The Specialized Regulatory Support team serves as a flexible, high-impact resource for insurance regulators, offering specialized expertise in complex and emerging areas of regulatory oversight. With a multidisciplinary team led by seasoned regulatory professionals, the team supports state insurance departments in fulfilling their statutory responsibilities with precision, efficiency, and technical rigor. 

Claims and Premium Audits for Catastrophe Funds

Conducting claims and premium audits on behalf of catastrophe funds is a critical function that ensures the financial integrity, operational transparency, and statutory compliance of these public risk financing mechanisms. Our team brings specialized expertise in auditing insurer-reported data and fund disbursements to validate accuracy, detect anomalies, and support regulatory accountability.

Claims Audit Services

Scope of Review:

• Verification of claims submitted for reimbursement against policy terms, loss documentation, and catastrophe event parameters.
• Evaluation of claims handling practices for timeliness, accuracy, and compliance with catastrophe fund guidelines and state statutes.

Audit Objectives:

• Identify overpayments, duplicate claims, or ineligible losses.
• Ensure consistency with fund-specific claims protocols and disaster response frameworks.
• Assess insurer compliance with reporting requirements and claims coding standards.

Tools & Techniques:

• Statistical sampling, forensic review, and data analytics to detect patterns of concern.
• Integration with catastrophe modeling outputs to validate loss reasonableness.

   

Premium Audit Services

Purpose:

• Confirm the accuracy of premium assessments and remittances made by participating insurers to the catastrophe fund.
• Validate exposure data (e.g., insured values, policy counts, geographic distribution) used in premium calculations.

Audit Focus Areas:

• Review of underwriting and rating data submitted to the fund.
• Reconciliation of reported premiums with insurer financial statements and policy systems.
• Evaluation of premium allocation methodologies and compliance with fund statutes or administrative rules.

   

Regulatory Alignment & Reporting

Compliance Assurance:

• Audits are conducted in accordance with applicable state laws, fund-specific regulations, and public finance standards.
• Findings are documented in regulator-ready reports with clear audit trails, issue summaries, and remediation recommendations.

Stakeholder Coordination:

• Collaborates with fund administrators, state insurance departments, and external auditors to ensure transparency and consistency in audit execution.

   

Premium Tax Auditing

• Regulatory Focus: Ensures insurers’ premium tax filings are accurate, complete, and compliant with state-specific tax codes and reporting requirements.
• Technical Capabilities: Includes reconciliation of reported premiums, validation of tax credits and deductions, and identification of underreporting or misclassification of premium types.

Forensic Accounting & Financial Investigations

Purpose: Supports regulators in uncovering financial misconduct, fraud, or misstatements within insurance entities.

Scope of Work:

• Tracing of financial transactions and fund flows.
• Analysis of intercompany transfers and related-party transactions.
• Identification of red flags and irregularities in financial reporting.

Attribute Testing & Operational Reviews

Objective: Evaluates insurer compliance with specific regulatory attributes, such as those outlined in NAIC accreditation standards or state-specific benchmarks.

Methodology: Includes control testing, process walkthroughs, and documentation reviews to assess adherence to regulatory expectations in areas such as claims handling, underwriting, and policy administration.

Focus Areas:

• Governance and internal controls.
• Process efficiency and regulatory alignment.
• Identification of operational risks and remediation opportunities.

   

Litigation Support for Regulatory Actions

Services Provided:

• Expert witness testimony in administrative hearings or court proceedings.
• Financial analysis and damage quantification to support enforcement actions.
• Preparation of exhibits, affidavits, and technical documentation for legal use.

   

Reinsurance Program Reviews

Regulatory Relevance: Assesses the structure, risk transfer effectiveness, and compliance of reinsurance arrangements with statutory and regulatory requirements.

Review Areas:

• Contract terms and counterparty risk.
• Recoverability of reinsurance assets.
• Adequacy of disclosures and financial statement treatment.

   

Regulatory Expertise & Credentials

• Leadership & Experience: Lead and supported by a team of professionals and experts with backgrounds in accounting, law, fraud, reinsurance, insurance regulation and a proven track record conducting audits for hurricane, and other state-managed catastrophe funds.
• Professional Standards: All engagements are conducted in accordance with applicable NAIC guidelines, state statutes, and industry best practices.
• Team Credentials: Insurance auditors, CPAs, CFEs, JDs, CFE(Fraud), CGFM, and catastrophe fund specialists with deep knowledge of public risk pools and residual markets.

The Specialized Regulatory Support team is a strategic extension of regulatory capacity, offering targeted expertise in high-risk, high-complexity areas of insurance oversight. Whether supporting litigation, auditing premium taxes, or evaluating reinsurance programs, the team enhances regulatory effectiveness and ensures that oversight efforts are both thorough and defensible. 

Our claims and premium audit services provide catastrophe funds with the assurance that disbursements and assessments are accurate, justified, and compliant with governing statutes. These audits strengthen public trust, enhance financial stewardship, and support the long-term sustainability of catastrophe risk financing programs.

Team Leadership

Bradley R. Hazelwood, CPA, CFE, MCM
Director

Tim Kelley, JD, CIE, MCM, AIRC
Senior Manager