Mich. Admin. Code R. 500.106

Current through Vol. 24-22, December 15, 2024

Section R. 500.106 - Audited financial statements

Rule 6.

(1) No later than 5 months after the fiscal year end of the captive insurance company, the captive insurance company shall file with the director audited financial statements of the captive insurance company prepared by an independent certified public accountant.

(2) An independent certified public accountants audit of a captive insurance company shall include the following:

(a) The independent certified public accountants opinion covering all years under audit. The opinion shall be addressed to the captive insurance company on the independent certified public accountants stationary, shall bear the original handwritten signature of the independent certified public accountant, and shall be dated.

(b) A report of evaluation of the internal controls of the captive insurance company. This report shall include an evaluation of the internal controls of the company relating to the methods and procedures used in the securing of assets and the reliability of the financial records.

(c) An independent certified public accountants letter stating the independent certified public accountant is all of the following:

(i) Independent with respect to the captive insurance company and conforms to the standard of the profession as contained in the code of professional ethics and pronouncements of the American institute of certified public accountants and pronouncements of the financial accounting standards board.

(ii) Properly licensed by an appropriate state regulatory authority or similar regulatory authority.

(iii) A member in good standing with the American institute of certified public accountants or similar organization.

(iv) The general background and experience of the staff engaged in the audit, including the staffs experience in auditing captive and other insurance companies.

(v) The independent certified public accountant agrees to make the audit work papers available to the director or the directors designee.

(3) The captive insurance company shall require the independent certified public accountant to do both of the following:

(a) Make the work papers prepared in the conduct of the captive insurance companys audit available to the director.

(b) Retain the audit work papers for a period not less than 7 years after the last day of the applicable reporting period.

(4) The director may, at his or her discretion, exempt a captive insurance company from the requirements of this rule.

Mich. Admin. Code R. 500.106

2015 MR 12, Eff. June 25, 2015