Financial Examinations New Procedures and Expectations

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Financial Examinations New Procedures and
Expectations
Danny Saenz Financial Analysis and Examinations
Chief Financial Analysis and Examinations Financia
l Program 512/305-7258
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Topics of Discussion

• Overview of Financial Program
• Examinations
• Scheduling
• Coordination with Other States
• Texas Policy and Procedures Manual
• Examination Tools
• Risk Assessment Examinations
• Questions

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Overview of Financial Program
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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 procedures to prevent solvency and
  consumer problems
• Priorities focus on firm, fair, effective, and
  efficient regulation for all insurance entities,
  while reducing impediments to competition

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Overview of Financial Program continued
Cradle to Grave Approach

• Company Licensing Registration
• Financial Analysis Examinations
• Actuarial
• Rehabilitation (Conservation)
• Receivership/Liquidation

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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

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Examinations continued
Key Processes continued

• Target Examinations as needed in response to
  potential regulatory concerns
• Other entities subject to examination include
• Guaranty Fund Associations
• Premium Finance Co.'s
• Reinsurance Intermediaries
• Managing General Agents

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Examinations continued
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Scheduling Exams
Examinations are conducted every 3 5 years
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Coordination with Other States
Lead State
Allocation of work-load Clear understanding
regarding each states role and needs Sharing
of work papers and findings
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Texas Policy and Procedures Manual
Procedures and regulations unique to Texas
Texas statutes take precedence
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Examination tools
ACL

• Data inquiry and analysis of electronic files of
  insurance companies

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Examination tools continued
TeamMate
Enhance regulatory insurance financial and
market conduct examination and analysis processes
A central repository of standard examination
and analysis procedures and common exceptions
Files can be shared and be seamlessly accessed
either at TDI headquarters or in the field
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Risk Assessment Examinations
Advantages

• 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

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Questions