1 Nature, Conduct, and Regulation of the Business .01-.113 General Nature of the Business .01-.03 Kinds of Insurance .04-.08 Legal Forms of Organization .09 Methods of Producing Business .
10-.17 Major Transaction Cycles .18-.41 Underwriting of Risks .18-.27 Pooling, Captives, and Syndicates .28-.30 Processing and Payment of Claims .
31-.32 Investments .33-.36 Definition of Public Business Entity .37-.41 Revenue Recognition .42 Accounting Practices .43-.
113 State Insurance Regulation .43-.51 National Association of Insurance Commissioners .52-.53 Federal Regulation -- Securities and Exchange Commission .54-.59 Federal Regulation -- The Dodd-Frank Wall Street Reform and Consumer Protection Act .60-.
70 Federal Regulation -- Terrorism .71-.75 Industry Associations .76Additional Guidance When Statutory Accounting Practices .77-.104 Generally Accepted Accounting Principles .105-.112 Comparison of SAP and GAAP .
113 2 Audit Considerations .01-.178 Introduction .01 Scope of the Audit Engagement .02-.05 General Considerations .02-.04 Integrated Audit of Financial Statements and Internal Control Over Financial Reporting .
05 Planning and Other Auditing Considerations .06-.65 Audit Planning .07-.08 Audit Risk .09-.13 Risk Assessment Procedures .14-.
19 Understanding the Entity, Its Environment, and Its Internal Control .20-.39 Common Industry Ratios and Performance Metrics .40-.52 Identifying and Assessing the Risks of Material Misstatement .53-.56 Performing Audit Procedures in Response to Assessed Risks .57-.
63 Use of Assertions in Obtaining Audit Evidence .64-.65 Other Risk Assessment Activities and Considerations .66-.70 Planning Materiality .66-.68 Performance Materiality and Tolerable Misstatement .69-.
70 Consideration of Fraud in a Financial Statement Audit .71-.72 Insurance Industry -- Fraud Risk Factors .73-.95 The Importance of Exercising Professional Skepticism .75 Discussion Among Engagement Personnel Regarding the Risks of Material Misstatement Due to Fraud .76-.79 Obtaining the Information Needed to Identify the Risks of Material Misstatement Due to Fraud .
80-.81 Identifying Risks That May Result in a Material Misstatement Due to Fraud .82-.86 Assessing the Identified Risks After Taking an Evaluation of the Entity''s Programs and Controls That Address the Risks Into Account .87-.88 Responding to the Results of the Assessment .89 Evaluating Audit Evidence .90 Responding to Misstatements That May Be the Result of Fraud .
91-.92 Communicating About Possible Fraud to Management, Those Charged With Governance, and Others .93-.94 Documentation and Guidance .95 Use of Information Technology .96-.99 Going Concern Considerations .100-.
108 Evaluating Misstatements .109-.112 Audit Documentation .113-.121 Consideration of the Work of Internal Auditors .120-.121 Communication of Matters Related to Internal Control .122-.
129 Identification of Deficiencies in Internal Control .123-.124 Communication of Deficiencies in Internal Control .125-.129 Communication of Other Matters With Those Charged With Governance .130-.134 Matters to Be Communicated .132-.
134 Communications by Successor Auditors .135 Auditor Independence .136-.137 Auditing Fair Value Measurements and Disclosures .138-.140 Considerations for Auditors to Comply With the NAIC Model Audit Rule .141-.162 Awareness .
142-.143 Change in Auditor .144 Auditor''s Letter of Qualifications .145 Qualifications of the Auditor .146 Indemnification .147 Partner Rotation .148 Prohibited Services .149-.
151 Consideration of Internal Controls in a Financial Statement Audit .152 Notification of Adverse Financial Condition .153-.154 Report on Internal Controls .155-.157 Working Papers .158 Communications to Audit Committees .159 Management''s Report on Internal Controls Over Financial Reporting .
160-.162 Auditor''s Consideration of State Regulatory Examinations .163-.167 Auditor''s Consideration of Permitted Statutory Accounting Practices .168-.172 SEC Requirements for Management''s Report on Internal Control Over Financial Reporting .173-.178 3 Premiums .
01-.132 Background .01-.29 Types of Premiums Adjustments .04 Summary of Premium Transaction Flow .05-.26 Involuntary Markets .27-.
29 Accounting for Premiums and Acquisition Cost .30-.110 Premium Revenue and Premium Adjustments .30-.49 Premium Receivable .50-.55 Acquisition Costs .56-.
83 Premium Deficiencies .84-.97 Medicare Part D .98-.102 Accounting for Contracts That Do Not Transfer Insurance Risk .103-.104 Disclosure Considerations .105-.
