FINANCIAL AND TARGET EXAMINATIONS

Our consultants have provided actuarial assistance on hundreds of financial examinations covering the entire spectrum of property and casualty insurance lines of business, as well as health and title insurance.  The types of examinations in which we have been involved range from simple examinations of single-state, mono-line insurers with less than $1 million in written premium to coordinated multi-states examinations of multi-line groups with nearly $40 billion in net reserves. 

  • The majority of these examinations have revealed no material problems and no recommended reserve adjustment, though often there are recommendations related to compliance issues or documentation that are communicated via the Letter to Management.
  • Some have resulted in material recommendations such as a reserve adjustment or disallowance of reinsurance due to a lack of sufficient transfer of risk.
  • We have worked on examinations whose scope was expanded to include reviewing the rates and rating structure, risk transfer analysis, computer system, and investment performance and strategy. 

We have provided examination assistance both directly to state regulators as well as in conjunction with financial examination vendors.  Throughout all of these arrangements, we have demonstrated the ability to coordinate and cooperate with the various parties that are involved with examinations such as attorneys, appraisers, CPAs, and other professionals.

Multistate / Market Conduct

Our consultants have been involved in several multi-state market conduct examinations related to specific lines of business and rating practices as well as and multi-state financial examinations.  Some examples include:

  • NAIC multi-state examination of AIG regarding the under-reporting of workers’ compensation premiums.
  • Multi-state solvency examination of Lloyd’s of London.
  • Multi-state examination of the mortgage lender-placed insurance marketplace.
  • Multi-state examination of the travel insurance marketplace.
  • Multi-state examination of the aerospace and aviation insurance marketplace.
  • Several multi-state examinations on behalf of state regulators, including: Chubb, Direct General, Liberty Mutual, Travelers.

NAIC Experience

Our consultants are knowledgeable of NAIC requirements for examinations as a result of an extensive examination history that goes back 20 years and spans hundreds of financial examinations.  We maintain a comprehensive library of regulatory reference material including NAIC Accounting Practices and Procedures, Annual Statement Instructions, Examiners’ Handbooks, etc.  In addition, our consultants have been involved with the NAIC in a variety of ways, including:

  • Actuarial assistance to the Examiner in Charge of an ongoing NAIC multi-state exam regarding the Force Placed Hazard and Flood Insurance business practices and rate level adequacy of two major carriers.
  • Assistance to the NAIC Credit Property Working Group in its development of the Credit Personal Property Insurance Model Act.
  • Assisting the chair of NAIC’s Personal Lines Modernization Working Group, P&C Insurance Committee, in developing general guidance for the regulation of personal line rates by the states.
  • Assistance to the NAIC in the Development of revisions to the Credit Insurance Experience Exhibits.
  • Ongoing assistance to Examiner-in-Charge on NAIC Multi-state Exam in which all 50 states are participating regarding the under-reporting of workers’ compensation premiums by a major carrier.