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Regulatory Insurance
Examinations/Audits
ARC Strategic Services,
Your trusted partner for state insurance
examinations and audits.
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Wondering how to ensure a successful state examination/audit?
Unsure if your policies and procedures meet regulatory standards?
Concerned about responding to requests in a way that is acceptable to the state insurance department?
ARC Strategic Services has the answers you need. Our team of seasoned insurance experts specializes in regulatory compliance, addressing the strategic needs of your organization.
Navigating the State Insurance Examination/Audit Process with Expertise
Are you prepared for the evolving landscape of state insurance examinations? The financial examination/audit process transitioned from a focus on mere financial statement accuracy to a comprehensive evaluation of operational risks and mitigation efforts. It is therefore crucial to have the right support by your side.
At ARC Strategic Services, we understand the intricate shifts in the examination process and stand ready to assist your organization in achieving success. With our team’s extensive experience and background, we offer tailored solutions to navigate you through every stage of the examination with confidence. Our consultants have spent their entire careers in both the industry (CFO/Controller) and regulatory (financial examiner, Commissioner) side of insurance.
Gone are the days of merely assessing financial statements for mistakes. Today, the examination process delves deeper into understanding the inherent risks within insurers’ operations and evaluating their proactive measures to identify and mitigate these risks effectively. Our team excels in this nuanced approach, providing qualitative assessments that align with the evolving standards.
Comprehensive Risk Assessments
Identifying potential vulnerabilities and developing strategies for mitigation.
Proactive Compliance Measures
Ensuring adherence to regulatory requirements and industry best practices.
First-Time Accuracy
Incorrect responses multiply examiner questions and cause delays. We ensure accuracy on the first attempt to avoid extended timelines and unnecessary scrutiny.
Expert Representation
Advocating on your behalf during the examination process, fostering transparency and clarity.
How We Can Help
Requests from examiners during a state insurance examination can be voluminous and complex. The ARC Strategic Services team builds a trusted partnership with your team so that together, we satisfy the stringent timelines and complex responses dictated by the state regulators. Below is a sampling of examination requests that we have completed for clients:
Financial Examinations
Discovery & Planning
The examination begins with a comprehensive discovery phase where examiners gather foundational information about your organization, its governance structure, and key operational areas. During this phase, ARC helps you compile and organize initial documentation while preparing leadership for critical interviews.
Documentation & Information Gathering
- •Examination Planning Questionnaire (Exhibit B)
- •MLR Network Adequacy
- •Board of Governors Listing
- •Board and Committee Minutes
- •Actuarial Reports
- •NAIC Biographical Information
- •Actuarial Information
- •Custodial Agreements
- •Articles and Amendments
- •Paid Claims Data
- •Claim Check Register
Governance & Compliance Review
- •Auditor Workpaper Access
- •C-Level Interview Schedule
- •Board Members Conflict Interest Statements
- •Review of External Audit workpapers
- •Bylaw review and gap analysis
- •Filing of Form D
- •Contingent Liabilities
- •Conflict of Interest statements review
- •Code of Conduct Acknowledgement
- •Whistleblower Policy Testing
- •Claim forms and applications
- •Review of CPA Engagement Letter
Risk Assessment & Understanding
Examiners assess inherent risks within your key functional activities, including reserving, pricing, underwriting, claims handling, and investment management. ARC facilitates discussions between your operational teams and examiners to ensure they understand your risk landscape and mitigation strategies.
Operational Risk Review
- •Reserving Risk Assessment
- •Pricing and Underwriting Risk Review
- •Claims Handling Processes
- •Investment Strategy & Monitoring
- •Reinsurance Arrangements
- •Related-Party Transactions
- •Producer/MGA Activity Monitoring
- •Lines of Business Analysis
Documentation Supporting
- •Flux Analysis
- •Lag Table Cell Paid Data Support
- •Five Year Proforma
- •Subsequent Events Documentation
- •Reinsurance Contract Review Checklist
- •Investments Compliance Checklist
- •Investment Accounts Information
- •Annual Statement Notes
Controls & Mitigation Evaluation
The examination team evaluates the control environment and risk mitigation strategies your organization has implemented. This includes assessing the quality of internal audit, IT controls, claims handling procedures, and financial reporting controls. ARC coordinates testing and documentation to support your control assertions.
