Exam Liaison – ARC Strategic Services

Streamline Your Regulatory Insurance Examinations/Audits with ARC Strategic Services: Your Trusted Partner

At ARC Strategic Services, our team is made up of experts with extensive experience spanning both industry and regulatory domains. With an in-depth understanding of the state insurance examination/audit process, we serve as your trusted partners in ensuring a seamless and successful examination experience.

We are your liaison for a successful examination/audit.

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. We provide comprehensive support to ensure your organization is thoroughly prepared for a successful examination outcome, guiding you through every step of the process with confidence.

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 phase 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 misstatements. 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.

Whether you’re preparing for your first examination or seeking to enhance your existing processes, our experts are here to support you. We offer:

✅ Comprehensive Risk Assessments: Identifying potential vulnerabilities and developing strategies for mitigation.

✅ Proactive Compliance Measures: Ensuring adherence to regulatory requirements and industry best practices.

✅ Tailored Guidance: Customized solutions to address your organization’s unique challenges and objectives.

✅ Expert Representation: Advocating on your behalf during the examination process, fostering transparency and clarity.

Don’t navigate the examination process alone. Partner with ARC Strategic Services for the expertise and support you need to thrive in today’s dynamic regulatory environment. Together, we’ll ensure your organization emerges from the examination process stronger and more resilient than ever before.

How We Can Help

Requests from examiners during a state insurance examination can be voluminous and complex. The regulator requests inundating your Finance, Compliance, and IT staff can feel like a second full-time job requiring high-level expertise for timely and accurate response. 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

Phase 1 Requests:
- Examination Planning Questionnaire (Exhibit B)
- MLR Network Adequacy
- Board of Governors Listing
- Board and Committee Minutes
- Auditor Workpaper Access
- C-Level Interview Schedule
- Initial Examination Request and Supporting Documentation
- Unclaimed Property
- Actuarial Reports
- NAIC Biographical Information
- Actuarial Information
- Custodial Agreements
- Paid Claims Data
- Claim Check Register
- Insurance Coverages and Legal
- Tax Sharing Approval Letter
- Meeting with Actuaries
- Reinsurance Follow up
- Investment Accounts Information
- Custodial Agreement Follow up
- Flux Analysis
- Annual Statement Notes
- Actuary Interview Deliverables
- Form B filing
- Payroll vendor SOC Reports
- Claims data follow up
- Actuarial information follow up
- Articles and Amendments
- Board Members Conflict Interest Statements
- Review of External Audit workpapers
- Insurance Coverages Follow Up
- Bylaw review and gap analysis
- Filing of Form D
- Annual Statement Notes
- Contingent Liabilities
- Noncompliance Audit Charter
- Conflict of Interest statements review
- Code of Conduct Acknowledgement
- Whistleblower Policy Testing
- Claim forms and applications
- Review of CPA Engagement Letter
Phase 3 Requests:
- Controls Mitigation Strategies
  - Reinsurance
  - Reserves
  - Related Parties
  - Other Assets and Liabilities
  - Prospective Risks
  - Capital & Surplus
  - Premium
  - Claims Handling
  - Investment
- IT Control Documentation
- Questions for Appointed Actuary
- Cash Reconciliations
- Job Descriptions
- Five Year Proforma
- Subsequent Events
- Claims Completeness Testing
- Claims Testing
- Controls Supporting Documentation
  - Reinsurance
  - Other Assets and Liabilities
  - Reserves
  - Capital & Surplus
  - Investments
  - Related Party
  - Premiums
  - Claims
  - Additional Reinsurance
  - Additional Premium
  - Prospective Risk
  - Additional Investment
  - Additional Claims
- Reinsurance Contract Review Checklist
- Investments Compliance Checklist
- Flux Analysis
- Lag Table Cell Paid Data Support
- Journal Entries Support
- Key Bank Account Authorization
- IT Control
  - Vendor Management
  - Finalize Data Classification
  - Implement Independent
- Prospective Risk BCP Committee
- Additional DxSelect Reports
- Subcapitated Entities Documentation
Phase 5 Requests:
- Related Party/Intercompany Settlements
- Related Party Contracts
- AMS Management Fee Payment Reconciliation
- Restricted Cash
- Investment Compliance Checklist
- Investments – Committee Review
- Investments Monitoring – Watchlist Memo
- Budget to Actual Variances
- General Ledger and Trial Balance Reports
Phase 7 Requests:
- Exam Observations/Findings Responses

IT Examination Requests

Addressed potential control gaps via development of, or changes to, policies and procedures
- Procurement
  - Procurement Policy
  - Procurement Exception Form template
- Vendor Management
  - Vendor Management Policy
  - Vendor Inventory template
  - Vendor Security Due Diligence Questionnaire
  - Vendor Business Due Diligence Business Template and Questionnaire
  - Vendor Due Diligence – IT template
  - Vendor Review Template
  - Vendor Offboarding Checklist
- Vendor SOC 1 review
- Mobile Code Usage Policy
- End User Computing / User Developed Applications
  - End User Computing Policy
  - End User Computing Inventory template
- Data Encryption Policy
- Data Retention Policy
Internal testing of IT controls

Enterprise Risk Management (ERM)

Reviewed existing ERM related documentation
Held discussions on various risk management approaches
Prepared and finalized future state ERM