AN ACT to amend and reenact §33-33-1, §33-33-2, §33-33-3, §33-33-4, §33-33-5, §33-33-6, §33-33-8, §33-33-9, §33-33-10, §33-33- 10a, §33-33-11, §33-33-12, §33-33-13, §33-33-14 and §33-33-15 of the Code of the West Virginia, 1931, as amended; and to amend said code by adding thereto a new section, designated §33-33-16, all relating to financial audits of insurers; defining terms; providing general requirements for filing annual audited financial reports; providing for creation of audit committee; requiring financial reports to include certain items; requiring the designation of an independent certified public accountant by insurers; providing requirements for the independent certified public accountants; prohibiting use of indemnification agreements by independent certified public accountants performing certain audits; permitting mediation or arbitration agreements in certain circumstances; requiring audit to be performed in accordance with generally accepted auditing standards; requiring independent certified public accountants to report adverse financial condition of insurers; requiring independent certified public accountants to report material weaknesses regarding internal control of insurers; requiring independent certified public accountants to provide letter of qualifications; requiring that workpapers of independent certified public accountants be available for review by Insurance Commissioner; providing for requirements of audit committee; requiring certain conduct of insurer regarding preparation of reports and documents; providing requirements for conducting financial audits of Canadian and British insurers; requiring report from insurers regarding internal control over financial reporting; providing exemptions; and providing effective dates of provisions.
(a) All insurers shall have an annual audit by an independent certified public accountant and shall file an audited financial report with the commissioner on or before June 1 for the year ending December 31 immediately preceding. The commissioner may require an insurer to file an audited financial report earlier than June 1 with ninety days advance notice to the insurer.§33-33-3. General requirements related to filing and extensions for filing of annual audited financial reports and audit committee appointment.
(a) The commissioner may not recognize any person or firm as a qualified independent certified public accountant for purposes of performing the annual audited financial report if the person or firm:§33-33-6. Qualifications of independent certified public accountants.
(a) In addition to the annual audited financial report, each insurer shall furnish the commissioner with a written communication as to any unremediated material weaknesses in its internal control over financial reporting noted by the accountant during the audit. Such communication shall be prepared by the accountant within sixty 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 Statement on Auditing Standards (SAS) No. 60, "Communication of Internal Control Related Matters Noted in an Audit" or its replacement, as of December 31 immediately preceding, so as to coincide with the audited financial report discussed in subsection (a), section three of this article, 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.§33-33-10. Communication of internal control related matters noted in an audit.
(a) Workpapers are the 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 audit of the financial statements of an insurer. Workpapers may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of his or her audit of the financial statements of an insurer and which support the accountant's opinion.§33-33-11. Definition, availability and maintenance of independent certified public accountant workpapers.
Prior Calendar Year Direct Written and Assumed Premiums | ||
$0-$300,000,000 | Over $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. |
(a) No director or officer of an insurer shall, directly or indirectly:§33-33-13. Conduct of insurer in connection with the preparation of required reports and documents.
(a) Every insurer required to file an audited financial report pursuant to this article that has annual direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of $500 million, or more, shall prepare a report of the insurer's or group of insurers' internal control over financial reporting, as these terms are defined in section two of this article. The report shall be filed with the commissioner along with the communication of internal control related matters noted in an audit described under section ten of this article. Management's report of internal control over financial reporting shall be filed as of December 31 immediately preceding.§33-33-15. Management's report of internal control over financial reporting.