The Allstate Corporation
Audit Committee Charter
- Purpose and Powers: Assist the Board in its oversight role with full access to
resources necessary to execute its duties.
- The Committee assists the Board of Directors in fulfilling its oversight
responsibilities for the following:
- The integrity of financial statements and other financial information.
- The Corporation’s system of internal control over accounting and financial
reporting and disclosures, enterprise risk, and ethics, and compliance with
legal and regulatory requirements.
- The evaluation of the independent registered public accountant’s
qualifications, performance, and independence.
- The evaluation of the Corporation’s internal audit function, including an
assessment of the chief audit executive’s qualifications, performance, and
- Unless the Committee elects to act as the audit committee of an insurance company
subsidiary of the Corporation, it will not be responsible for oversight of statutory
financial reporting and financial statements filed with state insurance regulators by
such subsidiary. However, the Committee reviews and discusses criteria for the
selection of the members of the audit committees of the Corporation’s insurance
- The Committee has authority to engage advisors and has sole authority and
responsibility to appoint, compensate, retain, and oversee the work of the
Corporation’s independent registered public accountant engaged for the purpose of
preparing or issuing an audit report or performing other audit, review or attest
- The Committee pre-approves all auditing and permitted non-auditing
services to be provided by the independent registered public accountant and
the terms of and fees for such services, subject to de minimis exceptions
allowed by law. It also reviews the independent registered public
accountant’s audit plan, scope, and strategy.
- The Committee may delegate to one or more of its members the authority to
grant pre-approvals of all auditing and all permitted non-auditing services,
provided that any pre-approvals are communicated to the full Committee at
its next meeting.
- The Committee has the power to conduct or authorize special projects or
investigations related to any matters brought to its attention, with full access
to all books, records, facilities, and personnel of the Corporation as the
Committee considers necessary to discharge its responsibilities. The
Committee has authority to engage independent counsel and other advisers
determined necessary to carry out its duties, including the Corporation’s
internal legal counsel and internal auditors.
- The Corporation provides for appropriate funding, as determined by the Audit
Committee, for payment of compensation to the independent registered public
accountant for the purpose of issuing an audit report or performing other audit,
review, or attest services for the Corporation, for payment of compensation to any
advisors employed by the Committee, and for payment of the Committee’s
ordinary administrative expenses in carrying out its duties.
- The Committee prepares (or causes to be prepared) a report to be included in the
Corporation’s annual proxy statement detailing its review, discussion, and
recommendation regarding the Corporation’s audited financial statements and their
inclusion in the annual report on Form 10-K.
- Membership: Members must meet independence standards and be financially
- The Committee must have a minimum of three members and all members must
satisfy the independence standards set forth in the Corporation’s Director
- The Committee Chair and other members of the Committee are appointed by the
Board based on the recommendation of the Nominating and Governance
Committee in accordance with the independence and experience requirements of
the New York Stock Exchange, the SEC, and the Director Independence Standards
adopted by the Board.
- The Committee Chair and other members of the Committee may be removed by the
- Each member of the Committee will be, in the Board’s judgment, “financially
literate” or will become financially literate within a reasonable period of time after
his or her appointment.
- At least one member will be an “audit committee financial expert” as determined by
the Board in accordance with SEC rules.
- The Chairs of the Committee and the Risk and Return Committee will be members
of both committees. The Corporation’s chief risk officer will generally attend all
- No director may serve as a member of the Committee if such director serves on the
audit committees of more than two other public companies unless the Board
determines, based on the recommendation of the Nominating and Governance
Committee, that such simultaneous service would not impair the ability of such
director to effectively serve on the Committee and such determination is disclosed
in the Corporation’s annual proxy statement.
- Committee Structure and Operations: The Committee controls its agenda and
reports to the Board.
- The Committee meets at least four times a year. The Committee Chair may call
additional meetings as necessary. The Committee Chair develops meeting agendas
and reports regularly to the Board on the Committee’s actions, recommendations,
and any topics that it believes should be reviewed or discussed with the Board.
