Insurance Industry Expertise

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1 Insurance Industry Expertise Delivered With High-Level Attention and Service Audit Tax Advisory Risk Performance The Unique Alternative to the Big Four

2 For more than 50 years, clients in all sectors of the financial services industry have relied on Crowe Horwath LLP. Crowe is one of the largest accounting and consulting firms in the United States. We provide audit, tax, advisory, and risk services to insurance companies of all sizes and specialties.

3 Insurance Industry Expertise Delivered With High-Level Attention and Service Crowe Insurance Industry Services: Nationally Recognized and Respected Drawing on decades of experience, Crowe delivers an extensive range of industry-focused services that help provide insurance companies with the technical expertise and thought leadership they need. Crowe serves insurance industry clients specializing in: Property and casualty Workers compensation Warranty Medical malpractice Life Health Professional and general liability Health maintenance organizations (HMOs) Captive companies and risk retention groups Managing general agents and risk intermediaries Crowe insurance services professionals actively participate in the Risk and Insurance Management Society (RIMS), the Insurance Accounting & Systems Association (IASA), The Institute of Internal Auditors (IIA), and other relevant industry forums, and they are knowledgeable in statutory accounting principles promulgated by the National Association of Insurance Commissioners (NAIC). They also maintain professional relationships with many state regulatory agencies and departments of insurance. 3

4 Crowe Horwath LLP What Sets Crowe Apart Beyond industry experience and impeccable credentials, the Crowe approach to client service emphasizes three crucial characteristics: Direct senior-level involvement. As a Crowe client, you can expect firsthand attention from experienced insurance industry professionals. In-depth industry knowledge. By aligning our professionals along industry lines with no geographic constraints, we are able to add depth and breadth of knowledge to our solutions. This makes it possible for us to bring in specialized talent and experienced people from anywhere in the firm to help meet your particular needs. An investment in efficiency and technology. Crowe continually invests in new, highly specialized teams, processes, and technologies that drive efficiencies in our processes. Examples include automated work papers (AWP), which enable us to perform a paperless audit, and Crowe Information Request Tracker (CiRT ) solution, a secure Webbased repository for auditor and tax preparer information requests. An Exceptional Client Experience At Crowe we continually focus on delivering the highest levels of service to our clients. We hold ourselves accountable, surveying our clients regularly to help us understand how we can improve their experience and earn their trust and recommendations. In our most recent survey results, Crowe achieved an 88 percent client engagement index. Engaged clients are those who agree they really like working with us, are likely to continue to use us, would go out of their way to keep working with us, and will recommend us to colleagues. According to the survey administrator, Crowe scored 33 points above the industry benchmark in this critical measure. 1 1 Most Engaged Customers business-to-business survey, accounting and tax, PeopleMetrics Inc., 2013, b2b_accounting_download 4

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6 Crowe Horwath LLP Audit Services Choosing the right professional services firm means you can be confident you are receiving objective, credible information to help guide your critical management decisions. Crowe Insurance Industry Audit Services Statutory and GAAP financial statement audits SSAE 16 audits Benefit plan audits Crowe Insurance Industry Assurance Services Medicare cost plan agreed-upon procedures Sarbanes-Oxley/Model Audit Rule consulting Forecasts and projections Agreed-upon procedures 6 Based on our track record of providing comprehensive and cost-effective audit solutions, Crowe enjoys an excellent reputation both within the insurance industry itself and among regulators. In 2013, A.M. Best Co. listed Crowe in the top tier of property and casualty auditors, ranking Crowe 11th among all independent accounting and auditing firms in the United States and Canada, based on total property and casualty loss reserves held by its clients. Crowe ranks number 11 among all U.S. and Canadian accounting and audit firms serving property and casualty insurance providers. Source: A.M. Best Co., July 2013 Competence, Consistency, and Objectivity At Crowe we begin by seeking to understand your company, your marketplace, your industry, and your operations. Crowe maintains high audit proficiency through consistency of staff and continued training, and we incorporate innovative technology solutions to enhance audit efficiency, facilitate the process, and reduce disruptions. These secure technology tools help expedite the transfer and analysis of large amounts of financial data through the use of shared databases, an automated work paper system, Web-enabled project tracking, and secure data sharing. Crowe strives to maintain the highest levels of professional audit quality. To achieve this quality level, the firm has developed an internal quality control system led by the assurance professional practice group, which is independent from the personnel in the audit practice. In addition, for audits of private companies, we undergo an independent peer review once every three years. For public companies, we are subject to annual inspection by the Public Company Accounting Oversight Board (PCAOB), as established by the Sarbanes-Oxley Act of Because we serve as auditor for more than the legislatively established threshold of 100 public companies, we are inspected by the PCAOB annually instead of triennially.

