Except for foreign or alien insurers licensed in the State and SOX compliant entities and their wholly owned subsidiaries, the audit committee itself appoints the accountant, sets its pay and oversees its work for the audited financial report and related work, including resolving disagreements between management and the accountant about financial reporting, and each accountant reports directly to the committee. The committee also oversees the internal audit function where section 15 requires one and grants it the authority and resources it needs. Every member must be a director of the insurer or of the controlling entity whose committee was elected. The committee must require the accountant to report to it on a timely basis, in line with the auditing standard on communication with audit committees, every significant accounting policy and every material permitted practice, every material alternative treatment within statutory accounting discussed with management with their ramifications and the accountant's preference, and other material written communications such as the management letter and schedule of unadjusted differences; a holding company system may receive these on an aggregate basis with substantial differences among insurers identified.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.