Appointment and qualification of auditors

(1) The shareholders of an insurer or insurance intermediary shall appoint annually an auditor who is– (a) knowledgeable and experienced in the audits of insurers to the satisfaction of the directors or principal representative of the insurer or insurance intermediary and the Supervisor; and (b) independent, within the meaning of sub- section (3), of the insurer or insurance intermediary, its subsidiaries and other affiliates and the directors and officers of the or its subsidiaries and other affiliates. (2) For the purposes of this section, independence is a question of fact and an auditor is not independent of an insurer or insurance intermediary if he85 (a) has any financial relationship with the insurer or insurance intermediary other than as a policyholder; (b) is a director, officer, employee or agent of the insurer or insurance intermediary or of any of its subsidiaries or other affiliates; (c) has any financial relationship with a director, officer, employee or agent of the insurer or insurance intermediary or of any of its subsidiaries or other affiliates; (d) owns any share or other security of the insurer or insurance intermediary or beneficially owns or controls, directly or indirectly, a material interest in the shares or other securities of the insurer or insurance intermediary or of any of its subsidiaries or other affiliates; or (e) has been a receiver, receiver-manager, liquidator, judicial manager or trustee in bankruptcy of the insurer or insurance intermediary or any subsidiary or other affiliate of the or intermediary within two years immediately preceding the appointment of the auditor, other than a subsidiary or affiliate acquired through a realisation of security. (3) Upon the appointment of an auditor in accordance with sub-section (1), the insurer or insurance intermediary shall immediately give written notice to the Supervisor of the appointment, and if the Supervisor has valid reason to believe that the auditor is not qualified for appointment, he may disapprove the appointment and notify the insurer or insurance intermediary in writing, whereupon the insurer or insurance intermediary shall immediately remove that auditor and appoint another auditor who is qualified. 86 (4) If an insurer or insurance intermediary does not or is unable to appoint an auditor qualified under this section, the Supervisor, notwithstanding section 173(6) or any other provisions of the Companies Act, shall have the power to appoint an auditor for the insurer or insurance intermediary, and the remuneration of the auditor so appointed shall be determined by the Supervisor and paid by the insurer or insurance CAP. 250. (5) An insurer or insurance intermediary, immediately upon the resignation or termination of appointment of an auditor for any reason, shall– (a) notify the Supervisor in writing giving the reasons for the resignation or termination; and (b) appoint another auditor in conformity with the requirements of this section.