Effective 01 Jan 2019, see footnote

375.1025. Definitions. — As used in sections 375.1025 to 375.1062, the following terms shall mean:

(1) "Accountant" or "independent certified public accountant", an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in all states in which they are licensed to practice. For Canadian and British companies, it means a Canadian-chartered or British-chartered accountant;

(2) "Affiliate" or "affiliated", a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified;

(3) "AICPA", the American Institute of Certified Public Accountants;

(4) "Audit committee", a committee (or equivalent body) established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the internal audit function of any insurer or group of insurers, if applicable, and external audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of such controlled insurers solely for the purposes of sections 375.1025 to 375.1062 at the election of the controlling person. Such election shall be exercised under subsection 7 of section 375.1053. If an audit committee is not designated by the insurer, the insurer's entire board of directors shall constitute the audit committee;

(5) "Audited financial report", includes those items specified in section 375.1032;

(6) "Department", the department of commerce and insurance;

(7) "Director", the director of the department of commerce and insurance;

(8) "Group of insurers", those licensed insurers included in the reporting requirements of sections 382.010 to 382.300, or a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over financial reporting;

(9) "Indemnification", an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing of other misrepresentations made by the insurer or its representatives;

(10) "Independent board member", the same meaning as described in subsection 5 of section 375.1053;

(11) "Insurer", an insurer certified to do business in this state pursuant to section 375.161 or 375.831, and to companies authorized to transact business in this state pursuant to chapters 354, 376, 377, 378, 379 and 381;

(12) "Internal audit function", a person or persons that provide independent, objective, and reasonable assurance regarding an insurer's governance, risk management, and internal controls, designed to add value and improve an organization's operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management control and governance processes;

(13) "Internal control over financial reporting", a process effected by an entity's board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements, i.e., those items specified in subdivisions (2) to (6) of subsection 2 and subsection 3 of section 375.1032 and includes those policies and procedures that:

(a) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;

(b) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements, i.e., those items specified in subdivisions (2) to (6) of subsection 2 and subsection 3 of section 375.1032, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and

(c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements, i.e., those items specified in subdivisions (2) to (6) of subsection 2 and subsection 3 of section 375.1032;

(14) "NAIC", the National Association of Insurance Commissioners;

(15) "SEC", the United States Securities and Exchange Commission;

(16) "Section 404", Section 404 of the Sarbanes-Oxley Act of 2002, as amended, and the SEC's rules and regulations promulgated thereunder;

(17) "Section 404 report", management's report on internal control over financial reporting, as defined by the SEC and the related attestation report of the independent certified public accountant as described in subsection 1 of section 375.1030;

(18) "SOX compliant entity", an entity that either is required to be or voluntarily is compliant with all of the following provisions of the Sarbanes-Oxley Act of 2002, as amended:

(a) The preapproval requirements of Section 201 (Section 10A(i) of the federal Securities Exchange Act of 1934);

(b) The audit committee independence requirements of Section 301 (Section 10A(m)(3) of the federal Securities Exchange Act of 1934); and

(c) The internal control over financial reporting requirements of Section 404.

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(L. 1991 H.B. 385, et al. § 2, A.L. 2009 H.B. 577, A.L. 2018 S.B. 593)

Effective 1-01-19