By A. Kenneth Levine
New Appleman Premium Online Checklists offer a comprehensive set of checklists, essential for compliance with the technical and often varying statutes and rules which regulate the business of insurance. Some 140 independent outlines and commentaries make for a diligent understanding of the changing regulatory landscape, which can make the difference between compliance and violation.
Clear, concise, and practical presentation of the application and administration of the laws governing licensure, solvency, forms, rates, and financial distress, to name a few, are broken down by kind of insurance. Each checklist includes helpful references to operative statutes, agency rules, NAIC model act provisions, and a variety of other source material.
With great foresight, these checklists also include expert commentary for current regulatory context, culminating in an essential guide for practitioners, insurers and insurance representatives, regulatory agencies, and other others with an interest in complying with the highly-technical and subtle elements of regulatory compliance. These commentaries make for eminently readable and accessible text that skillfully addresses the issues indispensable to a successful insurance regulatory practice. Deftly weaving descriptions of the insurance system's theoretical underpinnings with pointed practical advice, the New Appleman series further achieves what few authoritative materials of this type have: a pitch that can be heard and appreciated by the insurance expert and novice alike. This invaluable resource has earned a place in the toolbox of all who engage in this precise area of the law.
For example, complying with financial reporting requirements for insurance company licensing is a very important issue in the regulatory area. This product features a checklist on the subject with expert analysis and relevant cites to applicable statutes and treatise materials. The expert analysis for this checklist includes helpful hints such as "Certificated insurers accept and manage risk in accordance with regulated financial prudence. However, the financial condition of an insurer may be affected by various factors outside of the underwriting operations of the insurer. An insurer's financial condition may affected by credit-quality deterioration, product risk, and expenses. For example, subprime mortgage positions and real estate investments, as well as depressed sales growth of a somewhat discretionary product in a down economy, will adversely affect the insurer's overall financial outlook. In such conditions, insurers must diligently analyze long-term interest rates and corporate bond spreads, bond ratings, investment losses, risk-based capital, and the pricing of the company's products. Product pricing is particularly important concerning products for which consumers dramatically respond to changes in price. These products have the potential to impair earnings and returns on equity and drain capital over the long-term."
- The checklist itself includes discrete tasks such as:
- Establish audit committee to oversee financial reporting, as required by state statute.
- Determine state criteria for independence of members of insurer's audit committee.
- Identify that members of audit committee are typically members of insurance company's board.
- Submit information about audit committee members to state insurance official prior to preparation and filing of financial report, if required.
- Consider that audit committee will be responsible for appointment, compensation, and oversight of work of any accountant selected to prepare financial reports.
Authority:
See NAIC Model Laws, Regulations and Guidelines 205-1, § 14.
- Hire qualified accountant to prepare financial report.
- Determine if accountant is in good standing with AICPA and in all states in which accountant is licensed.
- Instruct accountant to either directly or indirectly enter into agreement of indemnity or release from liability with respect to audit of insurer.
- Do not allow accountant to function in role of management, audit his or her own work, or serve in advocacy role for insurer.
- Notify state insurance official of retained accountant within statutory time frame prior to filing of financial report, if required by state.
Authority:
See Cal. Ins. Code § 900.2; NAIC Model Laws, Regulations and Guidelines 205-1, §§ 6, 7.
Cross References:
California Insurance Law & Practice § 4.20.
Access New Appleman Premium Online Checklists on Lexis.com.
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A. Kenneth Levine manages the Tallahassee, Florida, office and regulated industries practice group of Dunlap Shipman, P.A. For two decades, he has provided substantive insurance regulatory representation for governmental and business clients, in such matters as licensing, mergers and acquisitions, market conduct and financial examinations, rate and form filings, reinsurance concerns, accounting issues, coverage litigation, insolvency proceedings, holding company formation, and administrative litigation. Mr. Levine has published numerous works and spoken on virtually every aspect of insurance and warranty regulation. He has been awarded top national rankings and ratings for his counsel, by Chambers and Partners, Martindale-Hubbell, and A.M. Best.
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