Senate Bill No. 486
(By Senators Minard, Jenkins, Rowe, Sharpe, Ross and Minear)
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[Introduced February 11, 2003; referred to the Committee on
Banking and Insurance.]
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A BILL to amend and reenact section nine, article thirty-three,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to the
requirement that a certified public accountant must notify the
insurer's board of directors or its audit committee if the
insurer has materially misstated the insurer's financial
condition.
Be it enacted by the Legislature of West Virginia:
That section nine, article thirty-three, chapter thirty-three of
the code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 33. ANNUAL AUDITED FINANCIAL REPORT.
§33-33-9. Notification of adverse financial condition.
(a) The independent certified public accountant shall immediately notify, in writing,
an officer or director of the
insurer the insurer's board of directors or its audit committee and
the commissioner of any determination by the independent certified
public accountant that the insurer has materially misstated its
financial condition as reported to the commissioner as of the
thirty-first day of December immediately preceding or of any
determination that the insurer does not meet the applicable minimum
capital and surplus requirement of this chapter or, in the case of
an insurer not subject to capital and surplus requirement, that the
surplus of the insurer is less than one hundred thousand dollars as
of the thirty-first day of December immediately preceding. For
purposes of this article, material misstatement shall have the
meaning prescribed by the professional standards and pronouncements
of the American institute of certified public accountants:
Provided, That the independent certified public accountant shall
report a misstatement that overstates the surplus as regards
policyholders in single financial statement items by five percent
or more or, when taken together with all financial statement items,
the surplus as regards policyholders is overstated by ten percent
or more.
(b) No independent public accountant shall be liable in any
manner to any person for any statement made in connection with
subsection (a) of this section if the statement is made in good
faith in compliance with said subsection.
(c) If the accountant, subsequent to the date of the audited
financial report filed pursuant to this article, becomes aware of
facts which might have affected the report, the commissioner notes
the obligation of the accountant to take action as prescribed in
volume 1, section AU 561 of the professional standards of the
American institute of certified public accountants.
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(NOTE:
The purpose of this bill is to provide an additional
safeguard against a failure to properly disseminate information
concerning the company's financial condition.
Strike-throughs indicate language that would be stricken from
the present law, and underlining indicates new language that would
be added.)
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