Risk Assessment Division
The Risk Assessment Division monitors the financial solvency of insurance companies licensed in the state of Ohio. The professionals in this division review financial statements of every company licensed in Ohio and complex transactions to ensure that insurance companies are safe, sound and have enough money to pay claims filed by consumers. The professionals in this division closely monitor the financial condition of insurance companies doing business in Ohio by conducting in-house analyses of financial statements and all other supplemental filings made by insurers. Risk Assessment professionals also monitor insurers’ statutory and solvency compliance on an ongoing basis and conducts periodic on-site field examinations. The Risk Assessment Division has five main areas: Domestic Company Analysis, Foreign and Alien Company Analysis, Financial Condition Examination, Licensing and Administration and Market Conduct.
Domestic Company Analysis Unit
The Domestic Company Analysis Unit monitors the risk profile, financial condition and operating results of Ohio-domiciled insurance companies using a well-developed risk and company ratings process. At least once per quarter, this unit updates each insurer’s risk and company ratings based on an assessment and evaluation of financial performance and corporate governance, as well as other qualitative and quantitative measures. The Domestic Company Analysis Unit uses these risk and company ratings to allocate resources and to develop a specific surveillance strategy for each insurer, including determining the frequency and scope of required regulatory examinations. This unit is also responsible for reviewing financial transactions such as mergers, acquisitions, re-domestications, dividends, reinsurance agreements and inter-company agreements.
Financial Condition Examination Unit
The Financial Condition Examination Unit conducts on-site financial examinations of insurance companies that are domiciled in Ohio. Ohio law requires a financial examination be conducted on licensed companies at least once every five years. However, the Financial Condition Examination Unit’s risk based analysis determines the frequency of examinations based on an insurer’s performance and risk management practices. This analysis allows the Department to focus its resources on those companies with the highest degree of regulatory concern.
Foreign and Alien Company Analysis Unit
The Foreign and Alien Company Analysis Unit is responsible for determining and implementing the appropriate regulatory course of action for companies with weak performance, inadequate risk management practices, and a higher degree of regulatory concern. The professionals in this unit facilitate communications with certain internal and external stakeholders about regulatory actions taken or planned, including requiring a corrective action plan from companies with a higher risk of failure and monitoring the board’s and senior management’s implementation of the corrective actions.
Licensing and Administration Unit
The Licensing and Administration Unit has varying responsibilities including surveillance technology and automation enhancements, fiscal support and company licensing. This unit also calculates and certifies domestic insurers’ premium and franchise tax, foreign Insurers’ premium tax, retaliatory tax and fire marshal tax owed to the state.
Market Conduct Unit
The Market Conduct Unit monitors insurers’ compliance with Ohio insurance laws and regulations by examining companies’ business practices, such as underwriting, marketing and claims handling. The professionals in this unit are responsible for gathering industry information from a variety of sources, including consumer complaints, company filings, National Association of Insurance Commissioners (NAIC) databases, and analyzing that information to determine which companies need further scrutiny to determine their compliance with Ohio law.
Office of Captive Insurance
Captive Insurance is an alternative to traditional insurance that enables businesses to control and customize their insurance program in a manner that is responsive to their financial objectives.The Office of Captive Insurance supports a business environment for the growth and prosperity of the captive insurance industry in Ohio, provides a structured regulatory process for the initial evaluation, licensing, reporting, analysis and examination of captive insurance companies domiciled in Ohio, reviews captive insurance company strategies and their execution to assess and evaluate operational success and financial strength, works to ensure that captive insurers can meet their contractual and financial obligations, strives to understand the impacts of financial, operational and underwriting (risk acceptance) challenges on captive capital and surplus, and establishes standards for business/professional support organizations that work with captive entities in the state of Ohio, including captive managers, accountants/auditors and actuaries.