ICA.CH47

Question 1

duties of audit committee (related to review)

Answer 1

• review annual statement before BoD approval
• review such company returns as superintendent may specify
• review investments & transactions with material adverse events brought to audit committee

Question 2

duties of BoD

Answer 2

• establish procedures to resolve conflicts of interest
• establish committees to
  
  • audit
  • conduct review
  • monitor conflict resolution procedures
• setting direction, overall strategy and oversee management

Question 3

describe audit membership

Answer 3

• may not be officers or employees for the company
• majority must consist of directors not affiliated with the company

Question 4

duties of audit committee (related to require)

Answer 4

• require management to implement and maintain internal controls

Question 5

duties of audit committee (related to meet)

Answer 5

• meet with auditor: discuss annual report
• meet with actuary: discuss parts of annual report prepared by actuary
• meet with chief internal auditor: discuss effectiveness of internal controls

Question 6

list 5 items BoD must present to sharesholders and policyholders at AGM

Answer 6

• FS for most recent 2 years
• auditor’s report
• actuary’s report
• description of roles for auditor & actuary
• anything else required b the by-laws of company

Question 7

Can CFO be AA?

Answer 7

yes, if
- audit committee writes to OSFI that duties of CFO&AA can be adequately and independently performed
- OSFI authorizes the appointment

Question 8

ways an actuary may cease to be AA

Answer 8

• appointment revoked by BoD
• resignation
• death
• the person ceases to be an actuary (FCIA designation revoked due to disciplinary action)

Question 9

what must BoD do upon AA vacancy?

Answer 9

notify OSFI and fill vacancy

Question 10

what must AA do upon revocation?

Answer 10

• write report outlining circumstances and reasons
• send to BoD and OSFI

Question 11

what must prospective replacement AA do?

Answer 11

• request written report on circumstances and reasons for prior AA leaving
• if not received within 15 days, new AA appointment may simply be accepted

Question 12

AA’s right to information and protection from liability

Answer 12

AA may request records & explanations from
- BoD
- officers
- employees
AA can’t be held liable for such good faith requests

Question 13

reporting requirements of AA to BoD

Answer 13

AA roles & duties 3&4:
- provide report on financial position annually
- provide report on financial condition, usually DCAR

Question 14

reporting requirement of AA to CEO

Answer 14

AA roles & duties 5:
- report on MAR (Material Adverse Events) that require rectification 纠正

Question 15

what actions should be taken if no suitable action by company on MAE

Answer 15

send original report on MAE to OSFI & BoD

Question 16

what is qualified privilege?

Answer 16

if AA makes good faith report under
- pertains to report from outgoing AA
- pertains to report on MAE
与outgoing AA or MAE报告有关
then AA won’t be liable in civil action seeking indemnification

Question 17

requirements for foreign companies before issuing insurance

Answer 17

• must have assets > 5m vested in trust (or an amount per superintedent)
• must appoint an actuary and auditor
• must establish chief actuary
• must have min MCT/BAAT ratio
• any other conditions super deems appropriate