Ins 50.16Ins 50.16 Conduct of insurer in connection with the preparation of required reports and documents. Ins 50.16(1)(1) No director or officer of an insurer shall, directly or indirectly: Ins 50.16(1)(a)(a) Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review or communication required under this chapter. Ins 50.16(1)(b)(b) Omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with any audit, review or communication required under this chapter. Ins 50.16(2)(2) No officer or director of an insurer, or any other person acting under the direction thereof, shall directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any independent certified public accountant engaged in the performance of an audit pursuant to this chapter if that person knew or should have known that the action, if successful, could result in rendering the insurer’s financial statements materially misleading. In this subsection, actions that “if successful, could result in rendering the insurer’s financial statements materially misleading” include actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead or fraudulently influence an independent certified public accountant: Ins 50.16(2)(a)(a) To issue or reissue a report on an insurer’s financial statements that is not warranted in the circumstances, due to material violations of statutory accounting principles prescribed by the commissioner, generally accepted auditing standards, or other professional or regulatory standards. Ins 50.16(2)(b)(b) Not to perform audit, review or other procedures required by generally accepted auditing standards or other professional standards. Ins 50.16(2)(d)(d) Not to communicate matters to an insurer’s audit committee. Ins 50.16 HistoryHistory: CR 08-053: cr. Register December 2008 No. 636, eff. 1-1-09. Ins 50.17Ins 50.17 Management’s report of internal control over financial reporting. Ins 50.17(1)(1) Every insurer required to file an audited financial report pursuant to this subchapter that has annual direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of $ 500,000,000 or more shall prepare a report of the insurer’s or group of insurers’ internal control over financial reporting as the terms are defined in s. Ins 50.01. The report shall be filed with the commissioner along with the Communication of Internal Control Related Matters Noted in an Audit described in s. Ins 50.12. Management’s report of internal control over financial reporting shall be as of December 31 immediately preceding. Ins 50.17(2)(2) Notwithstanding the premium threshold in sub. (1), the commissioner may require an insurer to file management’s report of internal control over financial reporting if the insurer is in any risk based capital event as described in s. Ins 51.01, or the insurer is in financially hazardous condition. Ins 50.17(3)(3) In lieu of the management’s report of internal control over financial reporting, an insurer or a group of insurers may file a report described in sub. (4) if any of the following criteria are applicable: Ins 50.17(3)(b)(b) The insurer is part of a holding company system whose parent is directly subject to Section 404. Ins 50.17(3)(c)(c) The insurer is not directly subject to Section 404 but is a SOX Compliant Entity. Ins 50.17(3)(d)(d) The insurer is a member of a holding company system whose parent is not directly subject to Section 404 but is a SOX Compliant Entity. Ins 50.17(4)(4) An insurer qualifying under sub. (3) may file its or its parent’s Section 404 report and an addendum in satisfaction of the requirements under sub. (1) or (2), provided that the internal controls of the insurer or group of insurers having a material impact on the preparation of the insurer’s or group of insurer’s audited statutory financial statements, those items included in s. Ins 50.06 (2) (b) to (3), were included in the scope of the Section 404 report. The addendum shall be a positive statement by management that there are no material processes with respect to the preparation of the insurer’s or group of insurers’ audited statutory financial statements, those items included in s. Ins 50.06 (2) (b) to (3), excluded from the Section 404 report. If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements and those internal controls were not included in the scope of the Section 404 report, the insurer or group of insurers may either file: Ins 50.17(4)(a)(a) A management’s report of internal control over financial reporting pursuant to sub. (1) or (2); or Ins 50.17(4)(b)(b) The Section 404 report and a management’s report of internal control over financial reporting for those internal controls that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements not covered by the Section 404 report. Ins 50.17(5)(5) Management’s report of internal control over financial reporting shall include: Ins 50.17(5)(a)(a) A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting. Ins 50.17(5)(b)(b) A statement that management has established internal control over financial reporting and an assertion to the best of management’s knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles. Ins 50.17(5)(c)(c) A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting. Ins 50.17(5)(d)(d) A statement that briefly describes the scope of work that is included and whether any internal controls were excluded. Ins 50.17(5)(e)(e) Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of December 31 immediately preceding. Management may not conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its internal control over financial reporting. Ins 50.17(5)(f)(f) A statement regarding the inherent limitations of internal control systems. Ins 50.17(5)(g)(g) Signatures of the chief executive officer and the chief financial officer, or equivalent position or title.