Litigation and Enterprise Case Study

Insurance Company Systems Examination for State Regulators

A State Regulator was in the middle of an extensive examination of an insurance company that fell under its jurisdiction. The insurance company was suspected of engaging in certain activities that may have been in violation of certain state and federal regulatory guidelines. The insurance regulators had been working on the examination for a number of months until the examination finally reached a phase where the analysis of particular computer systems was necessary to find out more information. The insurance company, not wanting to lose its ability to do business or jeopardize its license, had up till then cooperated with the state regulators, albeit indirectly. The state regulators had conducted a few onsite interviews, had reviewed documents supplied to them by the insurance company and had begun to build a file with respect to particular activities at the insurance company. However, the regulators had difficulty obtaining and interpreting all of the information, procedures and practices of the insurance company due to the company’s intense use of computerized systems in every aspect of its business. The insurance company also was doing business in other states, and regulators from those states were in similar predicaments. The computer systems used by the insurance company were state of the art and the functionality and use of those systems were way beyond the expertise of the regulators. The regulators knew that in order to ferret out the truth regarding what the insurance company was doing behind the scenes, those systems must be reviewed and analyzed.

Corporate Examination