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2024 SOFE Career Development Seminar session insights
Several of Baker Tilly’s insurance industry specialists recently attended the 2024 Society of Financial Examiner’s (SOFE) Career Development Seminar in Oklahoma City. They hosted sessions on topics ranging from Model Audit Rule (MAR) implementation and optimization to third party risk management, artificial intelligence (AI) and exploring ChatGPT. Below you will find a breakdown of our key takeaways from each of the Baker Tilly-hosted sessions. If you have any questions or comments on these session insights, feel free to reach out to one of our specialists.
- Team motivation often stems from three key items: autonomy, mastery and purpose.
- Effective autonomy may not be the same for all individuals, making it important to understand how to provide the appropriate communication, training and coaching individually.
- Mastery is the urge to get better at something and it’s important to recognize that this will require challenges and failures.
- Purpose is typically the desire to be part of something larger than ourselves making it important to align the individual’s purpose within the team’s purpose.
- Motivation methods can vary and it’s vital to understand how individuals prefer and need communication and training. It is also important to be intentional with our connections with others to stave off feelings of isolation.
- For insurance regulators involved in each stage of the Model Audit Rule (MAR) implementation and evolution journey, it is important to understand what the organization wants from their MAR program and how it is aligned to the organization’s overall strategy.
- There are many key pieces of information that insurance regulators should be aware of, including what risks to look out for when evaluating and examining an insurer’s MAR program.
- For more information on MAR implementation and optimization, refer to our MAR webpage.
- Effective vendor risk assessment will help focus time and resources to the most impactful vendors. This focus will allow stakeholders to take deeper dives into analyzing critical vendors.
- Consider risk factors such as the volume and types of data to which vendors have access, company systems accessed by vendors, how integral the vendor is to operations, the regulatory impact of the vendor, the financial implications of using the vendor (both direct and indirect) and the ability of the vendor to meet the future needs of the organization.
- The integration of vetting the vendors cybersecurity standards to ensure they meet the needs of the company is also an important factor to keep in mind.
- 16 states have either adopted the National Association of Insurance Commissioners’ (NAIC) Principles on the use of AI or have adopted some insurance-focused AI regulation.
- Data governance is the foundation for all AI usage – it is what prevents “garbage in, garbage out”
- There is today and will more so in the future be increased focus on potential bias in the use of AI. Any organization using AI should be considering how they test qualitatively and quantitatively to determine whether they are creating disparate impact to members of a protected class by using AI.
- Check out our insight, The regulatory impacts of AI and ML for the insurance industry, for more information on this subject.
- The NAIC Insurance Holding Company System Regulatory Act requires insurers to submit regular filings to state insurance departments.
- The Form B and Form D filings are required to be in compliance with state insurance laws as well as SSAP 25 and SSAP 70.
- In addition to normal prescribed analyst procedures, examiners can help analysts ascertain compliance with SSAP 25 and SSAP 70 in a variety of ways.
- All major vendors are now supporting some sort of generative AI capability. ChatGPT has become one of the most popular after Microsoft announced a $10B investment in Open AI in 2023 to leverage their platform.
- ChatGPT can be used to generate analysis and provide regulatory recommendations based on data used and prompts manually input by the user.
- For regulatory examinations of insurers, ChatGPT can assist in areas for each of the 7 phases including but not limited to: company overview, environmental scanning, key personnel interviews, risk identification, control testing and effectiveness, sampling techniques, supervisory plan review, exam report drafting and follow-up actions.
