26-44-101 through 26-44-117 or a set of insurers as identified

26-44-101 through 26-44-117 or a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over financial reporting;

(x) "SEC" means the United States Securities and Exchange Commission;

(xi) "Section 404" means section 404 of the Sarbanes- Oxley Act of 2002 or subsequently enacted similar federal law and the SEC's rules and regulations promulgated thereunder;

(xii) "Section 404 report" means 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;

(xiii) "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 or similar provisions of subsequently enacted similar federal law:

(A) The preapproval requirements of Section 201;

(B) The audit committee independence requirements of Section 301; and

(C) The internal control over financial reporting requirements of Section 404.

(xiv) "Internal audit function" means a person who provides independent oversight designed to improve an organization's operations and who accomplishes this oversight by using an objective approach to evaluate and improve risk management, control and corporate governance.

26-3-303. General requirements related to filing and extensions for filing of annual audited financial reports; audit committee appointment.

(a) All insurers shall have an annual audit by an independent certified public accountant and shall file an audited financial report with the commissioner on or before June 1 for the immediately preceding calendar year. The commissioner may require an insurer to file an audited financial report earlier than June 1 with ninety (90) days advance notice to the insurer.

(b) Extensions of the June 1 filing date may be granted by the commissioner for thirty (30) day periods upon a showing by the insurer and its independent certified public accountant of the reasons for requesting the extension and a determination by the commissioner there is good cause for an extension. The request for extension shall be submitted in writing not less than ten (10) days prior to the due date in sufficient detail to permit the commissioner to make an informed decision with respect to the requested extension.

(c) If an extension is granted in accordance with subsection (b) of this section, a similar extension of thirty (30) days is granted to the filing of the management's report of internal control over financial reporting.

(d) Every insurer required to file an annual audited financial report pursuant to this section shall designate a group of individuals as constituting its audit committee. The audit committee of an entity that controls an insurer may be deemed to be the insurer's audit committee for purposes of this article at the election of the controlling person.

26-3-304. Contents of annual audited financial report.

(a) The annual audited financial report shall report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows and changes in capital and surplus for that year in conformity with statutory accounting practices prescribed or permitted by the department of insurance of the state of domicile.

(b) The annual audited financial report shall include the following:

(i) Report of an independent certified public accountant;

(ii) Balance sheet reporting admitted assets, liabilities, capital and surplus;

(iii) Statement of operations;

(iv) Statement of cash flows;  (v) Statement of changes in capital and surplus;

(vi) Notes to financial statements. The notes shall be those required by the appropriate National Association of Insurance Commissioners' annual statement instructions and the most recent National Association of Insurance Commissioners' accounting practices and procedures manual. The notes shall include:

(A) A reconciliation of differences, if any, between the audited statutory financial statements and the annual statement filed pursuant to W.S. 26-3-123 with a written description of the nature of these differences;

(B) Repealed By Laws 2001, Ch. 9, § 2.

(vii) The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the commissioner. The financial statement shall be comparative, presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31.

26-3-305. Designation of independent certified public accountant.

(a) Each insurer required by this article to file an annual audited financial report shall within sixty (60) days after becoming subject to the requirement, 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. Insurers not retaining an independent certified public accountant on or before April 1, 1994 shall register the name and address of their retained independent certified public accountant not less than six (6) months before the date when the first audited financial report is to be filed.

(b) The insurer shall obtain a letter from the accountant, and file a copy with the commissioner stating that the accountant is aware of the provisions of the insurance code and the rules and regulations of the insurance department of the state of domicile that relate to accounting and financial matters and affirming that he will express his opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or otherwise permitted by that department, specifying the exceptions he believes appropriate.

(c) If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall within five (5) business days notify the department of this event. The insurer shall also furnish the commissioner with a separate letter within ten (10) business days of the above notification stating whether in the twenty-four (24) months preceding the dismissal or resignation 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, 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. The disagreements required to be reported under this subsection include both those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction. Disagreements required to be reported under this subsection are those which occur at the decision-making level, between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. The insurer shall also in writing request and the former accountant shall furnish a letter addressed to the department with a copy 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 he does not agree.

26-3-306. Qualifications of independent certified public accountant.

(a) The commissioner shall not recognize any person or firm as a qualified independent certified public accountant if that person or firm:

(i) Is not in good standing with the American Institute of Certified Public Accountants and in all states in which the accountant is licensed to practice, or, for a Canadian or British company, that is not a chartered accountant; or

(ii) Has either directly or indirectly entered into an agreement of indemnification with respect to the audit of the insurer.  (b) Except as otherwise provided in this section, the commissioner shall recognize an independent certified public accountant as qualified as long as he conforms to the standards of his profession, as contained in the code of professional ethics of the American Institute of Certified Public Accountants and rules and regulations and code of ethics and rules of professional conduct of the Wyoming board of certified public accountants, or similar code.

(c) After January 1, 2010, the lead or coordinating audit partner having primary responsibility for the audit shall not act in that capacity for more than five (5) consecutive years. The person shall be disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of five (5) consecutive years. An insurer may make application to the commissioner for relief from the rotation requirement on the basis of unusual circumstances. This application shall be made at least thirty (30) days before the end of the calendar year. The insurer shall file with its annual statement, the approval for relief pursuant to this subsection with the states in which it is licensed or doing business and with the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC. The commissioner may consider the following factors in determining whether the relief should be granted:

(i) Number of partners, expertise of the partners or the number of insurance clients in the currently registered firm;

(ii) Premium volume of the insurer; or

(iii) Number of jurisdictions in which the insurer transacts business.

