What You Will Learn:
1. Introduction to Insurance Internal Audit
- what is insurance?
- internal Audit in SYSC
- the audit committee
- lines of defense model
- the audit plan
- case study: prepare the outline of an audit plan for an insurance company
2. New Business
- telephone sales
- internet sales
- broker sales
- commission
- data verification
- payment processing
- suspense
- cancellation and NTU
- policy rewrite
- case study: develop an audit program to assess quality assurance of telesales
- case study: develop an audit program to review new business data
- case study: develop an audit program to assess the handling of cancellation and processing of suspense payments
3. Underwriting
- the role of the underwriter
- delegation and decision making
- the underwriting risk appetite
- the role of reinsurance
- syndication of risks
- medical underwriting
- actuarial input to underwriting risks
- case study: develop an audit program for an underwriting function
4. Servicing
- policy alterations
- long term business
- payments servicing
- policy options
- changing brokers
- Error and Loss reporting (E&L)
- case study: develop an audit program to review E&L in product servicing
5. Claims Handling
- claims – the fundamentals
- service standards
- non-disclosure
- rejecting claims
- the impact of FOS
- large claim handling
- case study: develop an audit program for assessing fair and prompt handling of claims.
6. Product Development
- planned product launches
- gap filling products
- servicing capability
- financial risks
- ‘toxic’ products
- sales planning
- cost analysis
- case study: develop an audit approach to assess the cost analysis and financial risks of a new product launch
7. Marketing
- financial promotions
- websites
- approval
- technical accuracy
- target markets for insurance
- case study: develop an audit program for assessing the systems and controls for marketing insurance products
8. Compliance
- monitoring and audit
- avoiding duplication
- thematic audits
- regulatory change audits
- case study: develop an audit program for a thematic audit on treating customers fairly.
9. Systems and IT
- process management in insurance
- new system launches
- manual work around
- regulatory driven changes
- printing and stationery outputs
- what can go wrong
- case study: develop an audit program to review the launch of a new IT system for processing insurance
10. What Goes Wrong In Practice
- AIG
- Payment Protection Insurance (PPI)
- GenRe £1,225m for improper reinsurance transactions
- Royal Liver fined £550K for misselling with profits policies
- Legal and General
- Axa Sun Life £500K for misleading advertisements
- Independent Insurance Liquidation
- case studies: what are the key risks that arise from a review of the public cases?
- case studies: what actually caused the specific cases and could they have been avoided – what are the lessons for audit?
11. Internal Audit tools and techniques (Detailed Review & Case Study)
12. Advanced Topics
- commercial insurance
- marine insurance
- aviation insurance
- Lloyd’s of London
- stress testing and liquidity risk
- scenario modeling
- the impact of international accounting standards, IAS 39 and IFRS 7
- case study: develop an audit program to assess stress testing insurance products
- case study: review statutory accounts to assess the prudential capital requirements of insurers
13. Key Questions and Summary
- the skills of the audit team
- the key questions to ask
- the follow up questions
- conclusion
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