Market Conduct Exams and Preventative Audits


Chad Walker

Bose McKinney & Evans attorneys represent insurance regulators in market conduct exams, whether conducted by a single state or by a multi-state consortium. The attorneys work alongside the regulators to collect data and to interview insurance company representatives to determine if the insurer has followed laws related to the distribution, pricing and sale of insurance products.  Ultimately, the outcome of the examination determines the authority of the insurance company to continue to conduct business in the state or states.  Given the high stakes of such examinations, our attorneys are adept at carefully researching, sorting and analyzing large amounts of data through a systematic, steadfast process to help the regulators arrive at conclusive results in compliance with NAIC standards.

The firm’s extensive background in market conduct exams can benefit insurers as there are several steps insurance companies can take in monitoring their own practices and correcting issues before escalating to the attention of regulators.  Through the mock audit process, insurers may realize that their current practices may possibly have them on the radar of regulatory agencies.  Our attorneys routinely lead mock conduct exams, coordinate internal audits and conduct third party vendor audits.  These services can include conducting mock meetings with company representatives, reviewing policies and procedures, issuing interrogatories, requesting data, performing desk audits, leading target examinations and limited scope examinations, and performing full onsite exams. Each is led with the same vigor as a real examination in an effort to identify areas of concern and explain the data and analysis driving those concerns.  The attorneys provide advice on ways to improve and on-going practices to implement.  And should a real examination commence, our experience shows that the efforts during the preventative exams have the potential to make the real process smoother.

Whether representing state regulators, insurers in preventative audits or companies undergoing an examination, the goal is to safeguard insurance benefits that are legal and fair to consumers.