In this article, we continue our discussion about fronting arrangements. In our previous post, we focused on the relationship between fronting and fronted carriers, including the benefits of this type of relationship, the risks associated with it, and the governing regulations. However, fronting might include more than just these two parties. Another party that might be motivated to enter into a fronting arrangement is a managing general agent or MGA.
The use of Treasury Inflation-Protected Securities (TIPS) has become increasingly popular among insurance companies in recent years. TIPS are a special kind of security issued by the United States Treasury Department. In an inflationary economy, investors are weary to invest and loose principal par value on a long-term investment. TIPS provide protection for those who have such fears.
California, along with other western states, has endured extensive wildfire destruction to properties ranging from smoke damage to constructive total losses. The Golden State’s residents have often dealt with wildfire issues due to dry weather in winter months creating fuel for fires in summer and fall months, but now fires have become pandemic year-round. In late 2017, the “Northern California Firestorm,” specifically in Sonoma County…
If an insurance or reinsurance contract does not transfer risk, it falls under the principle of deposit accounting. Under this principle premium is not recorded as income and is instead listed as an asset, which has a direct impact on the company’s leverage. In order to insure that reinsurance is applied towards surplus relief, it is important to examine the contract to see if both timing and underwriting risk have been transferred.
While the rollout of New York’s cybersecurity regulations is well underway, September 4, 2018, marked the eighteen-month transitional deadline, and now all sections of part 500 of the regulation are effective. The timeline for compliance with the New York regulation is based on the following schedule:
Following ten years of off-and-on deliberations, the Financial Accounting Standards Board (FASB or the Board) has issued a final promulgation in the accounting for long-duration insurance contracts. The promulgation is effective for calendar-year public companies in 2021 and non-public entities in 2022.
What is the mark of a good peer review? Is it delivering a “Pass” without exceptions? Is it guaranteeing a conflict-free process for the firm? When we review fellow insurance CPA firms, neither of these play into our metrics for success. Rather, our goal is to help our colleagues resolve struggles they’re experiencing so they can perform higher-quality audits. And we take great pride in finding these solutions.
On June 21st, the U.S. Supreme Court reversed the long-standing Quill v. North Dakota ruling when it stated that physical presence is no longer a requirement for states to assess sales taxes. In this landmark court case, South Dakota v. Wayfair, the State argued that the physical presence requirement was creating “unfair and unjust” market conditions favoring…
As insurers, you understand just how difficult it can be to keep up with everything that’s changing in the industry. In 2018, technology is playing an even bigger role than before; reinsurance rates are rising thanks to the natural disasters that plagued our country last year, and cyber insurance is something we are all trying to wrap our heads around.
Fraud is an unwelcome reality of doing business for every company regardless of size. Losses due to employee theft, vendor deception and other illegal behaviors not only harm the company but have an impact on the product pricing. While fraud is an issue for every industry, insurance companies are in the unique position of having to manage fraud threats not only from employees and vendors but also customers.