A national organization of state insurance regulators found that Oklahoma has resolved problems in the financial examination section of the state insurance department that were discovered in a review of the agency in February 2010.
Oklahoma Insurance Commissioner John D. Doak reported that the National Association of Insurance Commissioners (NAIC) found that a major deficiency in the Oklahoma Insurance Department has been corrected. Doak, who took over as chief administrator of the department in January 2011, says the problem was inherited by his administration.
The NAIC accreditation team that conducted the February 2010 review of the OID’s regulation functions uncovered serious concerns within the financial examination section of the Oklahoma agency. As a result of the subpar review, the OID was scheduled to undergo a re-review about 18 months after that February 2010 inspection instead of receiving the normal five-year accreditation.
From Sept. 19-21 this year, the OID underwent the mandated re-review by an NAIC accreditation team that was substantially the same as the team that visited in February 2010. The re-inspection was intended to verify that the concerns stated in the prior review were addressed. Inspectors evaluated OID’s implementation of a more “risk-focused” exam process, which is an NAIC requirement as of January 2010.
Prior to the risk-focused approach, there was more emphasis placed by regulators on verifying account balances than on identifying risks that an insurance organization faces and evaluating the internal controls that the company has put in place to mitigate those risks.
NAIC’s accreditation review team found that its prior concerns were appropriately addressed and corrected and that “substantial improvement” had occurred in OID’s processes as the Doak administration implements new and improved protocols.
The re-review team leader recommended that Oklahoma be returned to a full, five-year accreditation status, and that standing was confirmed by NAIC’s Financial Regulation Standards and Accreditation Committee, which consists of 16 insurance commissioners from various states.
With the remainder of its full five-year accreditation restored, the Oklahoma Insurance Department’s Financial Division won’t be re-inspected until 2015.
Accreditation is vital so that other states can trust Oklahoma’s regulatory work and accept that firms domiciled in Oklahoma and thus vetted by OID are as sound.
Source: Oklahoma Department of Insurance