State insurance department needs assistance with risk-focused examination subject to NAIC accreditation review

Our client’s need

A state insurance department (the “Department”) had a large multinational life insurance group-coordinated, risk-focused examination to complete that required various specialists with cybersecurity, investment, reinsurance and actuarial expertise. Due to the size of the organization and coordination efforts, the examination was expected to be subject to NAIC accreditation review.

Baker Tilly’s solution

Baker Tilly provided a comprehensive and experienced team to assist the Department in completing the examination.

• Our experienced examiner-in-charge and financial examination team established a comprehensive project management and coordination schedule collaborating with the organization to optimize requests and the flow of information.
• Our information technology (IT) examiners were engaged to perform Exhibit C IT general controls review and also a review of state data security and privacy laws.
• Our actuarial team conducted a coordinated review with the participating states. Detailed actuarial analysis, including a review of the accelerated underwriting program, was performed. A final report was issued with various observations, recommendations and considerations for the supervisory plan.
• Our reinsurance specialists conducted a detailed review of their reinsurance agreements as well as a review of credit risk and collateral arrangements to help support the examination review.
• Our investment specialists focused on evaluating and reporting on the adequacy of investment custody, valuation, impairment, investment income, use of derivatives, residential and commercial mortgage loans, CMBS, private placements, separate accounts and various other aspects of investment operations. Examination procedures included our evaluation of the investment aspects of the enterprise risk management process, the effectiveness of hedging programs, credit risk monitoring, cryptocurrency investment and other investment risk areas.

Results achieved

Baker Tilly completed the examination by employing its resources and experience with the NAIC risk-focused examination approach and the Financial Condition Examiners Handbook. The examination was selected for accreditation review shortly after completion. Throughout the interviews, the accreditation team praised Baker Tilly’s approach and documentation. The results of the accreditation review was a success for the Department and continued evidence of the quality provided to regulators nationwide.

Looking for more information on this topic or to learn more about our compliance solutions? Reach out to one of our insurance specialists.