Addendum #1 - Answers to vendor questions.pdf
PDF 72 KB Posted
- Attached to
- Financial Exam of Health Plan Group
- Solicitation number
- ARFQ 0704 INS2700000001 2
- Issued by
- Kanawha County, West Virginia
About this file
This is Addendum #1 to a Request for Qualifications (RFQ INS2700000001) issued by the West Virginia Office of the Insurance Commissioner for a financial examination of Health Plan Group, which includes The Health Plan of West Virginia, Inc. and THP Insurance Company. The examination will encompass a comprehensive financial review with particular focus on actuarial risk assessment across both Reserving and Pricing/Underwriting key functional activities, as well as IT general controls and systems. The majority of actuarial procedures will be conducted on a consolidated group basis, though some procedures may be required on an individual company basis due to differing lines of business. The examination will result in a single Report of Examination covering both entities, along with separate Summary Review Memoranda for each legal entity to capture distinct governance, risk management, and operational considerations.
The Health Plan Group operates within a shared IT environment with common IT general controls, managing core IT services internally while utilizing third-party vendors for specific services subject to vendor management oversight. The OIC indicated no prior examination findings as of December 31, 2022, and does not anticipate additional areas of focus beyond those typical for a similar insurance holding company system with two health insurers of comparable financial size and limited geographic footprint. Regarding staffing, the OIC has no objection to the inclusion of assisting examiners who previously worked at the OIC provided they have been separated from the agency for longer than 12 months. No pricing terms, set-asides, funding amounts, or specific contract duration information is provided in this addendum document.
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Text version
ADDENDUM #1
ARFQ INS2700000001 -FINANCIAL EXAMINATION OF:
HEALTH PLAN GROUP,
THE HEALTH PLAN OF WEST VIRGINIA, INC.
THP INSURANCE COMPANY
ANSWER TO QUESTIONS SUBMITTED BY VENDORS
1. Do the entities operate within a shared IT environment and follow common IT general controls? Are core IT services managed internally or provided by third parties?
Response: HPWV and THP (collectively "Companies" or "Health Plan Group" operate within a shared IT environment and have common IT general controls. The Health Plan Group manages its core IT services internally; however, as is typical for health insurance groups of this size, the Companies utilize certain third party vendors for specific services. These third party vendors would be subject to oversight and monitoring as part of the Group's vendor management policy and procedures.
2. Actuarial scope: What actuarial key functional activities are anticipated for the examination? Should vendors assume review of both reserving and pricing/underwriting, and are any additional actuarial areas currently anticipated?
Response: Actuarial Specialists will be responsible for reviewing and performing examination procedures of actuarial risks for both Reserving and Pricing/Underwriting key functional activities.
3. Two-company scope: Should actuarial procedures be performed separately for The Health Plan of West Virginia, Inc. and THP Insurance Company, or may certain actuarial functions be reviewed on a consolidated/group basis?
Response: The OIC anticipates that the majority of actuarial procedures will be conducted on a consolidated/group basis. It is possible that some separate actuarial procedures may be required on an individual company basis due to differing lines of business/products written.
4. Known areas of focus: Are there any prior examination findings, ongoing financial-analysis concerns, or other actuarial or IT areas of focus that vendors should consider when estimating the engagement scope?
Response: There were no examination findings/recommendations made in the Report of Examination as of December 31, 2022. The OIC does not disclose the results of our confidential risk-focused financial analysis in a public document/forum. With that said, the OIC does not anticipate any additional areas of focus when estimating the engagement scope besides what is commonly present for a similar insurance holding company system consisting of two (2) health insurers of comparable financial size, limited geographic footprint, and product offerings.
5. Phases 6 & 7 - Report on Examination: Is it the OIC’s expectation that a Report on Examination will be prepared for both Health Plan of West Virginia, Inc. and THP Insurance Company?
Response: A single Report of Examination will be prepared that encompasses both companies.
6. Phases 6 & 7 Deliverables – Summary Review Memorandum: Is it the OIC’s expectation that a single Summary Review Memorandum can be prepared that includes both Health Plan of West Virginia and THP Insurance Company, or does the OIC expect a Summary Review Memorandum for each legal entity?
Response: The OIC prefers a separate Summary Review Memorandum (“SRM”) be prepared for each legal entity. The OIC anticipates that significant efficiencies will be present for THP’s SRM due to (i) single corporate governance function, (ii) single enterprise risk management framework, and (iii) certain group/enterprise risks present at the parent company (i.e. HPWV) level presenting identical contagion risk to the subsidiary insurer.
7. Common IT Environment: Should the IT examination account for two separate IT environments, or does the Group operate on a common platform and follow a common set of operational practices?
Response: HPWV and THP operate within a shared IT environment and have common IT general controls. The Health Plan Group manages its core IT services internally;
however, as is typical for health insurance groups of this size, the Companies utilize certain third-party vendors for specific services. These third-party vendors would be subject to oversight and monitoring as part of the Group’s vendor management policy and procedures.
8. Staffing – Prior WV Employee: Is the OIC opposed to us including an assisting examiner that worked at the OIC over 3 years ago?
Response: The OIC has no concerns with the vendor using a prior-OIC employee that has been separated from the OIC longer than 12 months.
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