OCI has set standards for accounting practices related to the preparation and submission of annual audited financial reports, annual financial statements and examinations required of insurers doing business in Wisconsin.
Related statutes or rules
Plain language summary
The provisions of subch.
I of ch. 50, Wis. Adm. Code establish the requirement to file an annual audited financial report (CPA audit) and the related standards including applicability, auditor qualification requirements and the auditor duty to report adverse financial conditions. The proposed rule updates and adds certain general requirements including those related to auditor independence, the scope of the audit and report, communication of internal control matters noted in the audit, an audit committee, and management's report of internal control over financial reporting. With respect to auditor independence the proposed rule provides that the lead auditor may not serve in that capacity for a period more than five years. The rule specifies various non-audit services that, if performed by the auditor, would impair the auditor's independence in relation to the insurer. Insurers with less than $100 million in direct and assumed premium may request a waiver from the requirement based upon financial or organizational hardship. Partners and senior managers of the audit engagement may not serve as a member of the board of directors, or officer, or controller, or similar position of the insurer if employed by the independent accounting firm that audited the insurer during the one-year period which preceded the most current statutory opinion. With respect to corporate responsibility the proposed rule provides that every insurer required to file an annual audited financial report shall also be required to have an audit committee that is directly responsible for the appointment, oversight and compensation of the auditor. Insurers with less than $ 500 million in direct and assumed premium may apply for a waiver from this requirement based on hardship. With respect to internal control by an insurer over financial reporting the proposed rule requires that management of insurers with more than $ 500 million in direct and assumed premium file a report with the Commissioner regarding its assessment of internal control over financial reporting, including a statement whether the controls are effective to provide reasonable assurance regarding the reliability of the statutory financial statements and disclosure of any unremediated material weaknesses in internal control over financial reporting.
Comparison with federal regulations
There are no federal regulations which address annual financial reports, annual financial statements and examinations to be prepared by insurers doing business in Wisconsin. Certain insurers, however are SEC registrants, and are subject to audit committee independence and preapproval requirements of the Securities and Exchange Act of 1934, management reports on internal control over financial reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and SEC regulations promulgated thereunder.
Comparison of rules in adjacent states
Illinois: Il. Adm. Code Title 50, Part 925, Section
925.70, requires annual audited financial reports from insurers doing business in the state that are prepared by a qualified independent certified public accountant. The state has indicated to the NAIC that consideration of the Model audit regulation will be considered in the fall of 2008.
Iowa: Iowa Adm. Code 191-5.25, requires annual audited financial reports from insurers doing business in the state that are prepared by a qualified independent certified public accountant. The state has indicated to the NAIC that it has initiated the process for consideration of the Model audit regulation through prehearing exposure to be followed by submission to its rules committee in late 2008.
Michigan: Mich. Comp. Laws, Ch.
500, requires annual audited financial reports from insurers authorized to do business in the state that are prepared by an independent certified public accountant. The state has indicated to the NAIC that there is legislation pending to modify its s. 10 concerning audit reports.
Minnesota: Minn. Stat. Ch. 60A.129, Subd. 3, requires annual audited financial reports from insurers doing business in the state that are prepared by an independent certified public accountant. The state has indicated to the NAIC that consideration of the Model audit regulation is contemplated in 2009.
Summary of factual data and analytical methodologies
The proposed rule is based upon a model regulation adopted by the National Association of Insurance Commissioners (NAIC) at the June, 2006, national meeting. The proposed rule is under consideration as it has been recommended by the NAIC, will increase the ability of management and regulators to monitor financial status, and will provide control documentation contemplated in the enhanced financial surveillance procedures adopted by the NAIC and required as an accreditation standard for statutory examinations conducted after January 1, 2010.
Analysis and supporting documentation used to determine effect on small businesses
The proposed rule establishes direct and assumed premium thresholds and waiver provisions that minimize the effect upon smaller insurers.
Initial Regulatory Flexibility Analysis
This rule does not impose any additional requirements on small businesses and will have little or no effect on small businesses.
Fiscal Estimate
Effect on private sector
This rule change may have a significant financial effect on a small number of companies in the private sector regulated by OCI. Costs associated with implementing the provisions of the proposed rule, other than those related to enhanced documentation of internal controls over financial reporting will not be significant. Provisions related to enhanced documentation of internal controls over financial reporting apply only to insurers with more than $ 500 million in direct and assumed premium, and a majority of these insurers have developed the systems and procedures necessary to achieve compliance voluntarily or as a result of their status as SEC registrants.
