N.M. Admin. Code § 13.2.5.17

Current through Register Vol. 35, No. 24, December 23, 2024

Section 13.2.5.17 - INTERNAL AUDIT FUNCTION REQUIREMENTS

A.Function. An insurer or group of insurer's shall establish an internal audit function providing independent, objective and reasonable assurance to the audit committee and insurer management regarding the insurer's governance, risk management and internal controls. This assurance shall be provided by performing general and specific audits, reviews and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regualtions.

B.Independence. In order to ensure that internal auditors remain objective, the internal audit function must be organizationally independent. Specifically, the internal audit function shall have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships.

C.Reporting. The head of the internal audit function shall report to the audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the intenal audit function's independence or effectiveness, material findings from completed audits and the appropriateness of corrective actions implemented by management as a result of audit findings.

D.Additional Requirements. If an insurer is a member of an insurance holding company system or included in a group of insurer's, the insurer may satisfy the internal audit function requirements set forth in this section at the ultimate controlling parent level, an intermediate holding company level or the individual legal entity level.

E.Exemption. An insurer may be exempt from the requirements of this section only if

(1) the insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the federal corp insurance coporation and federal flood program, less than $500,000,000); or,

(2) if the insurer is a member of a group of insurer's that has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premiums reinsured with federal crop insurance corporation and federal flood program, less than $1,000,000,000.

N.M. Admin. Code § 13.2.5.17

1/1/94; 13.2.5.17 NMAC - Rn, 13 NMAC 2.5.16 & A, 1/1/2010, Amended by New Mexico Register, Volume XXXI, Issue 18, September 29, 2020, eff. 10/1/2020