Page History

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Reconciliation (make sure report is correct based on request - reasonability check on the report - NOT financial reconciliation)

• PA - from AAIS Andy can share
• KS - business perspective then fill in gaps
• SC - only think of the financial reconciliation? Does Andy (AAIS) do another? Reconciling statistical to financial by annual statement line and state basis
• Andy - company, line state, matching what get from NAIC, what AAIS does on their side
• KS - mix? req to do all of stat reporting through AAIS thru particularl line/state combo?
• PA - 2 part:
  • 1 lot of ambiguity, first look at stuff and give reasons for why #s vary, adjustment things
  • 2. doing recon, doing company/line, expect with data from them they get line/state combo, do not partially report
• SC - correct, stat agent gen reports ALL of data except where it is statutorially required - MASS says all commercial / auto must for through CAR, AAIS would not have biz from TRV for MASS, when reconciliing would not have lines for state of MASS - no data from TX goes to AAIS, Commercial data to ISO, Personal goes to TICO, surety to SFAA - from that perspective, nothing missing, b/c going to another stat agent, as PA alluded to, always going to be differences - why diff if are diff - ex: homeowners is very close w/o lot of differences
• KS - what causes Diffs?
• SC - so many: journal entries (made to books, journal entry made to books and records), you have big cust that renews at end of year, all the data hasn't gone thru rate-quote-issue-system, SC has nothing, but b/c you know its 12/31, rev has to be booked to that cal year, NAIC financials have $1MM more than stat records - smaller insurers, subsidiary reports to other stat agent, small # of biz, that stat agent doesn't ask TRV to provide anything, Page 14 against what you receive statistically: very off, small %, 1% or 10k (under that) - always historially done reconciliation on their own - 2020, andy could pull page 14 and statistical and SC could provide file, w/ diff by line and by state - state of KY, premium tax booked to premium (statistically they dont report premium tax), so page 14 in KY would have prem included - in NY, Free trade zone, not stat reported BUT IS on the finanicals - international business, coverage of someone abroad but by US company - # of known differences, can identify those and provide this so that AAIS can be comfortable in the reconciliations - waiting, look at it, have questions, wouldn't be phys possible (would gen too many)
• KS - proactively provide reasons why numbers wont match
• AM - not all members do that today
• SC not all need it - smaller and diffs aren't there
• AM - other challenges - TRV stat agent for everying, use AAIS for some and ISO for others, harder to reconcile to NAIC, trying to balance against property annual statements - do stat reports by AAIS stat plan line of business but all reconciliation is byt NAIC stat plan line of business
• KS - why do we have our own?
• AM - do get annual state/line business historically w/ exception of auto, believe are programming to do reconciliation - typically homeowners doesn't matter, sometimes little chunk booked under earthquake, lets look at homeowners, need to look at little things as well
• SC - endorsement? homeowners or dwelling, go to diff line that the base - can get messy (esp fire allied?)
• AM - historically struggled with reconciliation, feed from NAIC is annual, when TRV sends data and AAIS gets feed, can't reconcile  - trying to get faster, sooner, get quarterly data but 1/4 is broken out by company and line or company and state but not company-line-state - struggle in the past: 

