Wis. Admin. Code Office of the Commissioner of Insurance Ins 50.01

Current through May 28, 2024

Section Ins 50.01 - Definitions

In this chapter:

(1) "Alien insurer" has the meaning provided under s. 600.03(2), Stats.

(1g) "Affiliate" of, or person "affiliated" with, a specific person means a person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

(1r) "Audit committee" means a committee or equivalent body established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the internal audit function of an insurer or group of insurers, and audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of the controlled insurers solely for the purposes of this chapter at the election of the controlling person under s. Ins 50.15 (6). If an audit committee is not designated by the insurer, the insurer's entire board of directors shall constitute the audit committee.

(2) "Audited financial report" means a financial report prepared and conforming to s. Ins 50.06.

(3) "Executive officer" means any individual charged with the active management and control in an executive capacity of a person, whether incorporated or unincorporated and includes, but is not limited to, a chair of the board, president, vice president, treasurer, secretary, controller, and any individuals performing similar functions.

(4) "Foreign insurer" has the meaning provided under s. 600.03(20), Stats.

(4g) "Group of insurers" means those licensed insurers included in the reporting requirements of ch. 617, Stats., or a set of insurers identified by the insurers' management or controlling person for the purpose of assessing the effectiveness of internal control over financial reporting.

(4m) "Indemnification" means an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing or other misrepresentations made by the insurer or its representatives.

(4r) "Independent board member" has the meaning given in s. Ins 50.15 (4).

(5) "Independent certified public accountant" means:

(a) An independent certified public accountant, or independent accounting firm, in good standing with the American institute of certified public accountants and in all states in which the accountant or firm is licensed, or required to be licensed, to practice; or

(b) For Canadian and British companies, a Canadian chartered or British chartered accountant.

(6) "Insurer" means an insurer licensed under s. 185.981, Stats., or ch. 611, 612, 613, 614 or 618, Stats., and the state life fund.

(6g) "Internal audit function" means a person or persons who provide independent, objective, and reasonable assurance designed to add value and improve an organization's operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

(6m) "Internal control over financial reporting" means a process effected by an entity's board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of financial statements, including the items specified in s. Ins 50.06 (2) (b) to (3), and includes those policies and procedures that:

(a) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets;

(b) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements, including those items specified in s. Ins 50.06 (2) (b) to (3), and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and

(c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the audited financial statements, including those items specified in s. Ins 50.06 (2) (b) to (3).

(7) "Policyholder surplus" means capital and surplus.

(7d) "SEC" means the United States Securities and Exchange Commission.

(7h) "Section 404" means section 404 of the Sarbanes-Oxley Act of 2002 and the SEC's rules and regulations promulgated thereunder.

(7p) "Section 404 Report" means management's report on internal control over financial reporting as defined by the SEC and the related attestation report of the independent certified public accountant.

(7t) "SOX Compliant Entity" means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002:

(a) The preapproval requirements of section 201, section 10 A (i), of the Securities and Exchange Act of 1934;

(b) The audit committee independence requirements of section 301, section 10 A (m) (3) of the Securities and Exchange Act of 1934; and

(c) The internal control over financial reporting requirements of Section 404, item 308 of SEC Regulation S-K.

(8) "State of domicile" means the state where an insurer is domiciled or, for an alien insurer, its port of entry state.

(8m) "Ultimate controlling person" means a person who is not controlled by any other person.

(9) "Work papers" means 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 independent certified public accountant's examination of the financial statements of an insurer. "Work papers" include, but are not limited to, audit planning documentation; audit guides; work programs; analyses; memoranda; letters of confirmation and representation; abstracts of company documents; financial compilations, even if not produced during a full audit; and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of examination of the financial statements of an insurer or which support the opinion of the independent certified public accountant regarding the financial statements.

Wis. Admin. Code Office of the Commissioner of Insurance Ins 50.01

Cr. Register, July, 1993, No. 451, eff. 8-1-93; correction in (4) made under s. 13.93(2m) (b) 7, Stats., Register, June, 2001, No. 546; CR 07-023: cr. (4m), Register September 2007 No. 621, eff. 10-1-07; CR 08-053: cr. (1g), (1r), (4g), (4r), (6m), (7d), (7h), (7p), (7t) and (8m) Register December 2008 No. 636, eff. 1-1-09.

Amended by, CR 17-015: am. (1r), cr. (6g) Register December 2017 No. 744, eff. 1/1/2018

Amended by, CR 22-075: am. (9) Register June 2023 No. 810, eff. 7/1/2023