Ohio and Okla. Get the OK on Financial-Regulation Practices

Regulators in Ohio and Oklahoma have gotten a thumbs-up from the National Association of Insurance Commissioners (NAIC) for financial regulation of insurers in their states.

Ohio Lt. Gov. and Insurance Department Director Mary Taylor announced last week that her department has been granted full NAIC accreditation.

The national organization’s accreditation program sets and maintains standards for financial solvency regulation of insurers. Accreditation is awarded for five-year periods, with annual reviews within that time frame that focus on regulators’ financial analysis and personnel practices.

The program is aimed at ensuring proper oversight of companies that do business in multiple states.

“Receiving full accreditation from the NAIC demonstrates the high quality service the department provides to Ohioans,” Taylor said in a news release.

Also last week, the Oklahoma Insurance Department (OID) announced it has corrected deficiencies in its financial oversight of insurers, with an NAIC review noting “substantial improvement” in department protocols that were found lacking in a February 2010 inspection.

NAIC had required the Oklahoma department to undergo a follow-up review in September. The review team found that the department had implemented a more “risk-focused” examination of the finances of companies that provide Oklahoma auto insurance and other types of coverage–an approach that NAIC made mandatory nearly two years ago.

OID officials said in a release that they had previously put more emphasis on verifying account balances than on identifying financial risks facing insurers and evaluating their internal controls to mitigate such dangers.

“A lot of work went into these improvements and this accreditation is evidence of increased professionalism and a more businesslike approach to insurance regulation,” Oklahoma Insurance Commissioner John Doak, who came into office after the initial review, said in a statement.

According to OID, accreditation is crucial to show regulators in other states that they can trust their counterparts in the Sooner State and accept that firms based there are financially sound.

OID is not scheduled to be inspected again until 2015.

The NAIC’s financial regulation and accreditation program “is a testament of our success as state regulators to hold companies accountable to policyholders through strict solvency standards and effective implementation of those standards,” NAIC President and Iowa Insurance Commissioner Susan Voss said in a statement released by OID. “We are pleased with Oklahoma’s commitment to these standards.”

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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