18 Del. Admin. Code § 1405-12.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 1405-12.0 - Financial Auditing

12.1 Each fully insured association or MEWA shall file annually with the Commissioner, and with the members of the fully insured association or MEWA, an audited financial statement for the most recently completed fiscal year that is certified by an independent certified public accountant. If the fully insured association or MEWA fails to file such audited financial statement, the Commissioner may perform the audit and the fully insured association or MEWA shall reimburse the Commissioner for the cost thereof.

12.2 At a minimum, the audited financial statement shall contain the following exhibits for the current and prior fiscal years:

12.2.1 Balance sheet;

12.2.2 Statement of gain or loss from operations;

12.2.3 Statement of changes in financial position;

12.2.4 Proof of minimum surplus, as set forth in Section 6.0 of this regulation;

12.2.5 Notes to financial statements; and

12.2.6 Managemfully insured ent and internal control letters.

12.3 The financial statement shall be prepared in accordance with generally accepted accounting principles with the following exceptions:

12.3.1 Loss reserves shall not be discounted. However, the Commissioner may approve discounting of loss reserves if the fully insured association's or MEWA's actuary certifies that said discounting is in accordance with the customary practice of the traditional insurance industry, and that said discounting will not adversely affect the fiscal integrity of the association or MEWA; and

12.3.2 Any other exceptions to generally accepted accounting principles the Commissioner finds necessary to preserve the fiscal integrity of the fully insured association or MEWA.

12.4 Each fully insured association or MEWA shall include with the financial statement a statement of opinion as to the loss and loss expense reserves certified by an actuary.

12.5 Each fully insured association or MEWA shall file a copy of the fidelity bond, or evidence acceptable to the Commissioner, covering the administrator, the fully insured association or MEWA employees and service agents with the audited financial statement.

12.6 In addition to the annual audited financial statement, the Commissioner may require any fully insured association or MEWA to file additional financial information, including, but not limited to, interim financial reports, additional financial reports or exhibits, or statements considered necessary to secure complete information concerning the condition, solvency, experience, transactions, or affairs of the fully insured association or MEWA. The Commissioner shall establish reasonable deadlines for filing these additional reports, exhibits, or statements. The Commissioner may require verification of any additional required information.

12.7 Each fully insured association or MEWA shall file annually with the Commissioner the methodology for establishing the annual contributions of its members. Such contributions shall be based on reasonable assumptions and certified by an actuary.

12.8 An insurer offering a health benefit plan to a fully insured association or MEWA with covered lives in Delaware shall comply with all financial reporting requirements applicable to traditional insurance companies doing business in Delaware. Instructions for annual filings by traditional insurance companies doing business in Delaware are set forth on the Department's website.

18 Del. Admin. Code § 1405-12.0

22 DE Reg. 509 (12/1/2018) (Final)