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Automated Financial Analysis Solvency Tools. David A. Vacca, CPA Assistant Director Insurance Analysis & Information Services Department For Regulators Only. Presentation Overview. Overview of Financial Analysis Solvency Tools Databases Serving Other Purposes. NAIC Databases.

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Automated financial analysis solvency tools

Automated Financial Analysis Solvency Tools

David A. Vacca, CPA

Assistant Director

Insurance Analysis & Information Services Department

For Regulators Only

Presentation overview
Presentation Overview

  • Overview of Financial Analysis Solvency Tools

  • Databases Serving Other Purposes

For Regulators Only

Automated financial analysis solvency tools

NAIC Databases

  • Financial Data Repository (FDR)

  • Exam Tracking System (Financial and Market)

  • Complaints

  • Special Activities

  • Producer database

  • Change of Control (Form A)

  • Regulator Actions

  • Valuation of Securities

Confidential - Regulator Only

Financial analysis solvency tools
Financial Analysis Solvency Tools

  • Collection of automated solvency tools designed to provide an integrated approach to screening and analyzing the financial condition of insurers

  • Financial Analysis Solvency Tools (FAST)

    • Navigation Tools

    • Notification Tools

    • Analytical Tools

    • Prioritization Tools

    • Adhoc Reporting

For Regulators Only

Tools and resources
Tools and Resources

NAIC I-SITE & StateNet








Navigation tools
Navigation Tools

For Regulators Only

Automated financial analysis solvency tools

Electronic Filing - PDFs

Confidential - Regulator Only

Pick a page

  • Selection and print capabilities of any financial or demographic information that comes from the annual/quarterly statements filed by insurance companies with the NAIC

Confidential - Regulator Only

Automated financial analysis solvency tools


Confidential - Regulator Only

Line reports
Line Reports

  • Allow users to compare one line from the annual statement with a group of companies matching the selected criteria (w/ statement type)

Confidential - Regulator Only

Automated financial analysis solvency tools

Company Demographics

Confidential - Regulator Only

Automated financial analysis solvency tools

Validation Exceptions

Confidential - Regulator Only

Notification tools

Notification Tools

Confidential - Regulator Only

Personalized information capture system pics
Personalized Information Capture System (PICS)

  • Push technology

  • Create profile

  • Specify criteria

  • E-mails generated when data changes for companies/individuals that fit into the criteria specified

Confidential - Regulator Only

Automated financial analysis solvency tools

Email Notification Tools

Confidential - Regulator Only

Analytical tools
Analytical Tools

For Regulators Only

Naic financial analysis handbook
NAIC Financial Analysis Handbook

  • Provides a uniform means for insurance departments to more diligently identify companies experiencing financial problems or that pose the greatest potential for developing financial problems

  • Provides guidance for the insurance departments to define and evaluate particular areas of concern in troubled companies

  • Updated annually

Confidential – Regulator Only

Financial profile reports
Financial Profile Reports

  • The Financial Profile Report is a summary of key financial information for a company over the last five years

  • Includes a Financial Summary page

  • There are also detailed sections for: Assets, Liabilities, Capital & Surplus, Loss & LAE Reserve Analysis, Income Statement, Cash Flow and Exhibit of Business and Profitability

Automated graphs by insurer
Automated Graphs by Insurer

For Regulators Only

Profile peer analysis report
Profile: Peer Analysis Report

  • Release for Annual 2007 – Life/Health

  • Released for Annual 2009 – Property/Casualty

  • Profile defines 10 peer companies based on:

    • Line of Business

    • Number of States Writing Business

    • Geographic considerations

    • Closest Asset or Premium Size

  • Profile provides financial data and ratio analysis for 10 peer companies

P c peer analysis profile
P&C Peer Analysis Profile

For Regulators Only

Automated financial analysis solvency tools

Loss Reserve Projection

For Regulators Only

Exam jumpstart
Exam Jumpstart

  • Analyzes the investment schedules data as compared to SVO VOS database or NRSRO feeds and provides summary of potential errors

    • CUSIPs

    • Rates

    • Designations / market value

    • Assumed and Ceded Reinsurance

Prioritization tools
Prioritization Tools

For Regulators Only

Iris ratio
IRIS Ratio

  • 13 ratios for Property/Casualty

    • Overall

    • Profitability

    • Liquidity

    • Reserve

  • 12 ratios for Life and Health

  • 11 ratios for Fraternal

  • Asterisks highlight ratios outside usual range

Iris ratios
IRIS Ratios

Ratio Analysis

  • Evaluate the ratio results by analyzing each component of the calculation

  • Understand the industry average in relation to the company’s result

  • Understand the company’s historical results and put them in context

Iris ratios p c

Gross Prem. Written/Surplus

Net Prem. Written/Surplus

Chg. in Net Writings

Surplus Aid/Surplus

Two-Year Overall Operating Ratio

Investment Yield

Gross Chg. in Surplus

Net Chg. in Surplus

Liabilities to Liquid Assets

Gross Agents’ Balances/Surplus

One-Year Reserve Development/Surplus

Two-Year Reserve Development/Surplus

Estimated Current Reserve Deficiency/Surplus

IRIS Ratios (P&C)

Iris ratios l h

Net Change in C&S

Gross Change in C&S

Net Income to Total Income

Adequacy of Investment Income

Non-Admitted to Admitted Assets

Total Real Estate & Mortgages to Cash & Invested Assets

Total Affiliated Investments to C&S

Surplus Relief

Change in Premiums

Change in Product Mix

Change in Asset Risk

Change in Reserving Ratio

IRIS Ratios (L&H)

Iris ratios1
IRIS Ratios

For Regulators Only

Prioritizations tools iris only public tool
Prioritizations Tools- IRIS (Only public tool)

Confidential – Regulator Only

Analyst team system ats
Analyst Team System (ATS)

  • Available for P&C, Life, Health and Fraternal

  • Automated review system that uses statistical analysis, FAST Scores, RBC to assign review levels

    • Level A – High level of concern

    • Level B – Requires attention

    • No level required

  • Confirmed by team of State financial analysts and examiners

  • ATS Reports

    • Analyst Team Comments and Summary of Criteria

Adhoc summary tools
Adhoc Summary Tools

For Regulators Only

Summary reports aggregate line of business by state
Summary Reports Aggregate Line of Business by State

For Regulators Only

Consumer information source cis
Consumer Information Source - CIS

Consumer Information Source (CIS) provides information about insurance companies to the general public.

Anyone can access key information about insurance companies, by entering the company name and state.

Information provided:

  • Closed insurance complaints

  • Licensing information

  • Key financial data

    Available via a link from the NAIC home page!

For Regulators Only

Cis financial profile
CIS – Financial Profile

Financial Profile:

  • Company Demographic Information

  • Direct Premium Written By Line of Business

  • Invested Asset Mix

  • Three-Year Net Premiums Written

  • Three-Year Policyholders’ Surplus Trend

  • Three-Year Income/Loss Trend

For Regulators Only


  • Please contact David Vacca at or 816-783-8134 for questions

For Regulators Only