What Does an Insurance Examiner Do?

An insurance examiner is a government employee who is responsible for auditing insurance firms and ensuring that these companies comply with regional or national laws. In many countries, examiners are required to conduct audits on a regular basis while these individuals also have the authority to conduct unscheduled audits if an insurance firm is suspected of having violated industry rules or regulations. During investigations involving major companies, examiners normally work in teams with each individual taking responsibility for looking into one element of the firm's financial affairs.

Typically, an insurance examiner must have completed a college degree and many employers prefer to hire people who have completed finance or mathematics related degree programs. In some countries, the people who conduct audits have to be licensed accountants; in this case an examiner may have to attend a series of accountant training classes and then pass a licensing examination. Aside from hiring examiners who have accounting or finance related academic credentials, regulatory agencies often hire people who have prior experience of working in the insurance industry.

Insurance companies issue various types of policies including life, health, property and liability contracts. There are laws in many nations that are designed to ensure that these firms have sufficient cash in reserve to cover projected payouts. An insurance examiner must review each firm's accounts and compare its cash reserves with its outstanding obligations. If the firm lacks money, the examiner may instruct the company to raise more funds or to refrain from issuing any more policies until its cash reserves have been bolstered. In a worse case scenario, an examiner may have the authority to close down a firm and liquidate its assets if its obligations greatly exceed the company's means.

Aside from checking cash reserves, an insurance examiner has to inspect the policies that a firm issues to ensure that these contracts are in compliance with local or national policy writing regulations. In some nations, examiners can assess fines and other penalties on firms that violate industry rules. Additionally, examiners can take punitive action against individual agents or underwriters who violate professional code of conduct rules.

In some areas, firms cannot sell life insurance policies such as annuities until an examiner has reviewed all of the documentation related to the product. Some major firms are allowed to sell policies in some areas that fall foul of regulatory requirements in other regions. Aside from rejecting or approving new product offerings, examiners can also advise insurance firms on making alterations to policies so that those products meet industry standards.