Control Environment & Testing
- •Controls Mitigation Strategies
- •IT Control Documentation
- •Internal Audit Assessment & Reports
- •CPA Workpaper Review
- •Claims Completeness Testing
- •Claims Testing
- •Journal Entries Support
- •Key Bank Account Authorization
Governance & Risk Controls
- •Controls Supporting Documentation
- •Cash Reconciliations
- •Questions for Appointed Actuary
- •Prospective Risk BCP Committee
- •Subcapitated Entities Documentation
- •Additional DxSelect Reports
- •Insurance Coverages and Legal Review
- •Claim Forms and Applications
Detailed Financial Analysis
Based on the examiner’s assessment of risks and controls, detailed examination procedures are conducted in higher-risk areas. This phase involves deep-dive testing of reserves, investments, related-party transactions, and other key accounts. ARC supports your finance team in compiling supporting documentation and ensuring accuracy of responses.
Financial & Investment Review
- •Related Party/Intercompany Settlements
- •Related Party Contracts
- •AMS Management Fee Payment Reconciliation
- •Restricted Cash
- •Investment Compliance Checklist
- •Investments Committee Review
- •Investments Monitoring – Watchlist Memo
Accounting & Reporting Analysis
- •Budget to Actual Variances
- •General Ledger and Trial Balance Reports
- •Tax Sharing Approval Letter
- •Payroll Vendor SOC Reports
- •Claims Data Follow Up
- •Reinsurance Follow Up
- •Meeting with Actuaries
Findings & Closure
As the examination concludes, examiners document their findings and observations. ARC assists your organization in developing thoughtful, substantive responses to any examination observations and in coordinating remediation efforts to address identified control gaps or risks.
- •Exam Observations/Findings Responses
- •Remediation Plans
- •Status Updates & Follow-up Communication
- •Management Letter Review
- •Coordination of Corrective Actions
IT Examination Requests
Our IT systems and controls consulting services help ensure your technology infrastructure meets regulatory standards and supports your business objectives.
Policy Development & Vendor Management
- •Procurement Policy
- •Procurement Exception Form template
- •Vendor Management Policy
- •Vendor Inventory template
- •Vendor Security Due Diligence Questionnaire
- •Vendor Business Due Diligence Template
- •Vendor Due Diligence – IT template
- •Vendor Review Template
- •Vendor Offboarding Checklist
- •Vendor SOC 1 review
- •Mobile Code Usage Policy
- •End User Computing Policy
- •End User Computing Inventory template
- •Data Encryption Policy
- •Data Retention Policy
Internal Testing of IT Controls
- •Internal testing of IT controls
Enterprise Risk Management (ERM)
State regulators increasingly expect insurance companies to demonstrate a mature Enterprise Risk Management framework. ARC supports the development and documentation of ERM processes that meet regulatory expectations while supporting your organization’s strategic objectives.
Documentation Review
Comprehensive review of existing ERM related documentation and risk management policies to assess current state and identify gaps.
Risk Discussions
Facilitated discussions on various risk management approaches and strategies to align organizational thinking and establish priorities.
Future-State Planning
Development and finalization of a comprehensive future-state ERM framework that meets regulatory expectations and supports business objectives.
Why Choose ARC Strategic Services
We bring a unique combination of examination expertise, regulatory knowledge, and practical industry experience. Our consultants are former examiners and insurance industry professionals who understand both sides of the examination process. Unlike generalist consultants, we specialize in insurance regulatory compliance and have managed hundreds of examination requests for insurance companies.
We work as an extension of your team, not as external advisors. We take ownership of examination deadlines, quality standards, and your relationship with regulators. Our goal is to make the examination process smoother, faster, and less disruptive to your organization.
Ready to Get Started?
Whether you’re preparing for your first examination or seeking to enhance your existing processes, ARC Strategic Services is here to support you. Contact us for a confidential discussion about your examination preparation needs.
Testimonials
Our clients' thoughts
ARC Strategic Services has been an invaluable partner in supporting our statutory reporting and regulatory compliance efforts. Their team brings a high level of expertise in NAIC reporting, and their work on our Risk-Based Capital analysis and financial schedules has strengthened both our reporting accuracy and internal processes. They are responsive, detail-oriented, and consistently deliver high-quality work. Just as important, they work collaboratively with our team and feel like a true extension of our organization.
Lisa M.
