Our audit included an examination of the effectiveness of the Office of Insurance Regulation (OIR) procedures for reasonably ensuring the accuracy and completeness of the Closed Claim Database (CCD) during the period January 7, 2003, through February 29, 2004.  As noted below, our audit disclosed several concerns relating to the effectiveness of the OIR procedures:

Finding No. 1:         A substantial number of database records contained either incomplete or incorrect data.  Absent correction of these errors, the database will produce misstated and incomplete reports.

Finding No. 2:         No methodology was in place to verify that all closed claims were reported by insurers and self-insurers.  Absent policies and procedures to address the detection of unreported closed claims, the OIR lacks reasonable assurance of the completeness of the closed claim database.

The Director's response to the findings and recommendations contained in this report can be viewed on the Auditor General's Web site.