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Coverholder Audit Services

Coverholder Audit Services

The Coverholder audit process is both complex and multidimensional. Whether the audit pertains to financial compliance reviews, claims handling/reporting, underwriting, or systems, Alan Gray LLC tailors its audits to clients’ specific needs. Audits range from comprehensive management reviews to identifying and/or quantifying issues related to specific areas of concern. Law firms are often asked to undertake Coverholder audits, but since their core competency is not auditing, the results can vary and in many cases are considerably more expensive. Alan Gray LLC has a proven track record in effectively managing successful audits and providing superior value added solutions. The experienced professionals at Alan Gray LLC have reviewed various lines of business including commercial general liability, medical malpractice, workers’ compensation, transportation and products liability.

Services Include

  • Compliance and Financial Reviews
  • Claims Reviews
  • Underwriting
  • Systems Testing

SAMPLE ENGAGEMENTS:

Comprehensive Premium, Accounting and Financial Controls Audit of a MGA/Coverholder

Alan Gray LLC was retained by a top Excess & Surplus Lines carrier to conduct a comprehensive premium, accounting and financial controls audit of a Managing General Agent (MGA)/Coverholder. The staff audited all aspects of the risk binding and reporting, Trust Account management and premium remittance to verify adherence with the Program Administrator Agreement. Specific activities included analyzing segregation of duties and internal controls, Trust Account reconciliation, Completeness Testing of bound and reported risks and timely remittance of premium. The audit uncovered various weaknesses that resulted in recommendations to enhance internal controls, improve the bank reconciliation process and strengthen the segregation of duties.

Pre-binding Renewal Audits of a TPA (Healthcare)

Alan Gray LLC has been retained for many years to perform pre-binding renewal audits of a Third Party Administrator (TPA) managing large hospital malpractice program claims for a leading carrier. The audits focus on effective claims handling, adequacy of reserves, and early identification of potentially large exposures. In addition, we verify compliance with the TPA Service Agreement. Alan Gray LLC’s expertise has contributed significantly to the overall successful management and profitability of the program.