The Requirement
- Client required an audit of a large MGA underwriting a substantial volume of premium income.
- Our client required an independent assessment of the effectiveness of the management and controls employed within the Finance departments of the MGA to ensure that they operated effectively.
- Assurance sought that appropriate controls were in place, policies and procedures being adhered to and that premium, commission and tax calculations were accurately processed.
- The audit was to also ascertain what data quality/peer review checks were in place to ensure data calculation accuracy. We reviewed 6 schemes by 6 different coverholders focusing on underwriting years 2013-2015.
Our Solution
The audit conducted an on-site visit and gathered information through workshops and interviews as well as follow up emails and phone calls as required. Underwriting data and bordereaux were provided in advance of and during the site visit. The review objectives were:
- Understand the business as usual (‘BAU’) control environment for the collection, reconciliation and settlement of premiums associated with the business underwritten.
- Conduct targeted transaction accounting checks to verify the Original/ Gross Premiums charged and Retail Commission deducted by Restricted Coverholders were consistent with the terms of the TOBA’s and were reconciled to the correct scheme.
Services Delivered
- Pro provided an understanding of the BAU system and verified that most of the calculations were undertaken correctly.
- Issues were identified for certain schemes where a reduced premium was actually settled despite the correct premium being reported.
- Additionally Pro identified instances where incorrect taxes were also applied.
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