Haw. Code R. § 16-185-113.1 - Internal audit function requirements
(a) The insurer or
group of insurers shall establish an internal audit function providing
independent, objective, and reasonable assurance to the audit committee and
insurer management regarding the insurer'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.
(b) In order to ensure that internal auditors
remain objective, the internal audit function must be organizationally
independent. Specifically, the internal audit 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.
(c)
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.
(d) If an insurer is a
member of an insurance holding company system or included in a group of
insurers, the insurer 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.
(e) An insurer is exempt from the
requirements of this section if:
(1) The
insurer 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
insurer is a member of a group of insurers that has annual direct written and
unaffiliated assumed premium including international direct and assumed
premium, but excluding premiums reinsured with the Federal Corp Insurance
Corporation and Federal Flood Program, less than $1,000,000,000.
Notes
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