A. “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 (AICPA) and in all states in which he or she is licensed to practice. With regard to Canadian and British companies, it means a Canadian-chartered or British-chartered accountant.

B. An “affiliate” of, or person “affiliated” with a specific person, is a person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the person specified.

C. “Audit Committee” means a committee (or equivalent body) 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 audits of financial statements of the insurer or group of insurers. The Audit Committee of any entity that controls an insurer or a group of insurers may be deemed to be the Audit Committee for one or more of these controlled insurers solely for the purposes of this Rule at the election of the controlling person. Refer to Section 14(E) for exercising this election. If an Audit Committee is not designated by the insurer, the insurer's entire board of directors shall constitute the Audit Committee.

D. “Audited Financial Report” means and includes those items specified in Section 5 of this Rule.

E. “Commissioner” means the Arkansas Insurance Commissioner.

F. “Group of insurers” means those insurers subject to the reporting requirements of the Insurance Holding Company Regulatory Act, Ark. Code Ann. §§ 23-63-501, et seq., or a set of insurers as identified by management for the purpose of assessing the effectiveness of Internal Control Over Financial Reporting.

G. “Indemnification” means an agreement of indemnity or a release from liability where 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 knowledge of misrepresentations made by the insurer or its representatives.

H. “Independent board member” has the same meaning as described in Section 14(C).

I. “Insurer” means an insurer as defined in Ark. Code Ann. § 23-60-102(2) or an authorized insurer as defined in Ark. Code Ann. § 23-60-102(11). For purposes of this Rule, an insurer shall also mean hospital and medical service corporations, as defined in Ark. Code Ann. § 23-75-101, and health maintenance organizations, as defined in Ark. Code Ann. § 23-76-102(7).

J. “Internal Control Over Financial Reporting” means a process effectuated by an entity's board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements, i.e., those items specified in Sections 5(B) through 5(G) of this Rule and includes those policies and procedures that:

K. “SEC” means the United States Securities and Exchange Commission.

L. “SOX Compliant Entity” means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002: (i) the preapproval requirements of Section 201 (Section 10(A)(i) of the Securities Exchange Act of 1934); (ii) the Audit Committee independence requirements of Section 301 (Section 10(A)(m)(3) of the Securities Exchange Act of 1934); and (iii) the Internal Control Over Financial Reporting requirements of SOX Section 404 (Item 308 of SEC Regulation S-K).

M. “SOX Section 404” means Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC's regulations promulgated thereunder.

N. “SOX 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 as defined in Section 3(A).

O. “Workpapers” are the records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the accountant's audit of the financial statements of an insurer. Workpapers may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules, or commentaries prepared or obtained by the independent certified public accountant in the course of his or her audit of the financial statements of an insurer and which support the accountant's opinion.