Summary

This operational audit covering the period March 1, 2004, through February 28, 2006, focused on the Office of Insurance Regulation (OIR), Specialty Products Administration’s, (SPA) regulation of viatical settlement providers and OIR’s market conduct examinations. As indicated by the following, our audit disclosed some opportunities for improvement:

Finding No. 1:       OIR could enhance the current practice to identify potential conflicts of interest of its regulatory staff and management by annually requiring a statement regarding any known conflicts of interest.

Finding No. 2:       Written policies and procedures related to OIR’s regulation of viatical settlement providers could be enhanced.

Finding No. 3:       OIR should require a supervisory review and approval of viatical license continuation evaluations.

Finding No. 4:       SPA did not always document the authorization and disposition of investigations in the manner required by the SPA Investigator’s Procedures Manual.

Finding No. 5:       The Bureau of Market Investigations did not obtain independent verification of professional designations held by contracted examiners.

The Commissioner's response is included at the end of this report as Appendix A.