HB 777 -- Financial Reports by Certain Insurers

Sponsor:  Yates

This bill changes the laws regarding audited financial reports
for certain insurers.  In its main provisions, the bill:

(1)  Exempts insurers with less than $1 million in direct
premiums written in Missouri and less than 1,000 policy or
certificate holders nationwide in a calendar year from the
financial report auditing requirements unless the Director of the
Department of Insurance, Financial Institutions and Professional
Registration finds that the audit is necessary;

(2)  Exempts foreign or alien insurers from filing a report of
internal control over financial reporting when the insurer has
filed a substantially similar report in another state;

(3)  Specifies that a similar 30-day extension is granted for the
filing of the management's report of internal control over
financial reporting when insurers have been granted an extension
of the June 1 filing date for audit reports;

(4)  Requires certain insurers to designate a group of
individuals as its audit committee;

(5)  Changes the content requirements for the financial report;

(6)  Adds several provisions regarding the qualifications of
certified public accountants for insurers' annual audited
financial reports;

(7)  Specifies that insurers can apply, in writing, to the
department director for permission to file audited combined
financial statements in certain situations;

(8)  Removes the statement of liability insurance coverage from
the required contents of the accountant's letter;

(9)  Requires the accountant to have an understanding of the
internal control of the insurer to plan the audit;

(10)  Requires insurers to provide the department director with a
written communication of any unresolved material weaknesses in
its internal control over financial reporting noted during the
audit and the completed or proposed actions to correct them,
unless the actions have been described in the accountant's
communication;

(11)  Establishes the membership requirements and functions of
audit committees;

(12)  Specifies that false or misleading statements to an
accountant in connection with any audit, review, or required
communication will be considered a level three violation under
Section 374.049, RSMo; and

(13)  Requires certain insurers to file a report of internal
control over financial reporting and establishes the requirements
for these reports.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:25 am