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Filings Made Easy for Life, Health and Licensing
Financial Examinations – IT Examinations and Examination Reports
PresentersTony Trevino, CFEChief [email protected]
Linda Hytry, CFEAssistant Chief Examiner – [email protected]
Jamie Walker, CFEAssistant Chief [email protected]
Discussion topics
Overview of Financial Program Overview of Examinations IT Examinations and Examination Tools Examination Reports Questions
Overview of Financial Program
Danny Saenz, CFESenior Associate Commissioner
Financial Program
Godwin OhaechesiCFE
Director - Company Licensing &Registration
Mike BoernerASA, MAAA
Managing Actuary
Doug SlapeCFE, CISA
Chief Financial AnalystFinancial Analysis
Tony TrevinoCPA, CFE
Chief ExaminerExaminations
Angel GarrettCPA, CFE
Director - Rehabilitation and
Liquidation Oversight
Overview of Financial Program, continued
Cradle to Grave Approach Company Licensing and Registration Actuarial Financial Analysis Financial Examinations Rehabilitation and Liquidation Oversight
Overview of Financial Program, continued
Serves as the primary solvency guardian for policyholders
Seeks to detect financial concerns early and take prompt action by applying available statutes, rules and procedures to prevent insolvency and consumer problems
Priorities focus on “firm, fair, effective, and efficient” regulation for all insurance entities, while reducing impediments to competition
Overview of Examinations
David MoskowitzCFE
Assistant Chief Examiner
Market Conduct
Linda Hytry, CFE
Assistant Chief Examiner
AES
Zeke Ramirez, CFE, CPA
Assistant Chief Examiner
Financial - Central
Ignatius Wheeler, CFE
Assistant Chief Examiner
Financial - South
John Villarreal, CFE
Assistant Chief Examiner
Financial - North
Jamie Walker, CFE
Assistant Chief Examiner
Examination Reports
Tony TrevinoCPA, AFE
Chief Examiner
Examinations Key Processes On-site examinations of the books, records, and
operations of insurance companies and other entities
Financial examinations
Market conduct examinations
Analysis of annual operations reports filed by premium finance companies
Examinations Key Processes continued
Target examinations “as needed” in response to potential regulatory concerns
Other entities subject to examination include:Guaranty Fund AssociationsPremium Finance CompaniesReinsurance IntermediariesManaging General Agents
Examinations Coordination with Other States
Lead State Allocation of work-load
Clear understanding regarding each state’s role and needs
Sharing of work papers and findings
Examinations Coordination with Other States continued
Characteristics of Lead States: State with the largest number of domestic insurance
companies in the group
State with large or largest premium volume or exposure
Domiciliary state of top-tiered insurance company
Risk Focused Examinations
Provides clearer methodology for assessing residual risk
Allows the assessment of risk management processes other than those that result in financial statement line item verifications
Texas Policy and Procedures Manual
Procedures and regulations unique to Texas Texas statutes and rules take precedence
IT EXAMINATIONS
IT ExaminationsLinda Hytry
Assistant Chief Examiner
Brian McComackSystems Analyst
(Austin)
Mike MontgomerySystems Analyst
(Austin)
Kurt RuzickaExam Coordinator
(Austin)
Terry SmithSenior IS Examiner
(Dallas)
Tommy FongIS Examiner(Houston)
Turner JonesIS Examiner(Houston)
James BoggsIS Examiner
(Austin)
Sandra MendezIS Examiner
(Austin)
Eric KamedaIS Examiner
(Austin)
VacantIS Examiner
(Dallas)
IS Examiner/System Analyst/Examination Coordinator
Staff Examinations Coordinator IS Examiners (6) System Analysts (2)
Examination Coordinator Initial request for information
part of the pre-planning for an examinationslightly different for large/small companies for information
requested
IS Examiner/System Analyst/Examination Coordinator continued
IS Examiner Support for Financial Examiner IS Control Review ISQ Desk Review
System Analyst Reconciliation of databases (premiums, losses) Sample section utilizing Audit Command Language
(ACL)
Examination Tools ACL
Software Premium/Loss database requests Independent testing and sample selection
TeamMate Electronic work papers Enhance regulatory insurance examinations Central repository for standard examination procedures Work papers can be shared/assessed NAIC Citrix Server for Lead State Examinations
REPORT PROCESSING
Report Contents
Comprised of: Description of company operations Financial statements
Significant Deficiencies: Disclosed in the body of the report Uncorrected deficiencies are accumulated in the
“Summary of Significant Findings”
Report Contents continued
Examination Report Comments Report activities that are contrary to the Insurance
Code, Administrative Code, or SSAP guidance.
Management Letter Comments Disclose items that are not substantive, material, or of
major regulatory concern.
Report Processing
Workpapers transmitted to Austin
One additional review of the report
Signed by the Examiner-in-Charge
Final Report transmitted to the Insurance Company
Company Receives Report
Initiating the Appeal Process Governed by 28 TAC § 7.83
Adoption of the Report 15 days after report is received, if not appealed
Response to Report Deficiencies
QUESTIONS?
