§ 58-10-185. Purpose and scope. - North Carolina Statutes

Part 7. Annual FinancialReporting.

§ 58‑10‑185. Purpose and scope.

(a)        The purpose of thisPart is to improve the Commissioner's ability to monitor the financialcondition of insurers by requiring (i) an annual audit of financial statementsreporting the financial position and the results of operations of insurers byindependent certified public accountants, (ii) communication of internalcontrol related matters noted in an audit, and (iii) management's report ofinternal control over financial reporting.

(b)        Every insurer, asdefined in G.S. 58‑10‑190, shall be subject to this Part. Insurershaving direct premiums written in this State of less than one million dollars($1,000,000) in any calendar year and fewer than 1,000 policyholders orcertificate holders of direct written policies nationwide at the end of thecalendar year shall be exempt from this Part for the year, unless theCommissioner makes a specific finding that compliance is necessary for theCommissioner to carry out statutory responsibilities, except that insurershaving assumed premiums pursuant to contracts of reinsurance of one milliondollars ($1,000,000) or more will not be exempt.

(c)        Foreign or alieninsurers filing the audited financial report in another state, pursuant to thatstate's requirement for filing of audited financial reports, which has beenfound by the Commissioner to be substantially similar to the requirements inthis Part, are exempt from G.S. 58‑10‑195 through G.S. 58‑10‑240if:

(1)        A copy of theaudited financial report, communication of internal control related mattersnoted in an audit, and the accountant's letter of qualifications that are filedwith the other state are filed with the Commissioner in accordance with thefiling dates specified in G.S. 58‑10‑195, 58‑10‑230,and 58‑10‑235, respectively. Canadian insurers may submitaccountants' reports as filed with the Office of the Superintendent ofFinancial Institutions, Canada.

(2)        A copy of anynotification of adverse financial condition report filed with the other stateis filed with the Commissioner within the time specified in G.S. 58‑10‑225.

(d)        Foreign or alieninsurers required to file management's report of internal control overfinancial reporting in another state are exempt from filing the report in thisState provided the other state has substantially similar reporting requirementsand the report is filed with the Commissioner of the other state within thetime specified.

(e)        This Part shall notprohibit, preclude, or in any way limit the Commissioner from ordering,conducting, or performing examinations of insurers in accordance with G.S. 58‑2‑131through G.S. 58‑2‑134, known as the Examination Law.  (2009‑384, s. 1.)