110 Auditing Premiums and Acquisition Costs .111-.132 Audit Planning .111 Consideration of Fraud in a Financial Statement Audit .112 Audit Risk Factors -- Premiums and DAC .113-.116 Management Estimates .117-.
119 Risk of Material Misstatement -- Inherent Risk Factors .120-.121 Internal Control .122-.124 Control Environment .125-.126 Risk Assessment Process .127-.
128 Control Activities .129 Audit Procedures Responsive to the Assessed Risks of Material Misstatement .130-.131 Audit Consideration Chart .132 4 The Loss Reserving and Claims Cycle .01-.204 Introduction .01-.
02 Types of Businesses and Their Effect on the Estimation Process .03-.14 Policy Duration .04 Type of Coverage .05 Kind of Insurance Underwritten: Line of Business or Type of Risk .06-.14 The Transaction Cycle .15-.
32 Claim Acceptance and Processing .16-.18 Claim Adjustment and Estimation .19-.24 Claim Settlement .25-.28 Reinsurance Recoverable .29-.
30 Salvage and Subrogation .31-.32 Components of Loss Reserves .33 Estimating Methods .34-.53 Illustrative Projection Data .44-.53 LAE Reserves .
54-.62 DCC Reserve Calculation Approaches .56-.59 AO Reserve Calculation Approaches .60-.62 Changes in the Environment .63-.66 Critical Accounting Policies and Estimates Disclosure .
67-.68 Use of Specialists by Management in Determining Loss Reserves .69-.71 Guaranty Fund and Other Assessments .72 Accounting Principles .73-.95 GAAP Accounting .73-.
74 Discounting Loss Reserves .75-.82 Structured Settlements .83-.85 Reinsurance Recoverables .86 Liability for Unpaid Claims and Claim Adjustment Expenses .87-.88 Statutory Accounting .
89-.95 Disclosures of Certain Matters in the Financial Statements of Insurance Enterprises .96-.112 Applicability to Statutory Financial Statements .96 Relationship to Other Pronouncements .97-.112 Auditing Loss Reserves .113-.
204 Planning Considerations -- Overview .113-.118 Consideration of Fraud in a Financial Statement Audit .119-.121 Risk of Material Misstatement -- Inherent Risk Factors .122 Internal Control .123-.125 Control Environment .
126 The Entity''s Risk Assessment Process .127-.128 Information Systems .129 Control Activities .130-.131 Identifying and Assessing the Risks of Material Misstatement .132 Audit Procedures Responsive to the Assessed Risks of Material Misstatement .133-.
141 Use of Loss Reserve Specialists .142 Loss Reserve Specialists Engaged by the Auditor .143-.145 Use of Management Specialists by Auditors in Evaluating Loss Reserves .146-.148 Auditor''s Response to Management''s Use or Non-Use of a Loss Reserve Specialist .149 Evaluating the Reasonableness of the Estimates .150 Analytical Procedures .
151-.156 Testing the Data, Assumptions, and Selection of the Estimate .157-.161 Auditing the Underlying Data Used in the Loss Reserving Process .162-.167 Develop a Point Estimate or Range to Evaluate Management''s Estimate .168-.169 Loss Reserve Ranges .
170-.176 Factors That Could Affect a Range of Reasonably Possible Outcomes .177-.183 Evaluating the Financial Effect of a Reserve Range .184-.192 Auditor Uncertainty About the Reasonableness of Management''s Estimate and Reporting Implications .193-.194 Evaluating the Reasonableness of Loss Adjustment Expense Reserves .
195-.196 Ceded Reinsurance Recoverable .197-.202 Understanding the Impacts of Foreign Exchange .203 Audit Consideration Chart .204 5 Investments and Fair Value Considerations .01-.253 Introduction .
01-.08 Overview .01 Investment Evaluation .02-.03 Recordkeeping and Key Performance Indicators .04-.05 The Transaction Cycle .06-.
07 Safekeeping .08 Regulation .09-.14 Statutory Limitations .10-.14 FASB Accounting Standards Codification 820 and 825 .15-.40 Definition of Fair Value .
16-.22 Application to Liabilities and Instruments Classified in a Reporting Entity''s Shareholders'' Equity .23-.25 The Fair Value Hierarchy .26-.30 Fair Value Determination When the Volume or Level of Activity Has Significantly Decreased .31-.33 Disclosures .
34-.35 Fair Value Option .36-.38 Statutory Accounting .39-.40 Accounting Practices .41-.226 Significant Differences Between GAAP and Statutory Accounting .
42 Cash and Cash Equivalents .43-.50 Debt.