Insurance Regulation: The Insurance Regulatory Information System Needs Improvement
GGD-91-20
Published: Nov 21, 1990. Publicly Released: Nov 21, 1990.
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Highlights
Pursuant to a congressional request, GAO reviewed the effectiveness and reliability of the National Association of Insurance Commissioners' (NAIC) Insurance Regulatory Information System (IRIS) for early detection and warning of financially troubled property and casualty insurers.
Recommendations
Recommendations for Executive Action
| Agency Affected Sort descending | Recommendation | Status |
|---|---|---|
| Other | NAIC should take the lead in working with state regulators, the insurance industry, and professional actuarial organizations to explore options and identify the most appropriate way to obtain annual independent certification of loss reserves. |
Closed – Implemented
NAIC believes its actuarial certification requirements, put in place as of December 31, 1990, contain sufficient restrictions to make certain that these loss reserve certifications are independent, even though such certifications may still be done by company employees.
|
| Other | NAIC should evaluate, on a test basis, the feasibility, effectiveness, and costs of expanding IRIS to incorporate other information on the condition, operations, and management of insurance companies, with the goal of improving IRIS usefulness. |
Closed – Implemented
In 1990, NAIC developed a new computer-based financial analysis system to identify potentially troubled companies that require state action. The Solvency Surveillance Analysis System appears to address the use of additional sources of information on the condition, operations, and management of insurance companies. IRIS continues to be the primary element of the NAIC early warning system.
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Topics
Bank failuresBudgetary reservesFinancial managementFinancial recordsInsurance companiesInsurance lossesInsurance regulationManagement information systemsState programsWarning systems