COMAR 31.05.11.05. Designation of Independent Certified Public Accountant

A. An insurer required by this chapter to file an annual audited financial report shall, within 60 days after becoming subject to the requirement:

(1) Register with the Commissioner in writing the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit set forth in this regulation; or

(2) Register the name and address of their retained independent certified public accountant not less than 6 months before the date when the first audited financial report is to be filed if the insurer has not retained an independent certified public accountant on the effective date of this chapter.

B. The insurer shall obtain a letter from the accountant, and file a copy with the Commissioner:

(1) Stating that the accountant is aware of the provisions of the insurance code and the regulations of the insurance department of the state of domicile that relate to accounting and financial matters; and

(2) Affirming that the accountant will express an opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or otherwise permitted by that insurance department, specifying such exceptions as the accountant may believe appropriate.

C. If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall:

(1) Within 5 business days notify the Commissioner of this event;

(2) Furnish the Commissioner with a separate letter within 10 business days of the above notification stating whether in the 24 months preceding the event there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused him to make reference to the subject matter of the disagreement in connection with his opinion;

24 months preceding the event there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused him to make reference to the subject matter of the disagreement in connection with his opinion;

(3) In writing, request the former accountant to furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurer's letter and, if not, stating the reasons for which the accountant does not agree; and

(4) Furnish the responsive letter from the former accountant to the Commissioner together with its own letter.

D. Disagreements.

(1) The disagreements required to be reported under §C(2) of this regulation include both those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction.

(2) Disagreements contemplated by §C(2) of this regulation are those that occur at the decision-making level, that is, between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report.

Cross References 31.05.11.18B