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Retirement Planning > Spending in Retirement > Required Minimum Distributions

An IMSA Assessor's Take On Expediting The Renewal Process

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An IMSA Assessors Take On Expediting The Renewal Process

By Dennis M. Groner

Of the over 200 member companies of the Insurance Marketplace Standards Association, more than 70% will be up for renewal in the last quarter of 2003 or early in 2004. Those companies thinking about renewing their membership should begin planning for it now.

Currently, IMSA is working to update and enhance the processes and procedures that independent assessors use to determine whether or not the company meets IMSAs standards. A committee of company representatives and independent assessors has been formed to review procedures and develop an independent assessors handbook that standardizes them.

The updating of the independent assessors processes and procedures should be completed by summer 2003.

Further standardization of the independent assessment procedures is an important step for IMSA. Regulators and companies have been concerned about standardization and should welcome these moves. Independent assessors also will benefit from further standardization, since it will help them streamline their procedures and increase their effectiveness. New independent assessment standards also promise to create greater efficiencies for the independent assessment process that can reduce the assessments cost.

In the past IMSA had relied on training as the principal way of increasing standardization of the independent assessment process. Looking ahead, an independent assessors handbook, which borrows concepts and procedures from the National Association of Insurance Commissioners Market Conduct Examiners Handbook, but is tailored to reflect the scope and mission of IMSA, should satisfy regulators that the independent assessment process is sound and effective.

Companies will know exactly what is required of the assessor and be better able to conduct their self-assessments to meet their assessors needs.

Some companies may want to wait until the independent assessors handbook is completed before proceeding with preparations for renewal. They may want to know more specifically what they will be expected to provide to independent assessors in the way of evidence that their policies and procedures exist, function as designed, are being implemented effectively, and are being monitored and supervised appropriately.

Instead of waiting until summer 2003, however, it may be in the companys best interest to begin preparing for renewal now. Here are some suggestions:

1. Allocate resources early so that there is ample staffing available to do the self-assessment in late 2003 and early 2004. Companies need to consider whether it is more efficient to utilize staff with experience in the process from prior self-assessments or to train new staff. The more experienced the staff is with IMSA, the more efficient it will be.

2. Take the time now to review proposals for IMSA services from independent assessors. Different assessors have different areas of expertise, and it is important to find the right person for your organization. There are wide differences between assessors in their costs, and this difference should still exist even after new procedures and standards are implemented.

However, it takes time to get proposals, review them and make a well-researched choice. Companies are advised to consider a wide range of assessors rather than simply relying on their prior assessor, especially given the introduction of new independent assessment standards.

3. Identify a suitable independent assessor and contract for their services. The number of IMSA-approved assessors has shrunk over the last three years. If a company wants to be certain of getting the assessor it wants, it should lock up that assessor early in 2003.

4. When enhancements to the independent assessment process are completed, the company will need to re-examine its prior self-assessment data and determine where it needs to be updated. This is something that should not be left to the last minute since it can complicate the self-assessment process for renewal.

5. Companies should also schedule time to meet with their independent assessor before they do their independent assessment to review how the enhancements to the assessment process will be implemented. This should be done as early as possible to make the self-assessment process efficient.

6. Companies that have streamlined their staffs may find that the amount of work required to do the self-assessment in the first quarter of 2004 can create significant strains in the normal workflow for all of the company functions involved in preparing data. For these companies, stretching out the self-assessment process over a longer time frame may be the best solution. This takes planning and foresight.

By taking steps to prepare for a more efficient self-assessment process now, companies seeking to renew their IMSA memberships will be better positioned to accommodate any new independent assessment standards while renewing their membership in the most cost-efficient manner possible.

Dennis Groner is a principal in Groner & Associates, a Livingston, N.J., consulting firm that provides a wide range of services to financial services firms. He can be reached via e-mail at [email protected].

Reproduced from National Underwriter Edition, March 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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