State fiscal effect
None.
Local fiscal effect
None.
Long-range fiscal implications
None.
Notice of Hearing
Physical Therapists Affiliated
Credentialing Board
NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Physical Therapists Affiliated Credentialing Board in ss.
15.085 (5) (b),
227.11 (2),
448.53 (2) and
448.55 (3), Stats., and interpreting ss.
448.535 (2) and
448.55 (3), Stats, the Physical Therapists Affiliated Credentialing Board will hold a public hearing at the time and place indicated below to consider an order revising sections
PT 2.04,
3.01 and
9.02 to
9.04, relating to examination waivers, temporary licenses and continuing education.
Hearing Information
Date: July 10, 2008
Time: 9:15 A.M.
Location: 1400 East Washington Avenue
(Enter at 55 North Dickinson Street)
Room 121A
Madison, Wisconsin
Submission of Written Comments
Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may be submitted in writing without a personal appearance by mail addressed to Pamela Haack, Paralegal, Department of Regulation and Licensing, Office of Legal Counsel, 1400 East Washington Avenue, Room 152, P.O. Box 8935, Madison, Wisconsin 53708, email at
pamela.haack@drl.state.wi.us. Comments must be received on or before July 14, 2008, to be included in the record of rule-making proceedings.
Agency Contact Person
Pamela Haack, Paralegal, Department of Regulation and Licensing, Office of Legal Counsel, 1400 East Washington Avenue, Room 152, P.O. Box 8935, Madison, Wisconsin 53708; telephone 608-266-0495; email at pamela.haack@ drl.state.wi.us.
Analysis Prepared by the Department of Regulation and Licensing.
Statutes interpreted
Statutory authority
Explanation of agency authority
The Physical Therapists Affiliated Credentialing Board has the authority to promulgate rules under ss.
448.53 (2) and
448.55 (3), Stats.
Related statute or rule
Plain language analysis
The proposed changes to the physical therapy rules are intended to address three separate items. To begin with, the board is repealing s.
PT 2.04. That section contained a waiver provision for applicants, provided they applied prior to April 1, 2004. Because the deadline to apply for an examination waiver under that provision has expired and is therefore not applicable, the board is eliminating it. In addition, the board is extending the potential duration of a temporary license. Currently, a temporary license is only valid for three months. This proposal would allow the board to extend a temporary license twice, each for three month intervals, provided the licensee could demonstrate hardship. However, licensees would only be permitted to practice under a temporary license for nine months. The board had encountered several applicants who, for various reasons, were unable to take the examination during the required three month timeframe and thus believed that offering these extensions would accommodate those difficulties. Finally, the board has streamlined its continuing education provisions in an effort to eliminate any confusion surrounding how to calculate the required number of hours and how to determine what programs are acceptable. A new table better defines the various categories as well as the number of contact hours each may receive.
SECTION 1 repeals s.
PT 2.04 since the deadline to apply for an examination waiver under that provision has expired. Section
PT 2.04 applied to applicants who were eligible for an examination waiver prior to April 1, 2004.
SECTION 2 amends s.
PT 3.01 (5) to allow the board the ability to extend a temporary license for reasons of hardship. Two, three-month extensions would be permitted. Licensees would only be permitted to practice under a temporary license for nine months.
SECTION 3 repeals the definition of continuing education unit (“CEU") found in s.
PT 9.02 (1) and replaces it with the term “contact hour." Contact hour is defined as not less than 50 minutes that a licensee actually spends attending an acceptable continuing education program. This term is used throughout the section that addresses continuing education requirements.
SECTION 4 repeals the definition of “hour of continuing education" found in s.
PT 9.02 (3). That term is replaced with “contact hour" as found in SECTION 3.
SECTION 5 amends s.
PT 9.02 (1) and
(2) by adding the requirement for both physical therapists and physical therapist assistants that four hours of their required continuing education be in the area of ethics and jurisprudence. Previously, this requirement had been included in s.
PT 9.04 (2) (c).
SECTION 6 renumbers s.
PT 9.04 (2) (intro.) and further amends it by referring readers of the rule to a newly numbered table that identifies various categories of continuing education.
SECTION 7 repeals s. PT 9.04 (2) (a) to (c) which referenced the old continuing education table. The table has been modified and is renumbered under this proposal. This section also identified the number of required continuing education hours for both physical therapists and physical therapist assistants. That information is now included under s.
