All audit functions are centralized within CAR's Compliance Audit Department.
The Compliance Audit Department performs periodic audits including statistical premium
and claim reviews, underwriting premium audits, claim performance standards reviews, and
SIU audits. The program objective is to test the quality of reported member company
statistical data for both private passenger and commercial business in our role as the
Statistical Agent for the Division of Insurance and to measure compliance with the
Performance Standards for claims handling. At the conclusion of each process, audit
reports are deliverable to the Compliance Audit Committee and to the Division of
Insurance. Reports generated from the Compliance Audit Program are leveraged by the
DOI in Market Conduct exams.
For private passenger business, Compliance Audit conducts comprehensive audits triennially
of all companies, including new entrants, writing and reporting statistical data. These
audits use stratified random samples of data to measure a company's data quality as it
pertains to Quota Share and rate making. In addition, the same data samples are used to
test adherence to statutory requirements and CAR rules such as Lane-Bolling, Clean-In-Three,
and the consistency of claim practices between the voluntary and the residual market.
For commercial business, each Servicing Carrier is audited bi-annually. Separate exams
are completed concurrently for premium and claims statistical data, claim Performance
Standards, and compliance with CAR rules and procedures. Additional audits of statistical
data and premium accuracy are performed for selected companies that only write
Compliance Audit is also responsible for focus or ad hoc reviews such as industry
testing to verify the quality of the underlying Quota Share data, special requests from
the DOI, private passenger ceded claim run-off, the large loss/indemnity program, and
reinsurance duplicate payment audits.
Additionally, the Compliance Audit Department coordinates the annual audit of CAR's
financial statements by its external auditors.
Mr. Mark Alves
Corporate Auditor & Director