Download - Welcome !
![Page 1: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/1.jpg)
Welcome!
Residual Market Audit Services
NJ AIRE
Compliance Audit Program
Mark LoVuolo, AIS, API
Jack O’Keefe
![Page 2: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/2.jpg)
What is AIPSO?
![Page 3: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/3.jpg)
AIPSO is…
A management organization and service provider for the residual market with a home office in Johnston, RI
A non-profit organizationA national organization of about 400
employeesAn organization with 10 regional offices
located throughout the countryAn organization that uses a team management
approach
![Page 4: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/4.jpg)
AIPSO’s MissionAIPSO’s mission is to provide high quality services for the automobile insurance residual market at the lowest possible cost.
AIPSO will build on its successes as a leader in helping manage the automobile insurance residual market. We will continually rise to the challenge of being a national organization that serves local customer needs. We will remain flexible and will proactively meet the needs of our divergent customer groups at both national and state levels.
![Page 5: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/5.jpg)
1 – Certified Internal Auditor (CIA)
1 – CIA candidate
2 – Certified Property & Casualty Underwriters (CPCU)
2 – pursuing INS or CPCU designations
1 – 30+ years of Claims Experience
30 – Independent Consultants
14 Members of our RMAS staff‘
“Who is Residual Market Audit Services” (RMAS)
![Page 6: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/6.jpg)
Provide on-site audits of companies for automobile insurance market mechanisms.
What Does RMAS Do?
![Page 7: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/7.jpg)
Purpose of RMAS
To support Board of Directors (Governing Boards) in their management of Residual Market Automobile Programs
![Page 8: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/8.jpg)
Audits are a management tool to ensure companies are handling and reporting policies and claims in compliance with a mechanism’s plan of operations.
Purpose of Audits
![Page 9: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/9.jpg)
Objective of NJAIRE AuditsTo ensure that companies are submitting complete and accurate data to the NJAIRE.
Operational – Company’s internal controls are effective in processing and identifying NJAIRE business.
Compliance - Data reported meets specifications in the Plan of Operations.
![Page 10: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/10.jpg)
Audit Process
Stage 1: Planning
a. Company Selection
b. Communication with ISO
1. Call Forms
2. Statement of Compliance
3. Concerns with Companies
![Page 11: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/11.jpg)
Audit Process
Stage 1: Planning (con’t) c. Engagement Letter – Includes
request for data
1. All private passenger BI claims
2. All reportable claims
3. All other claims
d. Company contact information received
![Page 12: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/12.jpg)
Audit Process
Stage 1: Planning (con’t)
e. Receipt of company data
f. Verification of data to call forms
g. Complete sample selections
h. Confirmation Letter
![Page 13: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/13.jpg)
Audit Process
Stage 2: Fieldwork
a. Opening meeting
b. Obtain internal procedures for reviewing data submissions
c. File review• Determination Forms
![Page 14: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/14.jpg)
![Page 15: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/15.jpg)
![Page 16: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/16.jpg)
Audit Process
Stage 2: Fieldwork
c. File review (con’t)• Workpapers
![Page 17: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/17.jpg)
![Page 18: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/18.jpg)
Audit Process
Stage 2: Fieldwork
d. Fieldwork summary
e. Closing meeting
![Page 19: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/19.jpg)
Audit Process
Stage 3: Reporting
1. Draft Report
2. Company’s Response
3. Final Report
![Page 20: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/20.jpg)
2003 - 2005 Audits (32 Companies Reviewed)
Reportable Claims
Total files reviewed – 1,749
Number of Claimants Over Reported – 323 or 18.5%
Dollar Amount Over Reported - $4,627,210
![Page 21: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/21.jpg)
2003 - 2005 Audits
Reasons for Over Reporting: Claimant or Insured Incorrect Threshold
Unverified Claimant Threshold
These two reasons account for 52% of reporting errors
![Page 22: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/22.jpg)
Additional Reasons for Over Reporting
Economic Loss Payment Included Claimant had pierced the threshold Claimant was not a NJ Resident Claim Occurred outside of NJ Expense Payments Included in Reporting Insured Vehicle was Commercial
![Page 23: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/23.jpg)
Reporting Errors
Incorrect Territory Codes Settlement Reported in an Incorrect Quarter or
Year Over Reporting of the Dollar Amount
![Page 24: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/24.jpg)
2003 – 2005 Audits(32 Companies Reviewed)
All Bodily Injury Claims:
Total files reviewed – 2,562
Number of Claimants Under Reported – 107 or 4%
Dollar Amount Under Reported - $958,012
![Page 25: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/25.jpg)
Reasons for Under Reporting
Claimant had a Zero Dollar Threshold Insured had a Verbal Threshold Unverified Claimant Threshold
![Page 26: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/26.jpg)
Reporting Errors
Non Bodily Injury Paid Claims Bodily Injury Claims with No Payment Incorrect Territory Codes File not Settled in Reporting Year Settlement reported in Incorrect Quarter Incorrect Insured Threshold Commercial Bodily Injury Claims Paid
![Page 27: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/27.jpg)
TIPS
Plant your corn early “Easy Sleazy” in the third race at Monmouth Park Don’t say “Hi Jack” if you see me at the airport
![Page 28: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/28.jpg)
NJAIRE Claim Handling TIPS
Claims handlers should be familiar with the NJAIRE procedure manual – NJAIRE.org
Know the requirements for verification of the claimant’s threshold (Pgs 29 –30 of the procedure manual)
Use the NJAIRE recommended Claim Determination Form
Check the final determination after claim is settled and before it is submitted to IT
![Page 29: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/29.jpg)
QUESTIONS?
What? Huh? ?
What does it all mean?
?
![Page 30: Welcome !](https://reader036.vdocuments.net/reader036/viewer/2022062517/56813b95550346895da4c82a/html5/thumbnails/30.jpg)
Thank you!
Residual Market Audit Services
NJAIRE
Compliance Audit Program
Mark LoVuolo, AIS, API
Jack O’Keefe