Examination Invoice Terminology

GENERAL INFORMATION

The software that the Department uses to produce invoices has a limited amount of space available in which to fit billing codes. Below is a description of some of the terminology that may appear on examination invoices that may be difficult to understand without explanation. Please do not hestitate to contact Mary Jordan, our Accounting Manager, by e-mail (mjordan@azinsurance.gov) or by phone (602-364-2459) with any invoice-related questions you may have.

TYPES OF EXAMINATION EXPENSES

Any examination may involve expenses incurred by examiners that are reimbursed to the examiner by the Insurance Department and, in turn, billed to the examinee. Most expenses are related to an examiner's travel costs. The following is a list of some of the expense items you may find on an invoice.

  • Travel, Airfare: Expense associated with “the lowest available coach/economy airfare."
  • Travel, Ground Transportation/Parking: Expense associated with ground transportation including car rental, private vehicle mileage, taxi and shuttle.
  • Travel, Lodging: The GSA lodging rate for the city in which the examination is taking place. GSA lodging rates are available from the United States General Services Administration web site .
  • Travel, Meals/Incidentals: Contractors receive two times the GSA meals/incidentals rate for the city in which the examination is taking place. This pays for expenses such as meals, tips, toll parking and phone calls. GSA meals/incidental per diem rates are available from the United States General Services Administration web site .
  • Travel, Other: Other examination-related reimbursable expenses that cannot be allocated to any other category.
  • Other, Expenses: Examples might include examination-related reimbursable expenses for work paper boxes, shipping, or copying.

MARKET CONDUCT EXAMINATION INVOICE TERMINOLOGY

The following are examples of market conduct examination-related work that may appear on invoices.

  • Planning & Coordination: Coordinating logistics, tracking requests/crits, arranging meetings, attending meetings w/ DOI personnel or fellow examiners, planning the examination approach, organizing work, developing budgets, entrance and wrap up meetings, etc.; pre-examination review of filings, complaints, examination instructions, etc.; organizing, coordinating, compiling, filing, indexing, shipping, etc. of work papers.
  • Company Operations/Management: Foundation and background for understanding Examinee transactions and operations.
  • Complaints: Examinee handling of consumer and Department complaints.
  • Marketing/Sales: Whether Examinee representations are misleading or deceptive; does the Examinee abide by its representations; are replacements appropriate; etc.
  • Licensing: Whether the Examinee is transacting business via properly licensed entities; have they filed agent list, MGA documents, etc.
  • Policyholder Service: Whether Examinee adhered to all requirements for notices, refunds, disclosures, and contract provisions, etc.
  • Forms/Filings: Whether all required items used were filed and approved.
  • Underwriting: Favorable and adverse underwriting decisions (cancellations, non-renewals, rescissions, etc.); compliance with Privacy Act requirements; proper use of surcharges, etc.
  • Rating: Proper application of filed rates and calculations of premiums.
  • Claim Practices: Compliance with Unfair Claims Settlement Practices Act and Rule.
  • Appeals: Compliance with Appeals laws.
  • Utilization Review: Compliance with UR laws.
  • Report Preparation: Composing, typing, organizing, amending, coordinating, etc. the Report and exhibits; evaluating and deciding what corrective actions should be recommended in the Report; replying to company objections, including time spent a) reviewing the company objections, related work papers, and the examination Report and b) writing your response to company objections.
  • Post Examination: Consulting on mitigating and aggravating examination circumstances and assisting in the regulatory resolution to the Examination, including preparing for and testifying at a hearing.
  • Other: Other examination-related work that cannot be allocated to any other category.

FINANCIAL EXAMINATION INVOICE TERMINOLOGY

The following are examples of financial examination, financial surveillance or insurer licensing work that may appear on invoices:

  • Financial Exam, Other: Financial examination activity that is not easily allocated to any specified category, such as; reviewing computer applications and testing data integrity; determining sampling methodology; documentation requests, retrieval and follow-up; and Examiner-in-Charge workpaper review.
  • Financial Solvency Analysis: Financial surveillance activity that is not easily allocated to any specified category. Examples may include statistical analyses; reviews of NAIC reports or rating agency information specific to the insurer; overview of financial statement filings; etc.
  • Financial Desk Audit, Other: Financial surveillance activity that is not easily allocated to any specified category. Examples may include communication with supervisor, Department staff, examination staff or other regulators; report of examination review; EDP questionnaire or business continuity review; correspondence review not allocable to specified category; preparation of file for administrative action or delinquency proceeding; review of special interest legislation, rules or orders submitted or sponsored by examinee; analysis and action resulting from news media, rating agencies or other extraneous sources of information; filing and workpapers; etc.
  • Financial Other Cycles Review: Financial examination activity not included in other specifically identified business cycles, such as: federal and foreign income taxes; expenses; related party transactions; review of company background and operations; contingent liabilities and commitments; pending litigation; EDP equipment; guaranty funds; furniture and equipment; leasehold improvements; amounts withheld or retained by company as agent or trustee; inter-company receivables/payables; trial balance reconciliation; subsequent events.
  • Licensing Other: Licensing activity that is not easily allocated to any specified category. Examples may include compliance review for recommendation of renewal of a certificate of authority, certificate of reinsurance accreditation, or certificate of exemption; pre-application review; post-admission file preparation and follow up; communication with supervisor, Department staff, or other regulators; analysis and action resulting from news media and other extraneous sources of information; etc.