Prior to March 1 of each year or 60 days after its fiscal year end,  a captive insurance company is required to file with the Insurance Commissioner a report of its financial condition, verified by oath of two (2) of its executive officers. A producer reinsurance captive insurance company or a pure captive insurance company may apply to file the required report on a fiscal year-end that is consistent with the parent company's fiscal year.

Annual Financial reporting requirements:

Captive Type

Quarterly Stmt Filings

Annual Stmt Filings

Verified by oath of two of its executive officers

Required By

 

CPA Audit Due 6/30 for Year Ending 12/31

Association

Yes

Yes

Yes

A.C.A. 23-63-216(a)

Yes

Industrial Insured Group

Yes

Yes

Yes

A.C.A. 23-63-216(a)

Yes

Industrial Insured

No

Yes

Yes

Rule 73, Sec. 3(B)

Yes

Pure

No

Yes

Yes

Rule 73, Sec. 3(B)

Yes

Sponsored

No

Yes

Yes

Rule 73, Sec. 3(B)

Yes

Producer Reinsurance

No

Yes

Yes

Rule 73, Sec. 3(B)

Yes

Audited Financial Statements per Rule 73§4:  All companies are required to have an annual audit by an independent certified public accountant, authorized by the Commissioner, and are required to file the report on or before June 30 for the year ending December 31 immediately preceding. The annual audit shall be on the same accounting basis as the annual statement.

Annual audit should contain the following: opinion of independent certified public accountant; financial statements; report of evaluation of internal controls; and an accountant's Letter.  The financial statements should contain: a balance sheet; statement of gain or loss from operations; statement of changes in financial position; statement of cash flow; statement of changes in capital paid up, gross paid in and contributed surplus and unassigned funds (surplus), and notes to financial statements.   The notes to financial statements should include: a reconciliation of differences; summary of ownership and relationship of the company and all affiliated corporations or companies insured by the captive; and a narrative explanation of all material transactions with the company. No transaction shall be deemed material unless it involves three percent (3%) or more of a company's admitted assets as of the December 31 next preceding.

Actuarial Certification:  Annual audit should include an opinion as to the adequacy of the company's loss reserves and loss expense reserves. The Commissioner must approve the individual who certifies as to the adequacy of reserves. Certification shall be in such form as the Commissioner deems appropriate.