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Montana Administrative Register Notice 6-186 No. 3   02/11/2010    
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BEFORE THE STATE AUDITOR AND COMMISSIONER OF INSURANCE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 6.6.3501, 6.6.3502, 6.6.3503, 6.6.3504, 6.6.3505, 6.6.3506, 6.6.3507, 6.6.3508. 6.6.3509, 6.6.3510, 6.6.3511, and 6.6.3512,  the amendment and transfer of ARM 6.6.3513 and 6.6.3514, and the adoption of New Rules I through III (ARM 6.6.3515, 6.6.3516, and 6.6.3517), pertaining to Annual Audited Reports and Establishing Accounting Practices and Procedures to be Used in Annual Statements

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NOTICE OF AMENDMENT, AMENDMENT AND TRANSFER, AND ADOPTION

 

 

 

TO:  All Concerned Persons

 

            1.  On December 24, 2009, the State Auditor and Commissioner of Insurance published MAR Notice No. 6-186 regarding the public hearing on the proposed amendment, amendment and transfer, and adoption of the above-stated rules at page 2394 of the 2009 Montana Administrative Register, issue number 24.

 

2.  On January 21, 2010, at 10:00 a.m., the State Auditor and Commissioner of Insurance held a public hearing to consider the proposed amendment, amendment and transfer, and adoption of the above-stated rules.  There were no public attendees at the hearing.

 

3.  The department has amended ARM 6.6.3501, 6.6.3502, 6.6.3503, 6.6.3504, 6.6.3505, 6.6.3506, 6.6.3507, 6.6.3508, 6.6.3509, 6.6.3510, 6.6.3511, and 6.6.3512, amended and transferred ARM 6.6.3513 (6.6.3520) and 6.6.3514 (6.6.3521), and adopted NEW RULES I (6.6.3515), II (6.6.3516), and III (6.6.3517) exactly as proposed.

 

4.  The department has thoroughly considered the written comments from one commenter.  A summary of the comments received and the agency's responses are as follows:

 

COMMENT:  The American Council of Life Insurers [ACLI] commented that the compliance dates for subsections (2), (3), and (4) in ARM 6.6.3513 (6.6.3520) be revised to December 31, 2010, in light that calendar year 2009 was concluded prior to the adoption of the amended and new rules.

 

RESPONSE:  The commissioner does not accept the suggested changes to certain effective dates in ARM 6.6.3513 (6.6.3520).  Insurers have been required since 1993 to file audited financial reports on June 1 of every year.  The definition of audited financial report has not changed.   

 

With regard to ARM 6.6.3513(2), although the requirements for independence of the certified public accountants preparing the audited financial report will be amended in ARM 6.6.3506 to prohibit potential conflicts of interest and to otherwise ensure the reliability of the audited financial report, insurers may request an exemption from the commissioner for the year ending 2009.

 

With regard to ARM 6.6.3513(3), domestic insurers not retaining certified public accountants who qualify as independent under the amended rules may request an exemption from the commissioner for the year ending 2009.

 

With regard to ARM 6.6.3513(4), foreign insurers may request an exemption from the commissioner for the year ending 2009.

 

Accordingly, if compliance with the amendments and new rules regarding audited financial statements will be a hardship for any insurer, that insurer may request an exemption from the commissioner which will not be unreasonably withheld.

 

 

/s/  Christina L. Goe                                      /s/  Robert W. Moon                         

Christina L. Goe                                            Robert W. Moon

Rule Reviewer                                               Deputy Insurance Commissioner

 

Certified to the Secretary of State February 1, 2010.

 

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