SB 427 - Beginning January 1, 2018, this act requires certain insurers and insurance groups to establish an internal audit function.
An insurer is exempt from internal audit requirements if the insurer: (1) has a direct written and unaffiliated assumed premium totaling less than $500 million, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, and (2) is a member of a group of insurers that has annual direct written and unaffiliated assumed premium totaling less than $1 billion, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood program.
Insurers and groups of insurers who were previously exempt but lose their exemption have one year after the year the threshold was exceeded to come into compliance.
The insurer or group of insurers' auditing committee is responsible for overseeing the internal audit function and for granting a person or persons suitable authority and resources to fulfill the responsibilities required under this act. The internal audit function shall provide independent, objective, and reasonable assurance to the audit committee and insurer management regarding the insurer's governance, risk management, and internal controls. The internal audit function shall be provided by performing audits, reviews, tests, and other techniques as necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations.
Internal audit functions shall be organizationally independent, though this does not preclude dual-reporting relationships.
The head of the internal audit function shall report to the audit committee at least annually.
These provisions are identical to SB 427 (2017) and to provisions in HCS/HBs 337, 259, & 575 (2017).
ERIC VANDER WEERD