South Dakota § 58-43-9.2 - Disqualification of accountant for services provided contemporaneously with audit.

§ 58-43-9.2. Disqualification of accountant for services provided contemporaneously with audit.

The director may not recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by an accountant who provides to an insurer, contemporaneously with the audit, the following nonaudit services:

(1)    Bookkeeping or other services related to the accounting records or financial statements of the insurer;

(2)    Financial information systems design and implementation;

(3)    Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;

(4)    Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions, and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer's financial statements. An accountant's actuary may also issue an actuarial opinion or certification on an insurer's reserves if the following conditions have been met:

(a)    Neither the accountant nor the accountant's actuary has performed any management functions or made any management decisions;

(b)    The insurer has competent personnel or engages a third party actuary to estimate the reserves for which management takes responsibility; and

(c)    The accountant's actuary tests the reasonableness of the reserves after the insurer's management has determined the amount of the reserves;

(5)    Internal audit outsourcing services;

(6)    Management functions or human resources;

(7)    Broker or dealer, investment adviser, or investment banking services;

(8)    Legal services or expert services unrelated to the audit; or

(9)    Any other services that the director determines, by rules promulgated pursuant to chapter 1-26, are impermissible.

Source: SL 2009, ch 271, § 8.