Chapter Ins 57

Ins 57.32(1)(c) (c) Has not conformed to the standards of the accounting profession as contained in the code of professional ethics of the American institute of certified public accountants and rules and regulations and code of ethics and rules of professional conduct of the accounting examining board, or a similar code;

Ins 57.32(1)(d) (d) Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 USC 1961 to 1968, as revised, or any dishonest conduct or practices under federal or state law;

Ins 57.32(1)(e) (e) Has been found to have violated the insurance laws or rules of this state; or

Ins 57.32(1)(f) (f) Has demonstrated a pattern or practice of failing to detect or disclose material information in financial reports.

Ins 57.32(2) (2) The commissioner may not recognize an independent certified public accountant as qualified for a particular care management organization if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for the care management organization was employed by the independent certified public accountant and participated in the audit of the care management organization during the one-year period preceding the date that the most current statutory opinion is due. This subsection shall only apply to partners and senior managers involved in the audit. A care management organization may make application to the commissioner for relief from the requirement of this paragraph on the basis of unusual circumstances.

Ins 57.32 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10.

Ins 57.33 Ins 57.33 Scope of audit and report of independent certified public accountant. Financial statements furnished under s. Ins 57.30 shall be audited by the independent certified public accountant. The independent certified public accountant shall conduct the audit of the care management organization’s financial statements in accordance with generally accepted auditing standards.

Ins 57.33 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10.

Ins 57.35 Ins 57.35 Notification of adverse financial condition.

Ins 57.35(1) (1) A care management organization shall require the independent certified public accountant to report, in writing and within 5 business days, to the board of directors of the care management organization or its audit committee any determination by the independent certified public accountant that the care management organization has materially misstated its financial condition as reported to the commissioner as of the balance sheet date currently under audit or that the care management organization does not meet the working capital or risk reserve requirements.

Ins 57.35(2) (2) A care management organization who receives a report required under sub. (1) shall forward a copy of the report to the commissioner within 5 business days of receipt of the report and shall provide the independent certified public accountant making the report with evidence that the report has been furnished to the commissioner.

Ins 57.35(3) (3) An independent certified public accountant shall furnish to the commissioner a copy of its report required under sub. (1) within 10 business days after it is furnished to the care management organization under sub. (1) unless the independent certified public accountant receives evidence the care management organization has provided it within the 10 business day period to the commissioner as required under sub. (2).

Ins 57.35(4) (4) An executive officer or director of a care management organization which receives notice under sub. (1) shall report the notification in writing to the commissioner within 5 business days of the date the executive officer or director first acquires knowledge of the notification unless prior to that date the care management organization complies with sub. (2).

Ins 57.35(5) (5) If the independent certified public accountant, subsequent to the date of the audited financial report filed pursuant to this chapter, becomes aware of facts that might have affected the report, the independent certified public accountant shall take the action as prescribed in Volume 1, Section AU 561 of the Professional Standards of the AICPA.

Ins 57.35 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10.

Ins 57.37 Ins 57.37 Accountant’s letter of qualifications. An accountant or accounting firm retained by a care management organization to comply with this subchapter shall furnish the care management organization, and the care management organization shall obtain and include with the filing of the annual audited financial report required under s. Ins 57.26, a letter from the accountant or accounting firm stating:

Ins 57.37(1) (1) That the accountant or accounting firm is independent with respect to the care management organization and conforms to the standards of his or her profession as contained in the code of professional ethics and pronouncements of the American institute of certified public accountants and the rules of professional conduct of the board of public accountancy of this state, or similar code.

Ins 57.37(2) (2) The background and experience, in general, and the experience in audits of care management organizations of the staff assigned to the engagement and whether each is an independent certified public accountant. This subchapter does not prohibit the accountant or accounting firm from utilizing such staff as he or she deems appropriate where use is consistent with the standards prescribed by generally accepted auditing standards.