- At least quarterly, the Committee meets separately with management, with the
chief audit executive, and with the independent registered public accountant and
may meet with the Corporation’s chief audit executive or independent registered
public accountant without management present whenever the Committee deems it
- The Committee Chair reviews with the Board any issues that arise with respect to
the quality or integrity of the Corporation’s financial statements, its compliance
with legal or regulatory requirements, the performance and independence of the
independent registered public accountant, or the performance of the internal audit
- The Committee regularly and no less than annually i) evaluates its own
performance and reports to the Board on such evaluation and ii) reviews and
assesses the adequacy of its Committee Charter and recommends any proposed
changes to the Board.
- Duties and Responsibilities.
- Review financial statements and other financial information.
- The Committee reviews and discusses with management, its chief
audit executive, and the independent registered public accountant the
Corporation’s annual audited and quarterly financial statements,
including management’s discussion and analysis of financial condition
and results of operations and risk factors.
- The Committee reviews major changes or issues affecting the Corporation’s
auditing and accounting principles, policies, and practices, and financial
statement presentations including critical accounting estimates (with
comparisons to the critical accounting estimates of other companies in the
industry) and analyses of the effects of alternative generally accepted
accounting principle (GAAP) methods on the financial statements. They
also review analyses prepared by management or the independent registered
public accountant setting forth significant financial reporting issues and
judgments made in connection with the preparation of the financial
- The Committee reviews the effect of regulatory and accounting initiatives
on the Corporation’s financial statements.
- The Committee reviews with the Corporation’s chief legal officer the
status of legal matters that may have a material impact on the
Corporation’s financial statements.
- The Committee recommends to the Board whether the audited financial
statements should be included in the Corporation’s annual report on Form
- The Committee discusses the Corporation’s process for preparing
earnings releases, as well as its processes for providing financial
information and earnings or earnings-related guidance to analysts and
rating agencies, generally (including the types of information to be
disclosed and types of presentations to be made).
- The Committee reviews and discusses with the independent registered
public accountant its reports on the Corporation’s financial statements,
a) Judgments about the acceptability and quality of the accounting
principles used in the Corporation’s financial reporting.
b) The scope of audits conducted.
c) Any significant difficulties encountered in the audit work, including
any restrictions on the scope of its activities or access to requested
information, any significant disagreements with management, and
d) Accounting adjustments noted by the audit team; any significant
communications between the audit team and its national office
respecting auditing or accounting issues presented by the
engagement; any “management” or “internal control” letter issued or
proposed by the independent registered public accountant to the
Corporation; and any other issues that the Committee may deem
e) Significant risks identified through the firm’s risk assessment
- Review the Corporation’s system of internal control and disclosure controls,
enterprise risk, ethics and compliance, and procedures for receipt, retention,
and treatment of complaints and concerns pursuant to the requirements of the
- The Committee reviews the adequacy of internal control over financial
reporting and disclosure controls and procedures that could significantly
affect the Corporation’s financial statements or MD&A and any special
audit steps adopted in light of material control deficiencies.
- The Committee reviews and discusses with management and the
independent registered public accountant significant deficiencies or material
weaknesses in internal control over statutory financial reporting of the
Corporation’s insurance company subsidiaries and such other matters as the
Committee may deem appropriate in connection with statutory financial
- The Committee reviews disclosures made to the Committee by the
Corporation’s chief executive officer and chief financial officer during their
certification process for the annual and quarterly financial reports about any
significant deficiencies in the design or operation of internal controls over
financial reporting or material weaknesses in such controls and any fraud
involving management or other employees who have a significant role in
the Corporation’s internal controls.
- The Committee reviews risks discussed by the Risk and Return Committee
for consideration in its review of the Corporation’s control environment.
- The Committee discusses guidelines and policies that govern the process
by which risk assessment and risk management is handled, including the
Corporation’s major financial risk exposures and the steps management
has taken to monitor and control them.
- The Committee reviews and approves the Corporation’s Code of Ethics
applicable to the Board of Directors and Allstate employees, including the
chief executive officer, chief financial officer, chief accounting officer or
controller, or persons performing similar functions. The Committee has
sole authority to grant waivers under the Code for the Corporation’s
directors, executive officers, and senior financial officers and to
periodically assess the adequacy of the Code of Ethics. In addition, the
Committee oversees the Corporation’s ethics and compliance program.
a) The Committee requests that the chief ethics and compliance
officer communicate directly and promptly with the Committee on
any breach of the Code of Ethics, or any potential or actual
criminal conduct, by any executive officer.
b) At least annually, the Committee reviews and discusses with the
chief ethics and compliance officer a report describing the
Corporation’s ethics and compliance program and its
effectiveness. This includes any ethics and compliance matters
that may have a material impact on the Corporation’s reputation,
operations, financial condition, results of operations, or cash
c) The Committee reviews any significant recommendations from
the Corporation's independent registered public accountant and
internal audit department concerning ethics and compliance and
compliance with the Corporation’s policies relating to ethics,
conflicts of interest, perquisites, and use of corporate assets.