7 Insurance Industry Expertise Delivered With High-Level Attention and Service Tax Services In addition to its complexity, tax law also has a potentially significant impact on an insurance company s growth strategies, earnings, and shareholder value. Regulatory and legislative changes increase the challenge, and dealing with multiple jurisdictions requires specialized knowledge to comply fully with tax laws. Crowe Insurance Industry Tax Services Federal tax consulting Consulting on multistate premium, income taxes, and local taxes Federal and state tax compliance Tax outsourcing Assistance with captive insurance company structuring and formation Crowe is a trusted resource for comprehensive tax services with wide-ranging experience in a variety of insurance industry tax-planning and compliance issues and tax-accounting and disclosure requirements. Whether yours is a domestic company, a more diverse U.S. multinational company, or a foreign multinational company with operations in the United States, Crowe can assist in identifying opportunities to minimize tax burden, reduce effective tax rates, create additional cash flow, and increase stakeholder value. Strengthening Compliance While Helping to Reduce Tax Burden Crowe provides insurance businesses with tax services delivered with an independent perspective and a thorough understanding of their critical issues. Our tax professionals have experience in compliance and regulatory issues including state nexus issues and premium tax filing considerations. Crowe can also assist with analysis and documentation of internal control procedures to help build a foundation for effective tax planning, helping to minimize federal and state tax expense while mitigating risk and compliance costs. Crowe tax teams include professionals with valuable experience working with the Internal Revenue Service and state tax agencies. Drawing on their many years of experience in the financial services industry and tax consulting, the Crowe team understands the importance of prompt resolution of tax controversies. Because the Crowe insurance services teams dedicate their professional time to working in the industry, they can offer insight into taxation issues that affect insurance companies. Our senior practitioners review each return to help our clients take advantage of appropriate tax-saving opportunities. As a member firm of Crowe Horwath International, Crowe also links multinational organizations to a global network of capabilities for transfer pricing, cross-border transactions, foreign tax credits, and other complex multijurisdictional tax issues. Our goal is to identify new opportunities for our clients to save global tax dollars to improve bottom-line results. 7

8 Crowe Horwath LLP Advisory Services Filing claims or resolving disputes related to complex commercial damages, business valuation, recovery, and retrieval of electronic evidence requires the expertise of a proven multidisciplinary team with extensive industry-specific experience. Crowe Insurance Industry Advisory Services Medicaid pricing reviews Damage assessments, including business interruption Claims processing and management Settlement fund administration Fraud investigation Insurance disputes expert consulting and testimony Neutral determinations Crowe gives insurance providers access to accountants, analysts, and examiners with the experience and credentials needed to assist you in preparing, documenting, presenting, and negotiating settlements related to a variety of insured losses. We understand the demands of claims processing and deliver your project on time and with the quality standards required by insurers, courts, government agencies, and attorneys. Insurance Industry Expertise You Can Count On Crowe professionals work with our clients to provide practical advice based on our specialized knowledge of the industry. We help you analyze intricate financial data, weave it into a cohesive whole, and, if necessary, articulate the findings for legal proceedings. The Crowe delivery model is based on providing highly focused service through local direct contacts. This personal service is then blended with expertise that is drawn from the entire Crowe national organization. The result is a unique blend of local attention and national experience. 8