Ins 57.37(3) (3) That the accountant or accounting firm understands that the annual audited financial report and his or her opinion on the annual audited financial report will be filed in compliance with this chapter and that the commissioner will be relying on this information in the monitoring and regulation of the financial position of care management organizations.

Ins 57.37(4) (4) That the accountant or accounting firm consents to the requirements of s. Ins 57.38 and that the accountant or accounting firm consents and agrees to make work papers available for review by the commissioner.

Ins 57.37(5) (5) A representation that the accountant or accounting firm is properly licensed by an appropriate state licensing authority and is a member in good standing in the American institute of certified public accountants.

Ins 57.37(6) (6) A representation that the accountant or accounting firm is an independent certified public accounting firm and that there are no grounds for disqualification of the accountant or accounting firm under s. Ins 57.32.

Ins 57.37 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10.

Ins 57.38 Ins 57.38 Availability and maintenance of CPA work papers.

Ins 57.38(1) (1) A care management organization shall require the accountant or accounting firm which conducts an audit or other procedure under this subchapter to make available for review by the commissioner all work papers and any communications related to the audit or procedure between the care management organization and the accountant or accounting firm at the offices of the care management organization or at a reasonable place designated by the commissioner. The care management organization shall require that the accountant retain the audit work papers and communications until the commissioner has filed a report on examination covering the period of the audit but no longer than 7 years from the date of the audit report.

Ins 57.38(2) (2) The commissioner may access work papers, reports, and other materials generated during the audit. Such access shall include the right to obtain photocopies of the work papers and copies of computer disks, or other electronic media, upon which records or working papers are stored. All working papers and communications obtained by the commissioner under this section may be treated by the commissioner as confidential under s. 601.465, Stats.

Ins 57.38 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10.

Ins 57.39 Ins 57.39 Conduct of care management organization in connection with the preparation of required reports and documents.

Ins 57.39(1) (1) No director or officer of a care management organization may, directly or indirectly:

Ins 57.39(1)(a) (a) Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review or communication required under this chapter.

Ins 57.39(1)(b) (b) Make or cause to be made omissions of any material fact necessary in order to make statements made not misleading to an accountant in connection with any audit, review or communication required under this chapter.

Ins 57.39(2) (2) No officer or director of a care management organization, or any other person acting under the direction thereof, shall directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any independent certified public accountant engaged in the performance of an audit pursuant to this chapter if that person knew or should have known that the action, if successful, could result in rendering the care management organization’s financial statements materially misleading. In this subsection, actions that “if successful, could result in rendering the care management organization’s financial statements materially misleading” include actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead or fraudulently influence an independent certified public accountant to do any of the following:

Ins 57.39(2)(a) (a) To issue or reissue a report on a care management organization’s financial statements that is not warranted in the circumstances, due to material violations of generally accepted accounting principles, generally accepted auditing standards, or other professional or regulatory standards.

Ins 57.39(2)(b) (b) To not perform audit, review or other procedures required by generally accepted auditing standards or other professional standards.

Ins 57.39(2)(c) (c) To not withdraw an issued report.

Ins 57.39(2)(d) (d) To not communicate matters to a care management organization’s audit committee.

Ins 57.39 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10.

Ins 57.40 Ins 57.40 Care management organizations to file financial statements. A care management organization shall file annual and quarterly financial statements with the commissioner. A care management organization shall file the financial statements in a format determined by the commissioner in consultation with the department.

Ins 57.40 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10.

Ins 57.41 Ins 57.41 Exemptions and effective dates.

Ins 57.41(1) (1) The commissioner may grant an exemption from compliance with s. Ins 57.26 if the commissioner finds that compliance would constitute a financial or organizational hardship upon the care management organization, except as provided in s. Ins 57.32 (2).

Ins 57.41(2) (2) An exemption may be granted at any time and from time to time for a specified period.

Ins 57.41 History History: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10.