Reporting Instructions – Office of the Commissioner of Securities and Insurance
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The annual CPA audit shall include the following financial statements:
a) Balance sheet;
b) Statement of operations;
c) Statement of changes in financial position;
d) Statement of changes in paid up, gross paid in and contributed surplus and
unassigned funds (surplus); and
e) Notes to financial statements, which shall include those that are required by
1. A reconciliation of differences, if any, between the audited financial
report and the statement or form filed with the Commissioner (i.e.,
2. A summary of ownership and relationship of the company and all
affiliated corporations or companies insured by the captive.
3. Actuarial Opinion:
Pursuant to Mont. Admin. R. 6.6.6816, the annual CPA audit shall include an
opinion as to the adequacy of the captive insurer’s loss reserves and loss expense
reserves. The individual who certifies as to the adequacy of the reserves shall be
approved by the Commissioner and shall be a member of the Casualty Actuarial
Society, a member in good standing of the Academy of Actuaries, or an individual
who has demonstrated competence in loss reserve evaluation to the Commissioner.
The required opinion may follow the NAIC Annual Statement Instructions, but is not
required to do so. For non-RRG opinions that do not follow the NAIC Annual
Statement Instructions, the actuary must still state his or her “opinion” regarding
the sufficiency of the company’s loss reserves and loss expense reserves, and the
actuary must sign such opinion.
4. Special Instructions for Cell Reporting:
Each Protected Cell Captive Insurance Company (PCC core) and each protected cell
(cell) affiliated with the PCC core shall file separate unaudited financial statements
on the Montana Short Form on or before April 1st
of each year. For example, if
there is a PCC core and two cells, then the PCC core files an unaudited financial
statement to report its own business, and each cell files an unaudited financial
statement to report the cell’s business.
Each PCC core shall file “combined”
audited financial statements with the CSI on or
before June 30
of each year. The auditor shall express an opinion on the combined
assets, liabilities, capital and surplus of the PCC core and each cell. The detailed
assets, liabilities, and capital and surplus balances of the PCC core and each cell
shall be disclosed in a supplemental schedule to the financial statements.