Audit of insurers: the inspection visit
Before the inspectionCAR Audit will issue a formal notice of inspection at least two weeks before the date of the visit. This formal notice will almost always be preceded by a telephone call some weeks before the visit to discuss with the insurer the information that will be required both during and prior to the inspection. The auditors will also outline the areas the review will cover and discuss any issues that the insurer may have concerning the visit. Where required a pre-inspection visit will be arranged.
The inspectionAuditors carry out the inspection in accordance with audit objectives, designed to ensure that insurers are operating the chargeable event and personal portfolio bond rules correctly.
Auditors will visit the location at which the insurer’s records are maintained. This will normally be the provider’s own premises, but where the administration is carried out and the records are held by a third party, the inspection will be carried out at the third party’s premises. Records must be available for audit in the UK.
The insurer must show auditors certain records to demonstrate that they have operated the chargeable event reporting regime effectively. The records that should be maintained and made available are described at IPTM7250.
At the close of the inspection the auditors will discuss their findings with the relevant members of staff. The insurer is also encouraged to offer feedback on the conduct and content of the inspection visit.
There may be some particular issues which arise out of an inspection or which are of special concern to a particular insurer. CAR Audit will be pleased to give advice or explain their approach on any issue as and when it arises.
After the inspectionAuditors will aim to report their findings to insurers within 28 days of the end of the visit. This is in the form of a written report, but an electronic version of the report can be sent on request. If, on the basis of the inspection results and other information available, auditors are satisfied that events have been correctly recognised and reported by the insurer, they will advise the insurer that no further action is needed.
If the auditors find that the rules have been breached they will ask the insurer to take corrective action and there may be liability to a penalty - see IPTM7245.
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