Okla. Stat. tit. 36, § 36-311A.3

As used in the Oklahoma Annual Financial Report Act:

1. "Accountant" or "independent certified public accountant"

means an independent certified public accountant or accounting firm

in good standing with the American Institute of Certified Public

Accounts (AICPA), and in all states in which the accountant is

licensed to practice and for Canadian and British companies, it

means a Canadian-chartered or British-chartered accountant;

2. An "affiliate" of, or person "affiliated" with, a specific

person, is a person that directly, or indirectly through one or more

intermediaries, controls, or is controlled by, or is under common

control with, the person specified;

3. "Audit committee" means a committee or equivalent body

established by the board of directors of an entity for the purpose

of overseeing the accounting and financial reporting processes of an

insurer or group of insurers, the internal audit function of an

insurer or group of insurers, if applicable, and external audits of

financial statements of the insurer or group of insurers, and audits

of financial statements of the insurer or group of insurers. The

audit committee of any entity that controls a group of insurers may

be deemed to be the audit committee for one or more of these

controlled insurers solely for the purposes of the Oklahoma Annual

Oklahoma Statutes - Title 36. Insurance Page 79

Financial Report Act at the election of the controlling person. The

exercise of this election shall be pursuant to subsection G of

Section 311A.14 of this title. If an audit committee is not

designated by the insurer, the entire board of directors of the

insurer shall constitute the audit committee;

4. "Audited financial report" means and includes those items

specified in Section 311A.5 of this title;

5. "Indemnification" means an agreement of indemnity or a

release from liability where the intent or effect is to shift or

limit in any manner the potential liability of the person or firm

for failure to adhere to applicable auditing or professional

standards, whether or not resulting in part from knowing of other

misrepresentations made by the insurer or its representatives;

6. "Independent board member" has the same meaning as described

in subsection E of Section 311A.14 of this title;

7. "Insurer" means a licensed insurer as defined in Section 103

of this title. For purposes of the Oklahoma Annual Financial Report

Act, insurer includes but is not limited to fraternal benefit

societies, health maintenance organizations, multiple employer

welfare arrangements, title insurers, and similar organizations

licensed by the Insurance Commissioner;

8. "Group of insurers" means those licensed insurers included

in the reporting requirements of Article 16A of the Oklahoma

Insurance Code, or a set of insurers as identified by management,

for the purpose of assessing the effectiveness of internal control

over financial reporting;

9. "Internal audit function" means a person or persons that

provide independent, objective and reasonable assurance designed to

add value and improve an organization's operations and accomplish

its objectives by bringing a systematic, disciplined approach to

evaluate and improve the effectiveness of risk management, control

and governance processes;

10. "Internal control over financial reporting" means a process

effected by the board of directors, management, and other personnel

of an entity designed to provide reasonable assurance regarding the

reliability of the financial statements, i.e., those items specified

in paragraphs 2 through 7 of subsection B of Section 311A.5 of this

title and includes those policies and procedures that:

a. pertain to the maintenance of records that, in

reasonable detail and accurately, fairly reflect the

transactions and dispositions of assets,

b. provide reasonable assurance that transactions are

recorded as necessary to permit preparation of the
those items specified

in paragraphs 2 through 7 of subsection B of Section 311A.5 of this

title and includes those policies and procedures that:

a. pertain to the maintenance of records that, in

reasonable detail and accurately, fairly reflect the

transactions and dispositions of assets,

b. provide reasonable assurance that transactions are

recorded as necessary to permit preparation of the

financial statements, i.e., those items specified in

paragraphs 2 through 7 of subsection B of Section

311A.5 of this title and that receipts and

Oklahoma Statutes - Title 36. Insurance Page 80

expenditures are being made only in accordance with

authorizations of management and directors, and

c. provide reasonable assurance regarding prevention or

timely detection of unauthorized acquisition, use, or

disposition of assets that could have a material

effect on the financial statements, i.e., those items

specified in paragraphs 2 through 7 of subsection B of

Section 311A.5 of this title;

11. "SEC" means the United States Securities and Exchange

Commission;

12. "Section 404" means Section 404 of the Sarbanes-Oxley Act

of 2002 and the rules and regulations of the SEC promulgated

thereunder;

13. "Section 404 Report" means the report on internal control

over financial reporting of management as defined by the SEC and the

related attestation report of the independent certified public

accountant; and

14. "SOX Compliant Entity" means an entity that either is

required to be compliant with, or voluntarily is compliant with, all

of the following provisions of the Sarbanes-Oxley Act of 2002:

a. the preapproval requirements of Section 201 (Section

10A(i) of the Securities Exchange Act of 1934),

b. the audit committee independence requirements of

Section 301 (Section 10A(m)(3) of the Securities

Exchange Act of 1934), and

c. the internal control over financial reporting

requirements of Section 404 (Item 308 of SEC

Regulation S-K).