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In an era of cost cutting and economic uncertainty, internal audit needs to be a valuable contributor to its organization. It's not enough for auditors to just say they are [...]

The National Association of Insurance Commissioners' model audit rule of 2010, which requires all insurers to rotate their audit partner every five years, will be affecting more and more audit [...]

One of the strongest legal weapons available to audit firms sued by shareholders or creditors following revelations of corporate fraud is the defense of in pari delicto, This legal doctrine, [...]

The auditing profession has seen tremendous change over the last 10 years. The Big Five have become the Big Four, the profession is now externally regulated, specific consulting services can [...]

Methods are suggested for assessing the financial performance of a life and health insurance company. The proposed methods can be used to scrutinize income statement, cash flow and balance sheet data.

The cycle of operations of life and health insurance industry are described. An overview of profitability, accounting methods and product management of the industry is also presented.

A glimpse into the operations of the life insurance industry is presented. The ownership structures, accounting methods, assets, and products of the industry are discussed in this context.

A brief glimpse into the way life insurance industry operates is presented. The nature of assets, accounting methods, products and distribution channel specific to the life insurance industry are described and the regulations applicable to the industry are discussed.

Detailed information on Financial Reporting Standard draft as on 21 July 2004 with an aim to require appropriate measurement of, and disclosures relating to liabilities and assets of life assurance business, and disclosures relating to the financial strength of entities carrying on life assurance business is presented.

A study showing that insurance companies manipulate the loss reserves to confirm to regulatory ratios or IRIS ratios is furnished. Regulators use IRIS ratios to assess the solvency of the insurance firms.

Accounting and auditing have come under intense scrutiny. Investors and analysts in particular puzzle over the reliability, completeness, and trustworthiness of financial data in annual reports, despite their certification by [...]

The Basle Committee on Banking Supervision has mandated capital reserves for institutional investors at three times the 99% value-at-risk (VaR) of the portfolio over a holding period of 10 trading [...]

Skandia AB has developed intellectual capital supplements for the internal and external communications. The supplements are in the form of both numbers and text.

The case of Australia's HIH Insurance Ltd. having a large financial shortfall illustrates the principle that no amount of government oversight can take the place of corporate responsibility in financial matters. It is recommended that corporate social responsibility be incorporated into the risk management procedures of modern corporate governance.

This study examines whether the reported loss reserves of property-casualty insurers contain an implicit discount for the time value of money. Reporting the present value of loss reserves enables insurers to justify the competitive level of insurance premiums to regulators. The evidence indicates that there is a positive and significant discount rate implicit in the relation between reported loss reserves and expected future claim payments. Moreover, insurers subject to relatively stringent rate regulation discount to a greater extent than do other insurers. The results also suggest that implicit discounting is distinct from solvency and tax motives to exercise discretion over the loss reserve.

Insurance companies often are faced with processing diverse types of claims and related documents. Activity-based costing (ABC) differs from traditional approaches to costing by recognizing that the claims process is a collection of related activities that differ in terms of cost, capacity, and cost driver. Further, ABC recognizes that each type of claim makes diverse demands on the activities that are part of the process. A related benefit of ABC is that it reveals the extent to which each activity has unused capacity, given a specified number of claims processed. These features of ABC result in more accurate claims processing costs and a better understanding of the cost of unused capacity in the various activities in the process.

Significant changes have taken place in the insurance industry over recent years. Merger and acquisition deals in the industry reached a value of $8.8 billion in 1998, and many investment banks are now establishing a presence in insurance. A number of genuine pan-European insurance groups have emerged, and greater harmonization is anticipated. Some observers believe that this trend will lead to improved transparency of insurance company accounts, especially as shareholders place insurers under pressure to become more proactive and acquisitive.

The internal audit department of Aetna Life and Casualty initiated a reorganization effort with the goal of improving customer service, decreasing costs, and making the audit process more efficient. The internal team utilized various implements to simplify the audit process such as flow charts, new forms, and a three-phase audit method to streamline activity in the company. The combination of lesser paperwork and a better understanding of the work process by members successfully increased productivity by 25%, reduced staff size by 17%, and cut administrative costs by 14%.

The Seventh Circuit ruled that the recomputed differential earnings amount for mutual life insurance companies cannot be negative in Indianapolis Life Insurance Co. v. United States. The case involved a recomputed differential earnings rate of -1.7% that resulted in a dividends deduction that exceeded the actual dividends paid. The differential rate is used to lower the competitive advantage of mutual life insurance companies over stock life insurance companies. The Court's ruling is an accurate reflection of congressional intent since no one ever expected the rate to be negative.

The internal audit department at USF&G developed a one-page audit report to ease communication with its readers. In the past, reports featured lengthy narratives that detailed the audit findings, which required months to complete. An average report had 15 pages, while some even exceeded 30 pages. Realizing the value of brevity, the department came up with compact reports that discussed relevant issues, recommended solutions and did not require hours to read. The reports are divided into three parts: the One Page Audit Report, the Corrective Action Plan and the Special Project Report. The result is a more effective internal audit department, improved customer satisfaction and better communication with senior managers.

The internal audit department at Aetna Life and Casualty Co. was successfully reorganized to make it more responsive to customer needs. The first step toward culture change was the establishment of a vision for what the new internal audit department was going to be. Input from employees was solicited to foster team support. The department strove to develop partnerships with its customers by including them in the process through open communication. After the new vision was formalized and employee buy-in was assured, the department proceeded to improve its processes. An important facet of this change effort was the shift in the department's approach to human resources management. The result of the change initiative was improved customer relations, simplified audit process and new human resources management style. Costs were reduced and teamwork and team morale were improved.