Statutes, codes, and regulations
Colorado Administrative Code
Department 700 - Department of Regulatory AgenciesDivision 702 - Division of InsuranceRule 3 CCR 702-3 - FINANCIAL ISSUES
Regulation Regulation 3-1-4 - CONCERNING A COMPANY'S ANNUAL AUDITED FINANCIAL REPORTS, AUDIT COMMITTEE AND INTERNAL CONTROL DEPARTMENT REQUIREMENTS
Section 3 CCR 702-3-1-4-16 - Internal Audit Function Requirements

3 Colo. Code Regs. § 702-3-1-4-16

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Current through Register Vol. 47, No. 24, December 25, 2024
Section 3 CCR 702-3-1-4-16 - Internal Audit Function Requirements
A. Exemption - A company is exempt from the requirements of this section if:
1. The company has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000; and
2. If the company is a member of a group of insurers, the group has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1,000,000,000.
B. Function - The company or group of insurers shall establish an internal audit function providing independent, objective and reasonable assurance to the Audit committee and company management regarding the company's governance, risk management and internal controls. This assurance shall be provided by performing general and specific audits, reviews and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations.
C. Independence - In order to ensure that internal auditors remain objective, the internal control function must be organizationally independent. Specifically, the internal control function will not defer ultimate judgement on audit matters to others, and shall appoint an individual to head the internal audit function who will have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships.
D. Reporting - The head of the internal audit function shall report to the Audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the internal audit function's independence or effectiveness, material findings from completed audits and the appropriateness of corrective actions implemented by management as a result of audit findings.
E. Additional Requirements - If a company is a member of an insurance holding company system or included in a group of insurers, the company may satisfy the internal audit function requirements set forth in this section at the ultimate controlling parent level, an intermediate holding company level or the individual legal entity level.

3 CCR 702-3-1-4-16

37 CR 20, October 25,2014, effective 11/15/2014
37 CR 20, October 25,2014, effective 1/1/2015
37 CR 23, December 10, 2014, effective 1/1/2015
38 CR 17, September 10, 2015, effective 10/1/2015
39 CR 05, March 10, 2016, effective 4/1/2016
39 CR 14, July 25, 2016, effective 8/15/2016
39 CR 23, December 10, 2016, effective 1/1/2017
40 CR 03, February 10, 2017, effective 3/15/2017
40 CR 05, March 10, 2017, effective 4/1/2017
40 CR 13, July 10, 2017, effective 8/1/2017
40 CR 17, September 10, 2017, effective 11/1/2017
43 CR 06, March 25, 2020, effective 4/15/2020
44 CR 03, February 10, 2021, effective 3/15/2021
44 CR 23, December 10, 2021, effective 1/1/2022
46 CR 03, February 10, 2023, effective 3/2/2023