Indiana Code 27-1-3.5-12.3. Internal audit function
(1) The domestic insurer has annual direct written and unaffiliated assumed premiums (including international direct and assumed premiums and excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program) of less than five hundred million dollars ($500,000,000).
Terms Used In Indiana Code 27-1-3.5-12.3
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- audit committee: means a body established by the board of directors of a domestic insurer or group of insurers for the purpose of overseeing:
Indiana Code 27-1-3.5-0.5
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- corporation: means an insurance company and includes all persons, partnerships, corporations, associations, orders or societies engaged in or proposing to engage in making any kind of insurance authorized by the laws of this state. See Indiana Code 27-1-2-3
- Department: means "the department of insurance" of this state. See Indiana Code 27-1-2-3
- domestic insurer: means an insurer organized under the laws of Indiana. See Indiana Code 27-1-3.5-2
- group of insurers: means two (2) or more insurers that are part of an insurance holding company system. See Indiana Code 27-1-3.5-2.6
- Insurance: means a contract of insurance or an agreement by which one (1) party, for a consideration, promises to pay money or its equivalent or to do an act valuable to the insured upon the destruction, loss or injury of something in which the other party has a pecuniary interest, or in consideration of a price paid, adequate to the risk, becomes security to the other against loss by certain specified risks; to grant indemnity or security against loss for a consideration. See Indiana Code 27-1-2-3
- insurance holding company system: has the meaning set forth in IC 27-1-23-1. See Indiana Code 27-1-3.5-3.1
- insurer: means a company, firm, partnership, association, order, society or system making any kind or kinds of insurance and shall include associations operating as Lloyds, reciprocal or inter-insurers, or individual underwriters. See Indiana Code 27-1-2-3
- internal audit function: means a process that provides independent, objective, and reasonable assurance that is designed to:
Indiana Code 27-1-3.5-3.2
- Judgment: means all final orders, decrees, and determinations in an action and all orders upon which executions may issue. See Indiana Code 1-1-4-5
- member: means one who holds a contract of insurance or is insured in an insurance company other than a stock corporation. See Indiana Code 27-1-2-3
- person: includes individuals, corporations, associations, and partnerships; personal pronoun includes all genders; the singular includes the plural and the plural includes the singular. See Indiana Code 27-1-2-3
- Year: means a calendar year, unless otherwise expressed. See Indiana Code 1-1-4-5
A domestic insurer or group of insurers described in this subsection shall comply with the requirements of this section not later than one (1) year after the year in which the domestic insurer’s or group’s annual direct written and unaffiliated assumed premiums described in subdivisions (1) and (2) exceed the applicable maximum amount specified in subdivision (1) or (2).
(b) A domestic insurer shall establish an internal audit function to:
(1) provide independent, objective, and reasonable assurance to the domestic insurer’s audit committee and management concerning the domestic insurer’s governance, risk management, and internal controls;
(2) perform general and specific audits, reviews, and tests; and
(3) use other techniques considered necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations.
(c) An internal audit function established under subsection (b) must be organizationally independent, as follows:
(1) Ultimate judgment concerning audit matters must be made by the department responsible for the internal audit function.
(2) The department responsible for the internal audit function shall appoint an individual:
(A) to be responsible for the internal audit function; and
(B) to have direct and unrestricted access to the board of directors of the domestic insurer.
The internal audit function’s organizational independence does not preclude dual reporting relationships.
(d) The director of the internal audit function shall report to the audit committee of a domestic insurer on a regular basis, at least annually, concerning the following:
(1) The internal audit function’s periodic audit plan.
(2) Factors that may adversely affect the internal audit function’s independence or effectiveness.
(3) Material findings from completed audits.
(4) The appropriateness of corrective actions implemented by management as a result of audit findings.
(e) If a domestic insurer is a member of an insurance holding company system or a member of a group of insurers, the domestic insurer may satisfy the internal audit function requirements of this section at the ultimate controlling person level, an intermediate holding company level, or an individual legal entity level.
As added by P.L.146-2015, SEC.17. Amended by P.L.72-2016, SEC.7.