Section 70. Designation of independent certified public accountant

A. Each insurer required by this chapter to file an annual Audited Financial Report, within 60 days after becoming subject to the requirement, shall register with the commission in writing the name and address of the independent certified public accountant retained to conduct the annual audit set forth in this chapter.

B. As part of this registration, the insurer shall obtain a letter from the accountant and file a copy with the commission stating that the accountant is aware of the provisions of the insurance code and the rules and regulations of the insurance department of the state of domicile that relate to accounting and financial matters, and affirming that the accountant will express an opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or otherwise permitted by that department, specifying such exceptions as the accountant may believe appropriate.

C. If the accountant who was the insurer's accountant for the immediately preceding filed Audited Financial Report is dismissed or resigns, the insurer shall notify the commission within five business days of this event. The insurer also shall furnish the commission with a separate letter within 10 business days of the above notification stating whether in the 24 months preceding the event there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which if not resolved to the satisfaction of the former accountant, would have caused the accountant to make reference to the subject matter of the disagreement in the opinion. The disagreements required to be reported in response to this subsection include those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction. Disagreements contemplated by this subsection are those that occur at the decision-making level, i.e., between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. The insurer also in writing shall request the former accountant to furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurer's letter and, if not, stating the reasons for disagreement; and the insurer shall furnish a responsive letter from the former accountant to the commission together with its own letter.

Historical Notes

Derived from Regulation 39, Case No. INS910072, § 8, eff. September 1, 1991; amended, Volume 16, Issue 05, eff. January 1, 2000; Volume 24, Issue 12, eff. January 1, 2010.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.