§ 31–303. Contents of annual audited financial report.

The annual audited financial report shall report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flow, and changes in capital and surplus for the year then ended in conformity with statutory accounting practices prescribed, or otherwise permitted, by the jurisdiction where it is domiciled. The annual audited financial report shall include the following:

(1) Report of an independent certified public accountant;

(2) Balance sheet reporting admitted assets, liabilities, capital, and surplus;

(3) Statement of operations;

(4) Statement of cash flows;

(5) Statement of changes in capital and surplus;

(6) Notes to the financial statements, which shall:

(A) Be those required by the appropriate NAIC annual statement instructions and the NAIC Accounting Practices and Procedures Manual; and

(B) Include a reconciliation of differences, if any, between the audited statutory financial statement and the annual statement filed pursuant to Chapter 19 of this title [§ 31-1901 et seq.], and a written description of the nature of these differences; and

(7) The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the Mayor, and the financial statement shall be comparative, presenting the amounts as of December 31st of the current year and the amounts as of the immediately preceding December 31st. However, in the first year in which an insurer is required to file an audited financial report, the comparative data may be omitted.

(Oct. 21, 1993, D.C. Law 10-48, § 4, 40 DCR 6102; Feb. 27, 1996, D.C. Law 11-90, § 5(a), 42 DCR 7155; Mar. 27, 2003, D.C. Law 14-255, § 2, 50 DCR 236; Mar. 12, 2011, D.C. Law 18-317, § 2(c), 57 DCR 12418.)

Prior Codifications

1981 Ed., § 35-3203.

Section References

This section is referenced in § 31-301 and § 31-307.

Effect of Amendments

D.C. Law 14-255 rewrote par. (6) which had read:

“(6) Notes to financial statements, including notes required by the appropriate NAIC annual statement instructions and any other notes required by generally accepted accounting principles. The notes shall also include:

“(A) A reconciliation of differences, if any, between the audited statements to be filed with the Mayor and the NAIC annual statement filed pursuant to the insurance laws of the District of Columbia; and

“(B) A summary of ownership and relationships of the insurer and all affiliated companies; and”

D.C. Law 18-317, in the lead-in text, substituted “jurisdiction where it is domiciled” for “Mayor”; and rewrote par. (6), which formerly read:

“(6) Notes to the financial statements, including notes required by the appropriate NAIC’s annual statement instructions, shall include a reconciliation of differences, if any, between the audited financial report and the annual financial statement filed on March 1st with the Mayor, with a written description of the nature of the differences; and”

Emergency Legislation

For temporary amendment of section, see § 6(a) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and § 5(a) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844).

Temporary Legislation

For temporary (225 day) amendment of section, see § 5(a) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).