Our company is looking to move forward and improve our Annual Statement filing accounting and preparation methods. After meeting with the team from ARC Strategic Services, we confidently feel that we are on the right path to making those improvements. They are very knowledgeable about the insurance industry as well as what is expected of us for reporting compliance. We are excited to work with them and look forward to seeing great results! I can’t say enough about how easy they are to talk with and it was a true pleasure to meet with such a great team.
Bonnie Bishop
We are thrilled to be partnering with the ARC team! We initially brought them on board to help with our NAIC statutory filings. The experience of this team was instrumental in helping us enhance our Notes as well as several schedules, including Schedules D and E. They helped with process improvement for data coordination for the Notes and Schedules. This will ensure efficiency, accuracy and completeness well into the future. The team’s deep expertise beyond basic accounting and statutory reporting allows them to effectively assist with inquiries from the regulators. They help relieve the statutory and regulatory burden, allowing me to focus on other strategic areas of the business. I would highly recommend ARC Strategic Services.
Colleen Handy
ARC Strategic Services has made a meaningful impact on how we approach financial reporting and regulatory compliance. Their team took the time to understand our processes and quickly identified opportunities to improve efficiency, including automating key reporting functions and refining our consolidated financial statements. What stands out most is their ability to combine deep insurance accounting expertise with practical solutions that actually work in a day-to-day environment. We now have stronger processes, better data visibility, and more confidence in our reporting.
Mark S.
ARC’s support has been invaluable, especially during regulatory exams. Their expertise in system implementation and compliance has positioned us for long-term success. They understood our challenges from day one and provided comprehensive solutions that modernized our operations. The implementation of new accounting systems was seamless, and their ongoing filing support ensures we’re always compliant. ARC has become an essential partner in our success
Matthew J.
The ARC team was a wonderful find for AllCare Health and the perfect fit for our team and our needs. Their depth of knowledge and experience in insurance accounting and regulatory compliance is unmatched and we are so happy to be partnering with them. We initially brought them in to assist with regulatory compliance and various forms completion. We quickly realized the depth of their knowledge and have expanded their work to include readiness for our examination as well as a policy and procedures review and enhancement. Our mission includes leading the way to better healthcare for Oregon and its people. A part of meeting that mission is assurance that we continue to maintain excellent processes to propel us into the future and effectively support our members. The ARC team has so much knowledge and experience to bring to that effort. They are relieving the statutory and regulatory burden, allowing our team to focus on other high impact areas of the organization. I would highly recommend ARC Strategic Services.
Matthew Woodin
Partnering with the ARC team has been an excellent decision! I met the team at a conference and knew immediately they had the knowledge and professionalism we were looking for to help with a variety of needs, starting with our statutory filings. Q1 filing was completed early, which removed the stress of meeting the deadline. This team has such deep insurance regulatory expertise, I can feel confident that the filings are done accurately and in full compliance with the NAIC.
Brian has also made recommendations and helped by improving the process for our cash reconciliations and mapping data over to the statutory statement. I recently requested they help with another process improvement project that I anticipate will save us considerable time on a monthly basis. I cannot recommend ARC Strategic Services enough. They are a great team to work with!
Michael Eldridge
At Investors Preferred, we understand that a solid ERM framework can increase risk-related focus across all functions of our business. We wanted a partner with an established ERM track record, and we were impressed with ARC's robust experience working with insurance firms like ours. We were confident the ARC's team would be able to appreciate the complex regulatory environment we face.
Nikki Pethtel
We have been partnering with the ARC team for over a year now and are thrilled with our decision to work with this team. We called on them to help with state insurance department filings, quarterly NAIC statutory filings, examination inquiries and other compliance requirements. We are so glad they are with us. This team is exceptional, and are collectively one of the most pleasant groups to work with. They are patient, professional and extremely knowledgeable. In addition to all the regulatory support, they recommended and supported the implementation of two systems to aid in process improvement and to streamline our compliance. I look forward to a long partnership with the ARC team.
Peter R.
I had great experiences collaborating with ARC Strategic Services while I was a Senior Manager at MCM CPAs & Advisors LLP. When I took the role of Director of Finance & Accounting with KY AGC/SIF, I knew I could use their unique and tailored experiences for our large transition accounting & system needs. The ARC team has valued expertise ranging anywhere from project management, systems implementation, regulatory compliance, and CFO services. With ARC on our side, I know the Fund is setting itself up for future success and growth.