§ 26-3-318 — Management's report of internal control over financial reporting

(a) Every insurer required to file an audited financial
report pursuant to this article that has annual direct written
and assumed premiums, excluding premiums reinsured with the
federal crop insurance corporation and federal flood program, of
five hundred million dollars ($500,000,000.00) or more shall
prepare a report of the insurer's or group of insurers' internal
control over financial reporting. The report shall be filed
with the commissioner along with the communication of internal
control related matters noted in an audit described in W.S. 26-
3-310. Management's report of internal control over financial
reporting shall be as of the immediately preceding December 31.
(b) Notwithstanding the premium threshold in subsection
(a) of this section, the commissioner may require an insurer to
file management's report of internal control over financial
reporting if the insurer is in any RBC level event or meets any
one (1) or more of the standards of an insurer deemed to be in
hazardous financial condition as defined in W.S. 26-3-116.
(c) An insurer or group of insurers that is directly
subject to section 404, part of a holding company system whose
parent is directly subject to section 404, not directly subject
to section 404 but is a SOX compliant entity or a member of a
holding company system whose parent is not directly subject to
section 404 but is a SOX compliant entity, may file its or its
parent's section 404 report and an addendum in satisfaction of
this section provided that those internal controls of the
insurer or group of insurers having material impact on the
preparation of the insurer's or group of insurers' audited
statutory financial statements 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 financial statements 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 a report under this section or the
section 404 report and a report under this section 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.
(d) A management's report of internal control over
financial reporting shall include:
(i) A statement that management is responsible for
establishing and maintaining adequate internal control over
financial reporting;
(ii) 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;
(iii) A statement that briefly describes the approach
or processes by which management evaluated the effectiveness of
its internal control over financial reporting;
(iv) A statement that briefly describes the scope of
work that is included and whether any internal controls were
excluded;
(v) Disclosure of any unremediated material
weaknesses in the internal control over financial reporting
identified by management as of the immediately preceding
December 31. Management shall 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 (1) or more unremediated material weakness in its
internal controls over financial reporting;
(vi) A statement regarding the inherent limitations
of internal control systems; and
(vii) Signatures of the chief executive officer and
the chief financial officer or the equivalent position.
(e) Management shall document and make available upon
financial condition examination the basis upon which its
assertions required in subsection (d) of this section are made.
Management may base its assertions, in part, upon its review,
monitoring and testing of internal controls undertaken in the
normal course of its activities. Management shall have
discretion as to the nature of the internal control framework
used and the nature and extent of documentation in order to make
its assertions in a cost effective manner and may include
assembly of or reference to existing documentation.
Management's report on internal control over financial reporting
and any documentation provided in support thereof during the
course of a financial conditions examination shall be kept
confidential by the department.
(f) The requirements of this section are effective
beginning with the reporting period ending December 31, 2010 and
each year thereafter. An insurer or group of insurers that is
not required to file a report because the total written premium
is below the threshold and subsequently becomes subject to the
reporting requirements shall have two (2) years following the
year the threshold is exceeded to file a report. An insurer
that becomes subject to any of the reporting requirements as a
result of a business combination shall have two (2) calendar
years following the date of acquisition or combination to comply
with the reporting requirements.
ARTICLE 4
DISCLOSURE OF MATERIAL TRANSACTIONS