(d) The commissioner shall neither recognize as a qualified independent certified public accountant, nor accept any annual audited financial report, prepared in whole or in part by, any natural person who:

(i) Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1961 through 1968, or any dishonest conduct or practices under federal or state law;  (ii) Has been found to have violated the insurance laws of this state with respect to any previous reports submitted under this article; or

(iii) Has demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under the provisions of this article.

(e) The commissioner may hold a hearing to determine whether an independent certified public accountant is qualified and, considering the evidence presented, may rule that the accountant is not qualified for purposes of expressing his opinion on the financial statements in the annual audited financial report made pursuant to this article and require the insurer to replace the accountant with another whose relationship with the insurer is qualified within the meaning of this article.

(f) A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. However, in the event of a delinquency proceeding commenced against the insurer under chapter 28 of this code, the mediation or arbitration provisions shall operate at the option of the statutory successor.

(g) The commissioner shall neither recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by an accountant who provides to an insurer, contemporaneously with the audit, the following nonaudit services:

(i) Bookkeeping or other services related to the accounting records or financial statements of the insurer;

(ii) Financial information systems design and implementation;

(iii) Appraisal or valuation services, fairness opinion or contribution-in-kind reports;

(iv) Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer's financial statements. An accountant's actuary may also issue an actuarial opinion or certification on an insurer's reserves if the following conditions have been met:

(A) Neither the accountant nor the accountant's actuary has performed any management functions or made any management decisions;

(B) The insurer has competent personnel or engages a third party actuary to estimate the reserves for which management takes responsibility; and

(C) The accountant's actuary tests the reasonableness of the reserves after insurer's management has determined the amount of the reserves.

(v) Internal audit outsourcing services;

(vi) Management functions or human resources;

(vii) Broker or dealer, investment adviser or investment banking services;

(viii) Legal services or expert services unrelated to the audit; or

(ix) Any other services that the commissioner determines by regulation to be impermissible. In determining whether other services are impermissible, the commissioner shall consider the principle that the accountant may not function in the role of management, may not audit his own work and may not serve in an advocacy role for the insurer.

(h) Insurers having direct written and assumed premiums of less than one hundred million dollars ($100,000,000.00) in any calendar year may request an exemption from subsection (g) of this section. The insurer shall file with the commissioner a written statement discussing the reasons why the insurer should be exempt from subsection (g) of this section. If the commissioner finds, upon review of the statement, that compliance with subsection (g) of this section would constitute a financial or organizational hardship on the insurer, an exemption may be granted.

(j) A qualified independent certified public accountant who performs the audit may engage in other nonaudit services, including tax services, that are not described in subsection (g) of this section or that do not conflict with paragraph (g)(ix) of this section only if the activity is approved in advance by the audit committee in accordance with subsection (k) of this section.

(k) All auditing services and nonaudit services provided to an insurer by the qualified independent certified public accountant of the insurer shall be preapproved by the audit committee. The preapproval requirement shall be waived with respect to nonaudit services if the insurer is a SOX compliant entity or a direct or indirect wholly-owned subsidiary of a SOX compliant entity or if:

(i) The aggregate amount of all nonaudit services provided to the insurer constitutes not more than five percent (5%) of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the nonaudit services are provided;

(ii) The services were not recognized by the insurer at the time of the engagement to be nonaudit services; and

(iii) The services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one (1) or more members of the audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee.

(m) The audit committee may delegate to one (1) or more designated members of the audit committee the authority to grant the preapprovals required under subsection (k) of this section. The decisions of any member to whom this authority is delegated shall be presented to the full audit committee at each of its scheduled meetings.

(n) The commissioner shall not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer or any person serving in an equivalent position for that insurer was employed by the independent certified public accountant and participated in the audit of that insurer during the one (1) year period preceding the date that the most current statutory opinion is due. This subsection shall only apply to partners and senior managers involved in the audit. An insurer may make application to the commissioner for relief from this subsection on the basis of unusual circumstances. The insurer shall file with its annual statement filing the approval for relief under this subsection with the states that it is licensed in or doing business in and with the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.

26-3-307. Consolidated or combined audits.

(a) An insurer may make written application to the commissioner for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies which utilizes a pooling or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer cedes all of its direct and assumed business to the pool. In those cases, a columnar consolidating or combining supplemental schedules shall be filed with the report, as follows:

(i) Amounts shown on the consolidated or combined audited financial report shall be shown on the supplemental schedules;

(ii) Amounts for each insurer subject to this section shall be stated separately;

(iii) Noninsurance operations may be shown on the supplemental schedules on a combined or individual basis;

(iv) Explanations of consolidating and eliminating entries shall be included;

(v) A reconciliation shall be included of any differences between the amounts shown in the individual insurer columns of the supplemental schedules and comparable amounts shown on the annual statements of the insurers.

26-3-308. Scope of audit and report of independent certified public accountant.

Financial statements furnished pursuant to W.S. 26-3-304 shall be examined by the independent certified public accountant. The audit of the insurer's financial statements shall be conducted in accordance with generally accepted auditing standards. In accordance with Accumulation of Audit Standards (AU) Section 319 of the professional standards of the American Institute of Certified Public Accountants, Consideration of Internal Control in a Financial Statement Audit, the independent certified public accountant shall obtain an understanding of internal control sufficient to plan the audit. To the extent required by AU 319, for those insurers required to file a management's report of internal control over financial reporting pursuant to W.S.