Nev. Admin. Code § 694C.210 - Annual audit
1. Except as
otherwise provided in subsection 2 or 7, a captive insurer shall have an annual
audit by an independent certified public accountant who is authorized by the
Commissioner to conduct the audit. The captive insurer shall file the audited
financial report with the Commissioner on or before June 30 for the year ending
on the immediately preceding December 31.
2. Unless exempted pursuant to subsection 7
or NAC 680A.172,
680A.199 or
680A.205, a state-chartered risk
retention group shall have an annual audit pursuant to NAC
680A.172 to
680A.211, inclusive. Unless the
Commissioner grants an extension pursuant to subsection 5 or NAC
680A.177, a state-chartered risk
retention group shall file the audited financial report with the Commissioner
on or before June 1 for the year ending on the immediately preceding December
31.
3. The Commissioner will deem
the annual audit conducted pursuant to this section to be a part of the annual
report of financial condition of the captive insurer which is filed pursuant to
NRS
NRS
694C.400.
4. The annual audit required by this section
must include:
(a) A statement, prepared by the
independent certified public accountant who conducted the audit, certifying
that all financial requirements established by law, the articles of
incorporation, the bylaws and the business plan of the captive insurer have
been met.
(b) The opinion of the
independent certified public accountant who conducted the audit which states
that the financial statements of the captive insurer were examined in
accordance with generally accepted auditing standards, as determined by the
American Institute of Certified Public Accountants and included in the
publication AICPA Professional Standards , which is adopted by reference in NAC
694C.090. The opinion must:
(1) Cover all years presented in the
audit;
(2) Be addressed to the
captive insurer on stationery of the accountant; and
(3) Include the address of the accountant
issuing the opinion, original manual signatures and the date on which the
opinion was issued.
(c)
A report of an evaluation of the internal controls of the captive insurer
relating to:
(1) The methods and procedures
used in the securing of assets; and
(2) The reliability of the financial records
of the captive insurer, including, without limitation, the controls for the
system of authorization and approval, and the separation of duties.
(d) A letter from the independent
certified public accountant which includes:
(1) A statement that the accountant is
independent with respect to the captive insurer and that he or she conforms to
the standards of his or her profession as set forth in the AICPA Professional
Standards , published by the American Institute of Certified Public
Accountants, and adopted by reference in NAC
694C.090, and the pronouncements
of the Financial Accounting Standards Board;
(2) A general description of the background
and experience of the staff of the accountant engaged in the audit, including
the experience of the staff in auditing captive insurers and other insurance
companies;
(3) A statement that the
accountant understands that the audited annual report and his or her opinions
thereon will be filed with the Commissioner pursuant to subsection 1;
(4) A statement that the accountant will
comply with NAC
694C.230 and consents and agrees
to make his or her work papers available for review by the Commissioner or a
designee thereof; and
(5) A
statement that the accountant is properly licensed by the appropriate state
licensing authority and is a member in good standing of the American Institute
of Certified Public Accountants.
(e) Financial statements, including:
(1) A balance sheet;
(2) A statement of gain or loss from
operations;
(3) A statement of
changes in financial position;
(4)
A statement of changes in paid-up capital, gross paid-in contributed surplus
and unassigned money or assets; and
(5) Notes to financial statements required by
generally accepted accounting principles, or as required by any other
comprehensive basis of accounting in use by the captive insurer and approved by
the Commissioner, including:
(I) A
reconciliation of differences, if any, between the audited financial report and
the report filed with the Commissioner pursuant to
NRS
694C.400, with a written description of the
nature of these differences;
(II) A
summary of ownership and relationships of the company and all affiliated
corporations or companies insured by the captive insurer; and
(III) A narrative explanation of all material
transactions and balances with the captive insurer.
(f) An annual actuarial
certification of loss reserves and loss expense reserves which includes an
opinion of the adequacy of the loss reserves and loss expense reserves of the
captive insurer, in a format acceptable to the Commissioner. The person who
certifies the adequacy of the reserves must be approved by the Commissioner and
must be a Fellow of the Casualty Actuarial Society, a Fellow of the Society of
Actuaries, a member in good standing of the American Academy of Actuaries or a
person who has otherwise demonstrated competence in the evaluation of loss
reserves to the Commissioner. The annual actuarial certification must be in
such form as the Commissioner determines appropriate.
5. Upon a showing of good cause by the
captive insurer and subject to the provisions of
NRS
694C.390 and
694C.400,
the Commissioner may grant a reasonable extension of the filing date for the
annual audit required by this section. Such a request for extension must be
submitted to the Commissioner in writing not less than 10 days before the date
on which the audited financial report is due and must contain sufficient
details to permit the Commissioner to make an informed decision with respect to
the requested extension.
6. If an
extension for the filing of the audited financial report is granted pursuant to
subsection 5, the same extension will be deemed granted for the filing of the
Management's Report on Internal Control Over Financial Reporting.
7. Upon a showing of good cause by the
captive insurer and subject to the provisions of
NRS
694C.390 and
694C.400,
the Commissioner may grant an exemption from compliance with any provisions of
this section if he or she determines, upon review of an application for
exemption that compliance with any or all provisions of this section would
constitute a financial or organizational hardship on the captive insurer or
that the captive insurer has shown other good cause why such an exemption
should be granted. A request for an exemption must be submitted in writing not
less than 30 days before the date on which the audited financial report is due
and must contain sufficient details to permit the Commissioner to make an
informed decision with respect to the requested exemption.
Notes
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