{"data":{"id":"us-ok/okla.-stat.-tit.-36-36-311a.14","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 36, § 36-311A.14","heading":"Audit committee - Membership - Duties","body":"A. This section shall not apply to foreign or alien insurers\n\nlicensed in this state or an insurer that is a SOX Compliant Entity\n\nor a direct or indirect wholly-owned subsidiary of a SOX Compliant\n\nEntity.\n\nB. The audit committee shall be directly responsible for the\n\nappointment, compensation, and oversight of the work of any\n\naccountant, including resolution of disagreements between management\n\nand the accountant regarding financial reporting, for the purpose of\n\npreparing or issuing the audited financial report or related work\n\npursuant to the Oklahoma Annual Financial Report Act. Each\n\naccountant shall report directly to the audit committee.\n\nC. The audit committee of an insurer or group of insurers shall\n\nbe responsible for overseeing the insurer's internal audit function\n\nand granting the person or persons performing the function suitable\n\nauthority and resources to fulfill their responsibilities if\n\nrequired by Section 311A.14 of this title.\n\nD. Each member of the audit committee shall be a member of the\n\nboard of directors of the insurer or a member of the board of\n\ndirectors of an entity elected pursuant to subsection G of this\n\nsection and paragraph 3 of Section 311A.3 of this title.\n\nE. In order to be considered independent for purposes of this\n\nsection, a member of the audit committee may not, other than in the\n\ncapacity as a member of the audit committee, the board of directors,\n\nor any other board committee, accept any consulting, advisory, or\n\nother compensatory fee from the entity or be an affiliated person of\n\nthe entity or subsidiary thereof. However, if law requires board\n\nparticipation by otherwise non-independent members, that law shall\n\nprevail and such members may participate in the audit committee and\n\nbe designated as independent for audit committee purposes, unless\n\nthey are an officer or employee of the insurer or one of its\n\naffiliates.\n\nF. If a member of the audit committee ceases to be independent\n\nfor reasons outside the reasonable control of the member, that\n\nperson, with notice by the responsible entity to the state, may\n\nremain an audit committee member of the responsible entity until the\n\nearlier of the next annual meeting of the responsible entity or one\n\n(1) year from the occurrence of the event that caused the member to\n\nbe no longer independent.\n\nG. To exercise the election of the controlling person to\n\ndesignate the audit committee for purposes of the Oklahoma Annual\n\nFinance Report Act, the ultimate controlling person shall provide\n\nwritten notice to the Insurance Commissioner of the affected\n\ninsurers. Notification shall be made timely prior to the issuance\n\nof the statutory audit report and include a description of the basis\n\nfor the election. The election can be changed through notice to the\n\nCommissioner by the insurer, which shall include a description of\n\nthe basis for the change. The election shall remain in effect for\n\nperpetuity, until rescinded.\n\nH. 1. The audit committee shall require the accountant that\n\nperforms for an insurer any audit required by the Oklahoma Annual\n\nFinancial Report Act to timely report to the audit committee in\n\naccordance with the requirements of SAS 61, Communication with Audit\n\nCommittees, or its replacement, including:\n\na. all significant accounting policies and material\n\npermitted practices,\n\nb. all material alternative treatments of financial\n\ninformation within statutory accounting principles\n\nthat have been discussed with management officials of\n\nthe insurer, ramifications of the use of the\n\nalternative disclosures and treatments, and the\n\ntreatment preferred by the accountant, and\n\nc. other material written communications between the\n\naccountant and the management of the insurer, such as\n\nany management or schedule of unadjusted differences.\n\n2. If an insurer is a member of an insurance holding company\ncussed with management officials of\n\nthe insurer, ramifications of the use of the\n\nalternative disclosures and treatments, and the\n\ntreatment preferred by the accountant, and\n\nc. other material written communications between the\n\naccountant and the management of the insurer, such as\n\nany management or schedule of unadjusted differences.\n\n2. If an insurer is a member of an insurance holding company\n\nsystem, the reports required by paragraph 1 of this subsection may\n\nbe provided to the audit committee on an aggregate basis for\n\ninsurers in the holding company system, provided that any\n\nsubstantial differences among insurers in the system are identified\n\nto the audit committee.\n\nI. The proportion of independent audit committee members shall\n\nmeet or exceed the following criteria set out in paragraphs 1, 2 and\n\n3 of this subsection:\n\n1. No Minimum Requirements. There are no minimum requirements\n\nfor insurers with prior calendar year direct written and assumed\n\npremiums of Three Hundred Million Dollars ($300,000,000.00) or less;\n\n2. Majority of Members. Fifty percent (50%) or more of members\n\nof the independent audit committee for insurers with prior calendar\n\nyear direct written and assumed premiums of between Three Hundred\n\nMillion Dollars ($300,000,000.00) and Five Hundred Million Dollars\n\n($500,000,000.00); or\n\n3. Supermajority of Members. Seventy-five percent (75%) or\n\nmore of members of the independent audit committee for insurers with\n\nprior calendar year direct written and assumed premiums of over Five\n\nHundred Million Dollars ($500,000,000.00).\n\nJ. The Commissioner may require improvements to the\n\nindependence of the audit committee membership of any insurer if the\n\ninsurer is in a RBC action level event, meets one or more of the\n\nstandards of an insurer deemed to be in hazardous financial\n\ncondition, or otherwise exhibits qualities of a troubled insurer.\n\nK. For purposes of this section, prior calendar year direct\n\nwritten and assumed premiums shall be the combined total of direct\n\npremiums and assumed premiums from non-affiliates for the reporting\n\nentities.\n\nL. An insurer with direct written and assumed premium,\n\nexcluding premiums reinsured with the Federal Crop Insurance\n\nCorporation and Federal Flood Program, of less than Five Hundred\n\nMillion Dollars ($500,000,000.00) may make application to the\n\nCommissioner for a waiver from the requirements of this section\n\nbased upon hardship. The insurer shall file, with its annual\n\nstatement filing, the approval for relief from this section with the\n\nstates that it is licensed in or doing business in and the National\n\nAssociation of Insurance Commissioners (NAIC). If the nondomestic\n\nstate accepts electronic filing with the NAIC, the insurer shall\n\nfile the approval in an electronic format acceptable to the NAIC.","path":["OK Code","Title 36"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os36.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"f279fc10c1f763007dbefddb37ce335ccd9aa08519f20a85b311ed88b48c3f6b","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-36-36-311a.13","next":"us-ok/okla.-stat.-tit.-36-36-311a.14.1"},"notice":"GroundRules: Original legal text. Not legal advice."}