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Streamlining the Annual Statutory Reporting Process for Insurance Companies

Published May 29 2020
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The purpose of this blog is to provide some insight into the annual statutory reporting process for insurance companies and a solution that Alithya has created to help to streamline significant components of the reporting cycle.

Introduction to the Annual Statutory Reporting Cycle

The annual statutory reporting process for insurance companies is a long, arduous cycle that overlaps with the year-end GAAP audit and reporting process, the first quarter GAAP, and the Statutory reporting process. Between March 1 and June 1, insurance companies must file the Annual Statement, Risk-Based Capital (RBC), the Management Discussion & Analysis (MD&A), the Annual Combined, the Quarterly Financials, and the Audited Financial Report, in addition to several interrogatories, exhibits, and supplementals with the National Association of Insurance Commissioners (NAIC). Getting these reports to the filing date is a coordinated effort that involves multiple people from multiple departments completing components of the filings, validating verbiage and financial data, and reconciling the components across multiple sections within the reports. Each filing is a project in itself that involves a checklist and calendar to ensure that various components are completed and reviewed in a timely manner to ensure the filing is not delayed, the message and data are accurate, and the appropriate approvals have been received.

Living the process of preparing the Footnotes, MD&A and the Audited Financial Report

The Footnotes to the Annual Statement, the MD&A and the Audited Financial Report provide:

  • Key financial and non-financial related to the company’s:
    • Solvency
    • Risks
    • Outlook
    • Concentrations
    • Exposure
    • Performance
  • Regulators, rating agencies and counter-parties with:
    • Critical insight into the company’s ability to:
      • Sustain market conditions
      • Pay material loss events, such as catastrophes or a pandemic

In the preparation of these components are commonly:

  • Manual
  • Lack controls
  • Offers no workflow
  • Requires significant oversight given the quantity of review iterations
  • Provides little insight into outstanding items
  • Progress made
  • What remains outstanding
  • Accountability

Finally, the preparation is cumbersome for those responsible for creating and updating tables, maintaining verbiage that reconciles to the tables, aggregating feedback, comparing against prior versions, and distributing the updated documents for further review and, eventually, approval.

Having previously been responsible for the preparation, aggregation, and filing of the NAIC reports, I had to maintain Microsoft Word documents to capture verbiage, tables, and I had to use Microsoft Excel for calendars, checklists and to review matrices to ensure updates and reviews were being made to the documents and the appropriate people were involved in the process.

The annual cycle began in December, with rolling forward tables and verbiage and ended on June 1 when the annual audit was finally completed and the NAIC filing notification was received. Navigating from the start of the cycle to the end had several challenges, with many repeat offenders.

The review routine included a daily process of reviewing and aggregating the comments and updates from the day, responding to comments, reconciling updates to make sure the tables reconciled to the verbiage, ticking and tying out the tables to ensure they footed, updating the document to make sure nothing had been left out, following up with colleagues that had not responded and sending additional emails for additional review, responses to comments received or corrections to the updates provided. That is in addition to trying to interpret the handwritten notes that were dropped on my desk, which were often on an older version of the document. I always had one or two reviewers that were a version or two or three behind, so trying to reconcile back was always a laborious task that I commonly found a staff member to handle. No filing would be complete without the question of, “Who provided you with this?” which would require me to rifle through older versions of the document, emails, handwritten notes, etc. to respond to the question, which would typically get the response, “Oh, ok, she knows what she is talking about. Thanks.” or “Ok, thanks, I didn’t think I had provided you with this, yet.”

This spin cycle continues for weeks, sometimes, depending on the complexities of the company, months. The review process becomes more challenging when there are major loss events, changes in market conditions that impact the company’s investment portfolio, or subsequent events that need to be reported. By the time we had arrived at the filing date, there was always that, “Hey! Just checking to see if you filed yet, as I may have a late change.” or “Do I need to review this?”. By the time we filed, I cycled through countless meetings, and hundreds, if not thousands, of emails, phone calls, drop-ins, and follow-ups to confirm that we had everything documented accurately. When the final approval was received, I was moving on to the next regulatory report to complete and also handling my other responsibilities in the GAAP world.

Ultimately, a week or two would go by, and the printed document was received back from the printers, compliance, or the auditors, and we would find a rounding error, misspelled word, or some other small item that should have been caught with all of the eyes on the documents. Each year, I was left wondering how we could improve these routines to the point where my team and I spent less time updating the document, checklists, matrices, and more time on other value-added tasks.

Creating Efficiencies and Improving the Reporting Cycle

Having lived through the process for many years, I know there are consistent struggles and challenges in the reporting cycle, as well as unknowns that occur annually. We at Alithya have created a solution to facilitate a process that offers the workflow, collaboration, and management of the reporting process to create efficiencies, allow for insight, identify bottlenecks and reduce risk in the reporting cycle.

Our solution offers:

  • A repeatable process that rolls forward prior period data and verbiage, as well as centralized maintenance of common dates, text, and data.
  • Automated updates to numerical data within verbiage and automated performance verbiage that reconciles to financial tables within the report.
  • Access for multiple users to simultaneously update, validate, and approve.
  • Collaborate with users by providing commentary or questions in the solution for others to respond to.
  • Elimination of version control, as review, occurs in a living report with the ability to check-out and check-in the report.
  • Review cycles can be handled inside of the solution and maintained throughout the process to avoid referring back to previous emails, hard copies, and various notes.
  • A security that allows access to the sections of the report that are pertinent to the users’ responsibilities.
  • Notification to remind users when tasks are due to ensure compliance with the reporting timeline.
  • New notes or new columns within tables can be maintained much more seamlessly than having to deal with the formatting and manipulation that occurs in legacy solutions.
  • A controlled and documented process that allows for a seamless audit review.


This blog should have provided some insight into how Alithya can help to streamline and create efficiencies in the statutory reporting cycle. Our solution allows  insurance companies the opportunity to eliminate manual review process and re-prioritize resource activities. In the coming weeks, we will have a webinar on the solution to provide additional insight into our solution and how we are helping insurance companies reduce cycle time of processing updates, reviewing reports and meeting the statutory filing deadline.

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