An insurer or a group of insurers that is:

(1) Directly subject to Section 404;

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(2) Part of a holding company system whose parent is directly subject to Section 404;

(3) Not directly subject to Section 404 but is a SOX compliant entity; or

(4) A member of a holding company system whose parent is not directly subject to Section 404 but is a SOX compliant entity;

shall file its or its parent’s Section 404 report and an addendum in satisfaction of § 58-43-16.13 only if those internal controls of the insurer or group of insurers having a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements were included in the scope of the Section 404 report. The addendum shall be a positive statement by management that there are no material processes with respect to the preparation of the insurer’s or group of insurers’ audited statutory financial statements excluded from the Section 404 report.

If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements and those internal controls were not included in the scope of the Section 404 report, the insurer or group of insurers may either file a report in accordance with § 58-43-16.13, or the Section 404 report and a § 58-43-16.13 report for those internal controls that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements not covered by the Section 404 report.

Source: SL 2009, ch 271, § 30.