An insurer is exempt from the requirements of this section if: The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000; and The insurer is a member of a group of insurers and the group has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1,000,000,000. Function. The insurer or group of insurers shall establish an internal audit function providing independent, objective, and reasonable assurance to the audit committee and insurer management regarding the insurers’: Governance; Risk management; and Internal controls. The reasonable assurance shall be provided by performing general and specific audits, reviews, and tests and by employing other techniques deemed necessary to: Protect assets; Evaluate control effectiveness and efficiency; and Evaluate compliance with policies and regulations. Independence. In order to ensure that internal auditors remain objective, the internal audit function shall be organizationally independent. The internal audit function may not defer ultimate judgement on audit matters to others and shall appoint an individual to head the internal audit function who will have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships. Reporting. The head of the internal audit function shall report to the audit committee on: The periodic audit plan; Factors that may adversely impact the internal audit function’s independence or effectiveness; Material findings from completed audits; and The appropriateness of corrective actions implemented by management as a result of audit findings. The reporting shall be done regularly, but on no less than an annual basis. Additional Requirements. If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the internal audit function requirements set forth in this regulation at the: Ultimate controlling parent level; Intermediate holding company level; or Individual legal entity level.