an examination may elect to undergo an independent review. A licensed family trust company that elects to undergo an independent review must provide notification of such an election to the Division within 30 days after receipt of its notice of examination provided pursuant to section 21 of this regulation. The Division will provide written confirmation to the licensed family trust company that its examination will be conducted by means of independent review within 30 days after receiving the licensed family trust company's notification of election.
2. An independent review must be conducted by a person who:
(a) Uses professional standards for conducting the independent review which are promulgated by the American Institute of Certified Public Accountants, the Institute of Internal Auditors or the Bank Administration Institute;
(b) Is independent from the licensed family trust company and is not owned or controlled by any stockholder, member, owner, affiliate, family affiliate, family member, client or employee of the licensed family trust company;
(c) Does not share a material business or financial interest with the licensed family trust company;
(d) Ensures that the independent review is supervised by a certified public accountant in good standing with the American Institute of Certified Public Accountants and in each state in which the accountant is licensed to practice, a certified internal auditor or certified financial services auditor in good standing with the Institute of Internal Auditors or a certified bank auditor in good standing with the Bank Administration Institute; and
(e) Maintains in good standing all licenses and registrations necessary to perform the services included in an independent review.
3. A qualified firm performing an independent review shall comply with the professional standards promulgated by the American Institute of Certified Public Accountants, the Institute of Internal Auditors or the Bank Administration Institute, as appropriate, and the provisions of this chapter and chapter 669A of NRS. The qualified firm must ensure that the scope of the independent review meets or exceeds the provisions of the examination guidance and any written clarification or modification of the examination guidance issued by the Commissioner to the licensed family trust company pursuant to subsection 1 of section 26 of this regulation.
4. Upon the completion of an independent review, the qualified firm shall prepare a written independent review report. The independent review report must:
(a) Confirm that the qualified firm performed the independent review using the policies and procedures adopted by the licensed family trust company relating to the management, operation and administration of its trust business and the information and documentation provided in response to the notice of examination;
(b) Identify any deficiency noted during the independent review;
(c) Identify any client complaints;
(d) Identify any failure by the licensed family trust company to respond to the notice of examination;
(e) Comment on the cooperation of the management of the licensed family trust company during the independent review;
(f) Review the compliance of the licensed family trust company with the provisions of this chapter and chapter 669A of NRS; and
(g) Include the written response by the management of the licensed family trust company to any deficiency, corrective action or client complaint, if applicable.
5. A licensed family trust company that undergoes an examination by means of independent review shall file with the Division, on or before September 30 of the year in which the independent review is conducted:
(a) The independent review report prepared by the qualified firm conducting the independent review; and
(b) The audited financial statements of the licensed family trust company for the examination period prepared by a certified public accountant, including, without limitation, a description of the accounting method in use by the licensed family trust company.
6. Upon the filing of an independent review report, the Division will:
(a) Perform an administrative review of the independent review report to ensure that:
(1) The person engaged by the licensed family trust company to perform the independent review satisfies the requirements of subsection 2;
(2) The independent review and the independent review report comply with the provisions of this chapter;
(3) Each deficiency, client complaint and corrective action identified in the independent review report were reported to the management of the licensed family trust company;
(4) The written response of the management of the licensed family trust company to each deficiency, client complaint or corrective action is reasonably adequate to ensure the compliance of the licensed family trust company with this chapter and chapter 669A of NRS; and
(5) The licensed family trust company complies with the requirements of this chapter and chapter 669A of NRS; and
(b) Assess the licensed family trust company which is the subject of the independent review report a fee of $1,000 for its administrative review of the independent review report.
Added to NAC by Comm'r of Financial Institutions by R051-16, eff. 1/1/2017
NRS 658.101, 669A.260, 669A.270
