630 likes | 872 Views
Automated Financial Analysis Solvency Tools. David A. Vacca, CPA Assistant Director Insurance Analysis & Information Services Department For Regulators Only. Presentation Overview. Overview of Financial Analysis Solvency Tools Databases Serving Other Purposes. NAIC Databases.
E N D
Automated Financial Analysis Solvency Tools David A. Vacca, CPA Assistant Director Insurance Analysis & Information Services Department For Regulators Only
Presentation Overview • Overview of Financial Analysis Solvency Tools • Databases Serving Other Purposes For Regulators Only
NAIC Databases • Financial Data Repository (FDR) • Exam Tracking System (Financial and Market) • Complaints • Special Activities • Producer database • Change of Control (Form A) • Regulator Actions • Valuation of Securities Confidential - Regulator Only
Financial Analysis Solvency Tools • Collection of automated solvency tools designed to provide an integrated approach to screening and analyzing the financial condition of insurers • Financial Analysis Solvency Tools (FAST) • Navigation Tools • Notification Tools • Analytical Tools • Prioritization Tools • Adhoc Reporting For Regulators Only
Tools and Resources NAIC I-SITE & StateNet Prioritization Tools Analytical Tools Summary Reports Databases
Navigation Tools For Regulators Only
Number of Insurers Filing to the NAIC For Regulators Only
Electronic Filing - PDFs Confidential - Regulator Only
Pick-A-Page • Selection and print capabilities of any financial or demographic information that comes from the annual/quarterly statements filed by insurance companies with the NAIC Confidential - Regulator Only
Pick-A-Page Confidential - Regulator Only
Line Reports • Allow users to compare one line from the annual statement with a group of companies matching the selected criteria (w/ statement type) Confidential - Regulator Only
Company Demographics Confidential - Regulator Only
Validation Exceptions Confidential - Regulator Only
Notification Tools Confidential - Regulator Only
Personalized Information Capture System (PICS) • Push technology • Create profile • Specify criteria • E-mails generated when data changes for companies/individuals that fit into the criteria specified Confidential - Regulator Only
Email Notification Tools Confidential - Regulator Only
PICS notifications go directly to your mail inbox Confidential - Regulator Only
Analytical Tools For Regulators Only
NAIC Financial Analysis Handbook • Provides a uniform means for insurance departments to more diligently identify companies experiencing financial problems or that pose the greatest potential for developing financial problems • Provides guidance for the insurance departments to define and evaluate particular areas of concern in troubled companies • Updated annually Confidential – Regulator Only
Financial Analysis Handbook Summary Report For Regulators Only
Financial Profile Reports • The Financial Profile Report is a summary of key financial information for a company over the last five years • Includes a Financial Summary page • There are also detailed sections for: Assets, Liabilities, Capital & Surplus, Loss & LAE Reserve Analysis, Income Statement, Cash Flow and Exhibit of Business and Profitability
Trend and Ratio Analysis by Insurer For Regulators Only
Automated Graphs by Insurer For Regulators Only
Profile: Peer Analysis Report • Release for Annual 2007 – Life/Health • Released for Annual 2009 – Property/Casualty • Profile defines 10 peer companies based on: • Line of Business • Number of States Writing Business • Geographic considerations • Closest Asset or Premium Size • Profile provides financial data and ratio analysis for 10 peer companies
P&C Peer Analysis Profile For Regulators Only
Loss Reserve Projection For Regulators Only
Exam Jumpstart • Analyzes the investment schedules data as compared to SVO VOS database or NRSRO feeds and provides summary of potential errors • CUSIPs • Rates • Designations / market value • Assumed and Ceded Reinsurance
Prioritization Tools For Regulators Only
IRIS Ratio • 13 ratios for Property/Casualty • Overall • Profitability • Liquidity • Reserve • 12 ratios for Life and Health • 11 ratios for Fraternal • Asterisks highlight ratios outside usual range
IRIS Ratios Ratio Analysis • Evaluate the ratio results by analyzing each component of the calculation • Understand the industry average in relation to the company’s result • Understand the company’s historical results and put them in context
Gross Prem. Written/Surplus Net Prem. Written/Surplus Chg. in Net Writings Surplus Aid/Surplus Two-Year Overall Operating Ratio Investment Yield Gross Chg. in Surplus Net Chg. in Surplus Liabilities to Liquid Assets Gross Agents’ Balances/Surplus One-Year Reserve Development/Surplus Two-Year Reserve Development/Surplus Estimated Current Reserve Deficiency/Surplus IRIS Ratios (P&C)
Net Change in C&S Gross Change in C&S Net Income to Total Income Adequacy of Investment Income Non-Admitted to Admitted Assets Total Real Estate & Mortgages to Cash & Invested Assets Total Affiliated Investments to C&S Surplus Relief Change in Premiums Change in Product Mix Change in Asset Risk Change in Reserving Ratio IRIS Ratios (L&H)
IRIS Ratios For Regulators Only
Prioritizations Tools- IRIS (Only public tool) Confidential – Regulator Only
Analyst Team System (ATS) • Available for P&C, Life, Health and Fraternal • Automated review system that uses statistical analysis, FAST Scores, RBC to assign review levels • Level A – High level of concern • Level B – Requires attention • No level required • Confirmed by team of State financial analysts and examiners • ATS Reports • Analyst Team Comments and Summary of Criteria
Adhoc Summary Tools For Regulators Only