PT 9.02 (1) and
(2) and found in SECTION 5.
SECTION 8 repeals Table PT 9.04 – 1 and Table PT 9.04 – 2. A new table has instead been created. It identifies various categories of continuing education and the number of contact hours each one is eligible to receive for each category.
SECTION 9 creates Table PT 9.04. The new table modifies a few of the continuing education categories and identifies the number of contact hour limits each category is entitled to receive.
Comparison with federal regulations
There is no existing or proposed federal regulation.
Comparison with rules in adjacent states
Minnesota: Twenty hours of continuing education are required every two years. No ethics or jurisprudence credits are required. Minnesota grants temporary permits to physical therapists (different for new graduates, physical therapists licensed in another state, and foreign educated physical therapists), but does not allow for extensions. Contact hour is defined as an instructional session of 60 minutes, excluding coffee breaks, registration, meals with or without speaker, and other social activities. Three categories of activity are defined and are based upon specified credit standards.
Illinois: Temporary practice is allowed for six months by a person in Illinois to assist in the case of medical emergency or to engage in a special physical therapy project, and who meets the qualifications for a physical therapy project and is licensed as a physical therapist in another state.
Following notification of eligibility for examination, an applicant who fails to take the examination for a license within sixty days of the notification shall forfeit his or her fee and his or her right to practice as a physical therapist or physical therapist assistant until such time as the applicant has passed the appropriate examination. Any applicant failing the examination three times in any jurisdiction will not be allowed to sit for another examination until the applicant has presented satisfactory evidence to the board of appropriate remedial work as set forth in the rules and regulations. If an applicant neglects, fails or refuses to take an examination or fails to pass an examination for a license or otherwise fails to complete the application process within three years after filing the application, the application shall be denied. However, such applicant may make a new application for examination accompanied by the required fee, and must furnish proof of meeting qualifications for examination in effect at the time of new application. One continuing education hour equals 50 minutes. Credit conversions are spelled out in the rule.
Iowa: Forty hours of continuing education are required per biennium. One hour of continuing education equals fifty minutes. Six months of supervised practice is allowed after the receipt of an application by examination. Three months of supervised practice is allowed after the receipt of an application by endorsement. Continuing education conversions are spelled out in the rule.
Michigan: Michigan does not have continuing education requirements or temporary permits. The practice of physical therapy may only be conducted by prescription of a licensed physical therapist.
Summary of factual data and analytical methodologies
The board conducted an extensive review of its rules with its legal counsel after identifying the need to clarify portions of the rule. Continuing education providers were consulted. Most of the discussion centered on the conversion of credits for Class I and Class II Activities. The rule was revised as deemed necessary.
Analysis and supporting documents used to determine effect on small business
The effect on small business is no different from the original rule.
Section
227.137, Stats., requires an “agency" to prepare an economic impact report before submitting the proposed rule-making order to the Wisconsin Legislative Council. The Department of Regulation and Licensing is not included as an “agency" in this section.
Initial Regulatory Flexibility Analysis
These proposed rules will have no significant economic impact on a substantial number of small businesses, as defined in s.
227.114 (1), Stats. The Department's Regulatory Review Coordinator may be contacted by email at
larry.martin@drl.state.wi.us, or by calling 608-266-8608.
Fiscal Estimate
Summary
The department estimates that this rule will require staff time in the Division of Professional Credentialing and Office of Legal Counsel. The one-time salary and fringe costs in the Division of Professional Credentialing and Office of Legal Counsel are estimated at $1,200.
Anticipated costs incurred by private sector
The department finds that this rule has no significant fiscal effect on the private sector.
Text of Proposed Rule
SECTION 1. PT 2.04 is repealed.
SECTION 2. PT 3.01 (5) is amended to read:
PT 3.01 (5) The duration of a temporary license to practice physical therapy under supervision granted under this section shall be for a period of 3 months or until the holder receives failing examination results, whichever is shorter, unless the board grants an extension of the temporary license. A temporary license may be renewed for a period of 3 months, and may be renewed a second time for a period of 3 months for reasons of hardship. Practice under a temporary license may not exceed 9 months total duration.
SECTION 3. PT 9.02 (1) is repealed and recreated to read:
PT 9.02 (1) “Contact hour" means not less than 50 minutes a licensee spends in actual attendance at or completion of acceptable continuing education.
SECTION 4. PT 9.02 (3) is repealed.
SECTION 5. PT 9.03 (1) and (2) are amended to read:
