ICA.Ch47 Flashcards
Identify 3 duties of the audit committee
- review annual statement before Board of Director approval
- review such company returns as superintendent may specify
- review investments & transactions with material adverse events brought to audit committee
- require management to implement & maintain internal controls
- meet with auditor: discuss Annual Report
- meet with actuary: discuss parts of Annual Report prepared by actuary
- meet with chief internal auditor: discuss effectiveness of internal controls
Identify 3 items BoD must present to shareholders & policyholders @ AGM
• F/S (Financial Statements) for most recent 2 yrs
• auditor’s report
• actuary’s report
• description of roles for auditor & actuary
• anything else required by the by-laws of company
What are the requirements for a CFO to be AA
• audit committee writes to OSFI that duties of CFO & AA can be adequately & independently performed
• OSFI authorizes appointment
• must also list the legal requirements to be an AA and/or OSFI’S expectations for the AA
Can CEO/COO be AA ?
yes if: authorized by OSFI
* (expiration of authorization is specified therein but cannot exceed 6 months)
Identify 3 reasons why an Actuary would cease to hold the AA position.
• appointment revoked by Board of Directors
• resignation
• death
• the person ceases to be an actuary (Ex: FCIA designation revoked due to
disciplinary action)
What must BoD do upon AA vacancy
Notify OSFI & fill vacancy
What must AA do upon revocation/resignment
- write report outlining circumstances & reasons
- send to Board of Directors & OSFI
What must prospective replacement AA do
• request written report on circumstances & reasons for prior AA leaving
• if not received in 15 days, new AA appointment may simply be accepted
identify AA’s right to information & protection from liability
• AA may request records & explanations from
→ Board of Directors
→ officers
→ employees
• AA can’t be held liable for such good faith requests
Describe the AA’s duty to report to the BoD
- provide report on Financial Position (annually)
- provide report on Financial Condition when directed by super
Describe the AA’s duty to report to the CEO
- report on MAE (Material Adverse Events) that require recitification –> (CEO,CFO,cc:BoD)
What is qualified privilege of AA
IF AA makes good faith report under 363 & 369, THEN AA won’t be liable in civil action seeking indemnification.
Recall:
363: pertains to report from outgoing AA
369: pertains to report on MAE (Material Adverse Events)
If no suitable action by company following Material Adverse Events report, what must be done?
• send original report on MAE (Material Adverse Events) to OSFI
• also send a copy to BoD
Describe the requirements for foreign insurance companies to hold adequate assets in Canada under Insurance Companies Act (ICA).
• must have ASSETS > 5m vested in trust (or an amount per superintendent)
• must APPOINT an actuary & auditor
• must ESTABLISH chief agency
• must have min MCT / BAAT ratio
• any other conditions super deems appropriate