For the purposes of this chapter, the term:
(1) “Accountant” or “independent certified public accountant” means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in all states in which they are licensed to practice; for Canadian and British companies, it means a Canadian-chartered or British-chartered accountant.
(1A) “Affiliate” or “affiliated person” means an individual or entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the individual or entity.
(1B) “Audit committee” means a committee established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers and the audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of the controlled insurers for the purposes of this chapter at the election of the controlling person pursuant to § 31-311.01(e). If an audit committee is not designated by the insurer, the insurer’s entire board of directors shall constitute the audit committee.
(2) “Audited financial report” means and includes those items specified in § 31-303.
(2A) “Indemnification” means an agreement of indemnity or a release from liability if the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing of other misrepresentations made by the insurer or its representatives.
(3) “Insurer” means a licensed insurer or authorized company which has authority from the Mayor [now Commissioner] to do business in the District of Columbia as provided under §§ 31-2502.02 and 31-4304.
(3A) “Group of insurers” means those licensed insurers included in the reporting requirements of subchapter I of Chapter 7 of this title [§ 31-701 et seq.], or a set of insurers as identified by management for the purpose of assessing the effectiveness of internal control over financial reporting.
(3B) “Internal control over financial reporting” means a process effected by an entity’s board of directors, management, and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements, including compliance with § 31-303(2) through (7), and includes such other policies and procedures that:
(A) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the acquisition and disposition of assets;
(B) Provide reasonable assurance that:
(i) Transactions are recorded as necessary to permit preparation of the financial statements; or
(ii) Receipts and expenditures are made only in accordance with management and director authorization; and
(C) Provide reasonable assurance regarding:
(i) Prevention or timely detection of unauthorized acquisitions; or
(ii) The use or disposition of assets that could have a material effect on the financial statements.
(4) “NAIC” means the National Association of Insurance Commissioners.
(5) “SEC” means the United States Securities and Exchange Commission.
(6) “Section 404” means § 404 of the Sarbanes-Oxley Act of 2002, approved July 30, 2002 (116 Stat. 745; 15 U.S.C. § 7201 et seq.), and the rules and regulations promulgated thereunder.
(7) “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.
(8) “SOX Compliant Entity” means an entity that is required to be compliant with or is voluntarily compliant with:
(A) Section 10A(h) of the Securities Exchange Act of 1934, approved June 6, 1934 (105 Stat. 762; 15 U.S.C. § 78j-l(h)) (preapproval requirements);
(B) Section 10A(m)(3) of the Securities Exchange Act of 1934, approved December 22, 1995 (109 Stat. 762; 15 U.S.C. § 78j-l(m)(3)) (audit committee independence requirements); and
(C) The internal control over financial reporting requirements of Section 404 and 17 C.F.R. § 229.308 (Item 308 of SEC Regulation S-K).
1981 Ed., § 35-3201.
Effect of Amendments
D.C. Law 18-317 added pars. (1A), (1B), (2A), (3A), (3B), and (5) to (8).
For temporary (90 day) amendment of section, see § 2(a) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80).
For temporary (90 day) amendment of section, see § 2(a) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591).
Mayor authorized to issue rules: Section 16 of D.C. Law 10-48 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1 [subchapter I of Chapter 5 of Title 2, 2001 Ed.], issue rules to implement the provisions of this chapter.
Delegation of Authority
Delegation of authority pursuant to D.C. Law 10-48, the Annual Audited Financial Reports Act of 1993, see Mayor’s Order 94-54, March 7, 1994 ( 41 DCR 1433).