9 Insurance Industry Expertise Delivered With High-Level Attention and Service Risk Services Managing risk across the entire enterprise is one of the most difficult challenges most insurance executives face. Managing the risks from inadequate internal controls and regulatory compliance challenges to fraud, data security, and financial reporting requirements requires specialized expertise and a proactive risk management approach. Crowe Insurance Industry Risk Services Corporate governance Enterprise risk management Sarbanes-Oxley/Annual Financial Reporting Model Regulation (Model Audit Rule) implementation and outsourcing Internal audit IT audit Regulatory compliance IT security and privacy Fraud prevention Third-party risk management Crowe is widely recognized as one of the largest risk consulting firms worldwide, making Crowe an endto-end provider of governance, risk, and compliance services our clients depend on. By evaluating significant business risks that are unique to the insurance industry and each specific organization, Crowe helps insurance companies improve management effectiveness, increase confidence of regulators and stakeholders, and reduce the cost of capital. Managing Risk for Competitive Advantage At Crowe we recognize that managing business risk is really about improving business performance. So we designed our Corporate Governance Framework to help organizations work toward the rewards of enterprise risk management. Crowe risk consulting professionals work with some of the best-known insurance providers. We understand the needs of organizations large and small and tailor our services to each company s specific needs. The Crowe risk management approach helps you measure where you stand today and recognize where improvements could benefit your organization and its stakeholders. Then, applying a proactive and practical enterprise risk management approach, our highly trained IT, forensic, and internal audit specialists combine proven technologies and effective processes to help you improve risk management and operational efficiencies while also strengthening corporate governance and regulatory compliance. The comprehensive risk management solutions Crowe offers also can strengthen your organization s business intelligence and protect intellectual property while reducing complexity in complying with the thousands of industry regulations that so often pose challenges to insurers. The combined effects of these programs can include reduced costs, improved accuracy, enhanced customer service, and improved financial performance. 9

10 Crowe Horwath LLP Captive Insurance Services Facing rising costs and risks of doing business, a growing number of companies are creating captive insurance companies as an alternative risk-financing solution. In addition to compliance with state regulatory agencies in various domiciles, operating a captive insurer presents numerous financial and operational challenges that require experience, insight, and deep industry knowledge. Crowe Captive Insurance Company Services Financial statement audit services including statutory and GAAP reporting* *Financial statement audits may limit our ability to perform additional services for the same client. Tax services including federal and state tax returns, ownership and organizational structure guidance, and transaction consulting Advisory services including loss portfolio transfer (LPT) planning and consultation and Medicaid pricing reviews, validation, and processing Risk services including a complete team that can provide a thorough enterprise risk management assessment and feasibility study during the captive formation Crowe consultants have the knowledge, skills, and experience to help businesses establish a captive insurance company and optimize its performance. Our governance, risk, and compliance teams understand the unique aspects of both single-parent and group captive insurance companies and have extensive experience working with captive insurance companies of all sizes to identify the ideal coverages, domiciles, and vendors for each company s specific needs. From gauging strategic trade-offs and providing in-depth financial analysis to setting up the policies and procedures to support efficient operations and regulatory compliance, our risk, performance, and tax services can help companies establish and operate a captive insurance company. Solutions for Captive Insurers Crowe is uniquely positioned to meet the needs of captive insurance companies, offering an independent perspective that can make it easier to evaluate the multitude of available captive insurance options to determine the most appropriate captive solution from both a tax and an operational perspective. In addition to providing highly valued governance, risk, and compliance services, Crowe also can help address a full range of operational challenges, including filing claims and resolving disputes related to complex commercial damages, business valuation, recovery, and retrieval of evidence. For companies with already established captive insurance programs, our auditors can provide credible, objective financial statement audit services including statutory and GAAP reporting. Crowe has developed strong relationships with state insurance departments, captive managers, and third-party service providers. Our insurance specialists monitor the latest developments related to industry regulations, reporting standards, and techniques; actively participate in numerous professional and industry organizations; and interact regularly with regulatory agencies at both the federal and state levels. 10

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12 Contact Information We invite you to learn why many insurance companies have turned to Crowe as their preferred provider for audit, tax, advisory, risk, and performance services. Contact Ken Wills at or or visit Crowe Horwath LLP, The Unique Alternative Crowe Horwath LLP ( is one of the largest public accounting and consulting firms in the United States. Under its core purpose of Building Value with Values, Crowe uses its deep industry expertise to provide audit services to public and private entities while also helping clients reach their goals with tax, advisory, risk, and performance services. With a total of more than 3,000 personnel, Crowe and its subsidiaries have offices coast to coast. The firm is recognized by many organizations as one of the country s best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest global accounting networks in the world, consisting of more than 150 independent accounting and advisory services firms in more than 100 countries around the world. When printed by Crowe Horwath LLP, this piece is printed on Mohawk Color Copy Premium, which is manufactured entirely with Green-e certified wind-generated electricity. Crowe Horwath LLP is an independent member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International Crowe Horwath LLP FIA14029