<SEAN CHECK RECORDING>

• DH - accrued accounting vs cash accounting
• JB - policy 2 years ago, no claims or adjustments, how know years worth of premium due?
• DH - recorded premium a year ago
• AM - field of month covered
• SC - reconciling: premium stat records to prem financial records / not reconciling in stat reporting  - only recording paying claim if travelers recognized loss
• JB - policy in effect w/ natural premium, couldn't reco collecting if payments intermittent, etrc - policies with committments is there
• SC - if policy cancels, change comes through, offset records, etc.
• JB - if not actually in transaction record
• KS - when do we do, against what data do we do recon
• PA - when first then how?
• PA - when doing right now, is that we get all fin info from NAIC, final form avail 1 year after (
• AM - typtically year after, may/june 2022 we get final of 
• SC - when publish? 2021 -
• AM - april and may get feeds, may/june is final for prev year, to reconcile 2021 data can't recon until May/June 2022 today - first 1/4 2021, due no later than end of may 2021 but can't reconcile until at least a year later
• KS - if recon is a part of our process, how speed it up? shorter than a year?
• DH - wait till end of calendar year for data to be avail - publishing now 2022 data, but books dont close until Mar 2023, when you can do the reconciliation
• JB - pub quarterly to NAIC?
• SC pubbed quarterly, but can reconcile from own systems but what gets pubbed by NAIC is by company/line and by company/state but not company/line/state (per 1/4)
• JB - ask NAIC if they can provide
• giggles
• SC not pubbed that way
• AM - have asked - hard to say realistically which was more valuable
• KS - is after a year pubbed that way?
• SC - is pubbed that way so they have to get it published, get data in files to stat agents takes another month or two
• KS -when can we do Recon
• SC - cannot start until May/June of the following year
• AM - Q1 its been 15 months, 
• DH - what Eric was saying, less concerned about recon, just wants speed of data quicker
• JB - Eric cares when reconciled, wants more info on ongoing basis re: changes in policies/coverage
• SC - interesing when AM said "having to accept the data" - int b/c kind of seperate, stat records are in format, meeting edits and checks, from that perspective these are valid records, but cannot validate its reconciled for almost a year - imp to make distinction ,if you had a customer for a couple years, get stat records, going back to last years recon, if you have a small issue and something missing due to volume but 1/4 homeowners was big change - something not right?
• AM - refer to rules engine, only thing rules engine does "does ea ind record represent itself" - internally making sure before a year, ability to say "member gave us $1mm in premium by 1/2 this quarter - should question it if it drtastically drops or increases
• SC - high level checks can be done - industry isn't AAIS - it is INDUSTRY
• KS - sev months ago, AAIS is by law supposed to do Reconciliation (in the handbook) - WHY?
• PA - annual reports supposed to be reconcileds
• KS - what requires Reconciliation to occur? stat reports, reg reports? data calls?
• JB - once a year check on prev year sanity, their sys of record, draw conclusions,
• SC - believes idea is you have reconciled before  - andy gets 2021 data 3 months ago, reconciliation should be done before annual reports go to states in march - state of CO, could come by and want to know data, will reconcile to own state/lines - data call, doing recon on the data call and sometimes when they get data - not same as process to reconcile all Stat data, recon back to financials only real control any state of bureau has
• KS - expect recon for stat reporting due to timeing, if you try to recon against data call, 2 years ago say "yes been reconciled" but 2 months...
• DH - dont do any recon on data calls, do internally but REGs aren't coming back
• SC - state of CO in Feb asks for 7 pieces of data, they get it, make sure internally matches, big discrepancy theyd come back
• DH - in some calls would have to provide Page 14 and 15
• KS - talking about reqs for openIDL - allow to provide page 14 to respond to data call for a line of business? 
• DH - no its anonymized, wont' know TRV, Hartford, Hanover
• PA - depending on whats going on, situation where state earned Prem, could potentially und that someone was wrongf
• KS - state want AAIS on their node, each one of the results is first reconciled and then returned, if not some error or exception handling
• JB -only certain cases
• KS - support all cases, deal with those too
• JB -report to REG outside of openIDL, or require addl data
• PA - main focus for this group, RR the annual reconciled, goal using this sys that current infras
• KS - have to have reconciliation for part ofd the process for stat reporting, can discuss for data calls - will need funct for some kind of recon, just to do stat reporting
• JB - stat report yes, not for data call
• AM - NAIC, CSV files, 
• KS - NAIC provides data, AAIS subscribes to it - sounds like diff process for data calls vs stat reporting
• PA - both coming from same HDS ideally, both reconciling and validation
• JB - dont use "reconcile", cant happen on every data call
• PA - every year reconcile, every year find bugs
• JB - within tolerance you dont, not adhoc data call
• PA - find out something failed ETL and only have x of earned prem for auto
• KS - dont have financial records yet
• JB - heuristic, "this doesn't look right" but a sanity check
• KS - only biz people like susan know its a bad #
• JB - threshold, something changes by 50% vs 10% questionable
• SC - need to put in reasonability checks, go back and ask
• KS - premium capture when change premium recording by certain amount requires explanations (hit or miss)
• PA - once a year reconciling auto records, same data source making calls from
• KS - exception: when the data calls are happening before
• PA - every year shoring up most recent year
• KS - not going after data call reconciliation right now
• PA - data loaded best of ability trailed by 1/4, a year later "we feel reasonable we got all the data in there"
• KS - some doesn't work, do have to tell thats good (REG can do it, etc.) - tabling that
• DH when providing pg 14 or 15, doing calls now for EOY 2021 data, reconciled to financials, 
• KS - would be covered?
• DH - stat reporting is 2 years lagging
• DH - for data calls today, some are for EOY 2021 data, could reconcile right now as financials published for 2021 - OTHER calls are "what do you have today", we can't provide proof of reconciliation b/c dont have reconciled financials
• <SEAN CHECKS RECORDING>
• PA - missing premium, less data than where supposed to be
• KS - fatfingered extra zero, data misalignment, has to be dealt with, exception path for data to let TRV know their data doesn't match NAIC data and then deal with it
• DH - SC? DOes that happen really? DOing it internally  but dont know what reported back to AAIS
• SC - given to AAIS like ISO, both - built in excel, does have page 14 and transmittal, using either and not the same with AAIS should match, b/c of volume instead of providing x lines of business x 50 states you have mult explanations w/in any one of those - give excel with col for global, col for journal entries, col for NY, col for KY - for any state-line you can see instead of words
• JB - reconciliation matrix

Financial Reconciliation (Oracle? Source of truth to tie against those #s?)

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