- The Committee establishes procedures for the receipt, retention, and
treatment of complaints regarding accounting, internal accounting
controls, and auditing matters and also for the confidential and
anonymous submission by employees of related concerns, as required by
the rules and regulations of the SEC.
- Evaluate the qualifications, performance, and independence of the
independent registered public accountant.
- At least annually, the Committee evaluates the qualifications, performance,
and independence of the Corporation’s independent registered public
accountant, including an evaluation of the lead audit partner.
- As part of its evaluation, the Committee reviews a report by the independent
registered public accountant that describes the firm’s internal qualitycontrol
procedures and any material issues raised by the firm’s most recent
internal quality-control review, or peer review, or by any inquiry or
investigation by governmental or professional authorities, within the
preceding five years, relating to one or more independent audits conducted
by the firm and any steps taken to deal with any such issues.
- At least annually, the Committee assesses the independent registered public
accountant’s written communications on independence and all relationships
between it and the Corporation to determine the impact that any such
relationships may have on the firm’s independence and any actions deemed
appropriate or necessary.
- The Committee considers whether the role of the Corporation’s independent
registered public accountant should be rotated among different registered
public accounting firms. In addition, the Committee ensures the rotation of
audit partners and reviews the selection of the lead partner.
- The Committee may not retain as the Corporation’s independent registered
public accountant any firm in which the chief executive officer, chief
financial officer, controller, or any person serving in an equivalent position
for the Corporation was employed and participated in any capacity in an
audit of the Corporation during the one-year period prior to the date of
initiation of the audit for which the retention is being made. The
Committee maintains a hiring policy for employees or former employees of
the independent registered public accountant who participated in any
capacity in an audit of the Corporation.
- Evaluate the qualifications, performance, and independence of the internal
- The Committee is responsible for the functional oversight of the
Corporation’s internal audit function.
- The Committee reviews and approves the internal audit department charter,
audit plan, policies and procedures, resources, and overall risk assessment
- The Committee discusses with the independent registered public accountant
and management the internal audit department responsibilities, audit plan,
budget, and staffing.
- At least annually, the Committee evaluates the appointment, performance,
and independence of the chief audit executive and any conflicts of interest
that exist in the internal audit department.
- The Committee reviews significant findings from the internal audit
department, including its assessments of the Corporation’s system of
internal control with respect to risk management processes.
- The Committee reviews the results of annually conducted internal quality
assurance reviews and the results of external quality assurance reviews
conducted every five years.
Clarifications and Commentary
In carrying out its oversight responsibilities, the Committee is not providing expert or
special assurance as to the Corporation’s financial statements and legal and regulatory
compliance or any professional certification as to the work of the independent registered
public accountant. It is not the duty or responsibility of the Committee or its members to
conduct auditing or accounting reviews or procedures or to set independence standards for
the independent registered public accountant. Each member of the Committee shall be
entitled to rely on (i) the integrity of those persons and organizations within and outside the
Corporation from which the Committee receives information, (ii) the accuracy of the
financial and other information provided to the Committee by such persons or
organizations absent actual knowledge to the contrary (which the Committee Chair shall
promptly report to the Board), and (iii) representations made by management, the internal
audit department or the independent registered public accountant as to any non-audit
While the Audit Committee has the responsibilities and powers set forth in this Charter, the
Committee is not required to plan or conduct audits or to determine that the Corporation’s
financial statements are complete and accurate and are in accordance with generally
accepted accounting principles. These are the responsibilities of the independent registered
public accountant, the internal audit department and management.
|F. Duane Ackerman|
|Judith A. Sprieser|
|Mary Alice Taylor|
|Robert D. Beyer|
|Kermit R. Crawford |