Services Inspection of Records

Managing general Agents Audits

Many states have adopted the NAIC Model Act, requiring companies to perform a financial review at least annually. The requirements are comprehensive, setting standards in areas such as operations, management, underwriting and claims handling. Insurers delegating underwriting authority to Managing General Agents (MGAs) without having the infrastructure in place to monitor compliance by the MGA cannot effectively control this business. Chiltington has developed an auditing team consisting of underwriting, claim, and accounting personnel well-versed in the intricacies of business written through MGAs.  Our experienced staff has not only been involved in the auditing of existing business but also has the ability to make recommendations by evaluating systems, procedures, staffing, etc., prior to a company signing with an MGA by performing pre-signing audits. If your company has a program already in place, Chiltington staff can provide assistance to ensure compliance to the requirements of the Model Act and to contractual terms and conditions set forth in the agreement. We develop a plan and budget specifically for each client based on their needs. Some of the more common elements in a plan would be as follows:

Pre-Audit

• Financial Statement Review and Analysis;
• Analyze key points of the MGA Agreement;
• Discuss insurer concerns, if any.

On Site

• Interview key MGA personnel to learn about the MGAs general organization and audit approach;
• Analyze samples of policies and claims to determine whether they are in accordance with contract terms;
• Review MGA software systems;
• Review office procedures and staffing.

Post Audit

• Prompt report preparation
• Post audit discussion with insurer over findings
• Post audit letter preparation