Bill No.: SF0002                  Drafter:  LGC

LSO No.:  09LSO-0039              Effective Date:  1/1/2010

Enrolled Act No.:  SEA0038

Chapter No.:       94

Prime Sponsor:     Joint Corporations, Elections and Political Subdivisions Interim Committee

Catch Title:       Insurance-financial reporting requirements.

Subject:       Revises insurance statutes with respect to financial reporting requirements and audit provisions.

Summary/Major Elements:

• The model audit law has been in Wyoming statutes since 1994.  This act amends portions of current law and adds three new sections to the model audit law.  These changes are required for the department of insurance to maintain accreditation with the national association of insurance commissioners (NAIC).

• The act requires auditor independence.  The act provides that a certified public accountant may only audit an insurance company's books for five years but then must not audit those books for a period of five years.  The act provides that certain non-audit functions such as participating in management functions may affect the certified public accountant's independent status.  The act provides that a certified public may not serve as an officer or director of an insurer if he does the independent audit of that insurer during the prior year.

• The act requires that each insurer’s board of directors have an audit committee to oversee the independent certified public accountant and the audit.  The act requires a certain percentage of the members of the audit committee be independent of the insurer.

• The act requires internal control over financial reporting.   The act requires larger insurers ($500,000,000 in premiums per year) to file a report with the insurance department regarding its assessment of its internal control over financial reporting.