31 Pa. Code § 147.8. Scope of audit and report of independent certified public accountant.

§ 147.8. Scope of audit and report of independent certified public accountant.

(a)  The annual financial statements filed by an insurer with the Department shall be audited by an independent certified public accountant. The audit of the financial statements of the insurer shall be conducted in accordance with generally accepted auditing standards.
(b)  The scope of the audit and data testing procedures shall be conducted as required by the appropriate Annual Statement Instructions adopted by the NAIC. Consideration shall also be given to other procedures in the Financial Condition Examiner’s Handbook adopted by the NAIC. The independent certified public accountant shall obtain an understanding of internal control sufficient to plan the audit in accordance with AU Section 319 of the Porfessional Standards of the American Institute of Certified Public Accountants, Consideration of Internal Control in a Financial Statement Audit (AU 319). To the extent required by AU 319 and as part of the independent certified public accountant’s professional requirements defined in Statement on Auditing Standards (SAS) No. 102, Defining Professional Requirements in Statements on Auditing Standards or its replacement, the independent certified public accountant shall consider the most recently available Management’s Report of Internal Control over Financial Reporting, as required under §  147.9b, in planning and performing the audit of an insurer’s statutory financial statements.
(c)  Subsection (b) does not apply to continuing care providers.
(d)  The Commissioner may prescribe that additional auditing procedures be observed by the independent certified public accountant in the audit of the financial statements of insurers under this chapter.

Authority

   The provisions of this §  147.8 amended under the authority of sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P.S. § §  66, 186, 411 and 412); sections 320, 630, 1007 and 2452 of The Insurance Company Law of 1921 (40 P.S. § §  443, 764a, 967 and 991.2452); sections 205 and 206 of The Pennsylvania Fair Plan Act (40 P.S. § §  1600.205 and 1600.206); section 731 of the Medical Care Availability and Reduction of Error (MCARE) Act (40 P.S. §  1303.731); 40 Pa.C.S. § §  6125, 6331 and 6701; sections 11 and 14 of the Health Maintenance Organization Act (40 P.S. § §  1561 and 1564); and sections 7 and 25 of the Continuing-Care Provider Registration and Disclosure Act (40 P.S. § §  3207 and 3225).

Source

   The provisions of this §  147.8 adopted December 21, 1979, effective December 22, 1979, 9 Pa.B. 4164; amended November 10, 1995, effective November 11, 1995, 25 Pa.B. 4785; amended August 20, 2004, effective August 21, 2004, 34 Pa.B. 4591; amended October 2, 2009, effective October 3, 2009, 39 Pa.B. 5730. Immediately preceding text appears at serial pages (305330) to (305331).

Cross References

   This section cited in 31 Pa. Code §  147.12 (relating to examinations).

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