3 Colo. Code Regs. § 702-3-1-4-4
Current through Register Vol. 47, No. 24, December 25, 2024
Section 3 CCR 702-3-1-4-4 - DefinitionsA. "Accountant" or "independent certified public accountant" means, for the purposes of this regulation, an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants (AICPA) and in all states in which he or she is licensed to practice; for Canadian and British companies, it means a Canadian chartered or British-chartered accountant.B. An "affiliate" of, or person "affiliated" with, a specific person, means, for the purposes of this regulation, 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.C. "Audit committee" means, for the purposes of this regulation, 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 a company or group of insurers; the internal audit function of a company or group of insurers; and the external audits of financial statements of the company 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 these controlled companies solely for the purposes of this regulation at the election of the controlling person. Refer to Section 15.E. for exercising this election. If an Audit committee is not designated by the company, the company's entire board of directors shall constitute the Audit committee.D. "Audited financial report" means, for the purposes of this regulation, and includes those items specified in Section 6 of this regulation.E. "Commissioner" means, for the purposes of this regulation, the Commissioner of Insurance for the State of Colorado.F. "Company" means, for the purposes of this regulation, an insurer, captive insurance company, health maintenance organization or Pinnacol Assurance.G. "Division" means, for the purposes of this regulation, the Colorado Division of Insurance.H. "Indemnification" means, for the purposes of this regulation, 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 company or its representatives.I. "Insurer" means, for the purposes of this regulation, a licensed insurance company, authorized surplus lines insurance company, authorized non-admitted reinsurer, nonprofit hospital, medical-surgical, and health service corporation or fraternal benefit society.J. "Group of insurers" means, for the purposes of this regulation, those licensed insurers included in the reporting requirements of § 10-3-801 et seq., C.R.S., or a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over financial reporting.K. "Internal audit function" means, for the purposes of this regulation, a person or persons that provide independent, objective and reasonable assurance 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.L. "Internal control over financial reporting" means, for the purposes of this regulation, 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 Section 6.B. through 6.G. of this regulation and includes those policies and procedures that: 1. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements, i.e., those items specified in Section 6.B. through 6G of this regulation and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and3. 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 Section 6.B. through 6G of this regulation.M. "SEC" means, for the purposes of this regulation, the United States Securities and Exchange Commission. N. "Section 404" means, for the purposes of this regulation, Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC's rules and regulations promulgated thereunder.O. "Section 404 Report" means, for the purposes of this regulation, 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 Section 4.A.P. "SOX Compliant Entity" means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes- Oxley Act of 2002: (i) the preapproval requirements of Section 201 (Section 10A(i) of the Securities Exchange Act of 1934); (ii) the Audit committee independence requirements of Section 301 (Section 10A(m)(3) of the Securities Exchange Act of 1934); and (iii) the internal control over financial reporting requirements of Section 404 (Item 308 of SEC Regulation S-K).37 CR 20, October 25,2014, effective 11/15/201437 CR 20, October 25,2014, effective 1/1/201537 CR 23, December 10, 2014, effective 1/1/201538 CR 17, September 10, 2015, effective 10/1/201539 CR 05, March 10, 2016, effective 4/1/201639 CR 14, July 25, 2016, effective 8/15/201639 CR 23, December 10, 2016, effective 1/1/201740 CR 03, February 10, 2017, effective 3/15/201740 CR 05, March 10, 2017, effective 4/1/201740 CR 13, July 10, 2017, effective 8/1/201740 CR 17, September 10, 2017, effective 11/1/201743 CR 06, March 25, 2020, effective 4/15/202044 CR 03, February 10, 2021, effective 3/15/202144 CR 23, December 10, 2021, effective 1/1/202246 CR 03, February 10, 2023, effective 3/2/2023