Insurance Consulting Services

Insurance accounting and reporting is very complex and requires years of specialized training that is often difficult to locate in today’s competitive job market Avastar CPA & Consulting, Inc. can provide your company comprehensive financial reporting and accounting services on an interim basis should you find yourself without adequate staffing to complete your regulatory commitments. We have over 20 years experience in financial reporting and accounting for life insurance companies. We can provide your company with the services listed below should you find that you need them on a temporary basis.

Quarterly & Annual Statement Preparation

Quarterly and Annual statements are a regulatory requirement for insurance companies. Failure to file these statements accurately and timely can jeopardize your company’s ability to continue to sell insurance. We can assist you in the preparation of your quarterly and annual statements in conformity with statutory accounting practices prescribed or permitted by the insurance dept. in your state of domicile.

GAAP & Statutory Accounting Research

The authoritative accounting literature applicable to life insurance companies is extensive and can be very complicated. Insurance companies are required to prepare financial statements in accordance with Statutory Accounting Principals (”SAP”). SAP accounting principals differ in many respects from accounting principals generally accepted in the United States of America (”GAAP”). Our firm can help you to navigate the differences.

Mgmt Discussion & Analysis Preparation

The Mgmt. Discussion and Analysis (”MD&A”) report offers details about issues such as revenues, past and future plans for the company, uncertainty within the company, sources of liquidity, cash flow problems, liabilities, raising funds, and materiality. The MD&A is intended to assist regulators and stakeholders in understanding and assessing the significant changes and trends, as well as risks and uncertainties related to the results of operations and the financial condition of the company. A meaningful, well written MD&A report is essential to ensuring that your company is providing regulators and stakeholders the information required to evaluate your company performance. We can assist you with the preparation of your MD.

Risk Based Capital (”RBC”)

RBC represents an amount of capital based on assessment of risks that a company should hold to protect policyholders against adverse developments. RBC is used by regulators, rating agencies and other stakeholders as an indicator of the financial strength of a company. We can assist you company in the preparation of your RBC report, and in structuring transactions to improve your RBC position.

Audited Statutory & GAAP Financial Statements

We can assist you in the preparation and analysis of your audited statutory and GAAP financial stmts. including working with your external auditors to ensure that your statements are compliant with both statutory and GAAP accounting principals.

Reinsurance Audits/Agreed Upon Procedures

With rising number of high impact losses in recent years, managing reinsurance effectively has gained a lot of importance. In absolute terms, the quantum of reinsurance has also substantially grown in recent times.

Insurers opt for reinsurance protection for many reasons, of which the key ones are listed below:

a. Ensure optimal utilization of capital and free reserves

b. Protect against Catastrophe Risks – both natural and manmade

c. Stabilize results over the years by minimizing the impact of high value events on the net account

d. Obtain technical assistance to write unfamiliar business lines

Management of Reinsurance requires specific focus as it operates on a framework which is different from that of the direct insurance portfolio. A large part of reinsurance operates at a portfolio level with an agreement that is legally separate from that of direct insurances. This disconnect between reinsurance and the underlying direct insurance often leads to operational issues causing mismatch in the transactions relating to direct insurances and corresponding reinsurance.

The basic expectation from reinsurance processes and systems would be to ensure that the reinsurance agreement is managed in accordance with the reinsurance program and recoveries are made for all eligible claims. Reinsurance audit attempts to maximize fulfillment of the above expectations by applying an auditing program designed to discover any omissions data.

Other Services

We can also assist your company with the following services:

Investment Accounting

Merger & Acquisition Support

Due Diligence

Consolidations

Management Financial Statements

IT Implementation Testing & Support

IT Audit