Audit, Accounting, and Risk Management

Coverholder Audit Services

Service Overview

The Coverholder/MGA audit process can be both complex and multi-dimensional. 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 most 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 Performed

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

Additional materials

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Sample Engagements

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

Alan Gray LLC was retained by a major 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  risk binding and reporting, Trust Account management and premium remittance to verify adherence to 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.

Coverholder Audit Services

 Professionals

Meet the team.

Our professionals

We have assembled an expert team of professionals whose industry experience encompasses all aspects of insurance, reinsurance, and capital markets services.

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