Q&A for Specialty Financial Examination Auditing Services BPM054787 2.24.26.pdf

Q&A

SPECIALTY FINANCIAL EXAMINATION & AUDITING SERVICES

RFP Number MIA/FR-25-001 EMMA#: BPM054787

1. Please confirm that we are to submit one proposal, noting which categories we are bidding on, regardless of whether we are bidding on all 5 functional areas or not.

Response: Yes, a proposal that includes more than one functional area will be deemed a single proposal. However, submission of more than one proposal for a single Functional Area, is not permitted, and the proposals will be determined to be not reasonably susceptible of being selected for award and rejected.

2. Section 2.7 of the RFQ states "An Offeror may propose to perform services in one or more functional areas, but should make sure to address the requirements of each functional area in its proposal." If we are bidding on 4 of the 5 functional areas, how do you want us to address the 5th area?

Response: Offerors are required to address the requirements of each functional area included in their proposal noting which category that they are bidding on. Offerors are not required to address the requirement of any functional area that they are not bidding on.

3. Please confirm our understanding that, similar to the past, each category within our proposal will be evaluated separately, and you plan to award one primary vendor as well as back up vendors for each category. For example, a vendor could be awarded primary vendor in only one category of the proposal (or as many as all 5), but you are not necessarily set on having the same vendor for all 5 categories.

Response: The MIA intends to award up to five separate primary contracts (one for each functional area), and up to one back up contract for each of the five named functional areas. When a single proposal contains multiple functional areas, each functional area will be evaluated separately based on the criteria set out in the RFP. (See Question 8 Response for more information.) A single vendor may be awarded up to a maximum of five primary contracts if it includes all five functional areas in its proposal, but each functional area contract (primary or any back up contract to be awarded) will be awarded separately.

Thus, the contracts may not all be held by the same vendor depending upon the evaluation.

For example, it is possible that one vendor could hold the primary contract for two functional areas, and one back up contract for a third functional area, while each of the remaining primary contracts and back up contracts are each held by different vendors.

4. Attachment R – Corporate Diversity Addendum - The RFP instructions reference Attachment R (Corporate Diversity Addendum) as a proposal attachment if applicable, noting that submission is required only when the resulting State contract has a total value of $1 million or more. Neither the RFP nor the sample contract specify a contract value. Could you please confirm whether Attachment R must be submitted with the proposal or whether Attachment R may be submitted post‑award if the resulting contract meets or exceeds the $1 million threshold?

Response: The contract value is determined by the financial proposal of the successful offeror (intended contract awardee). If one is required, Attachment R only needs to be submitted by the intended awardee upon Notice of Recommendation for Contract Award.

5. To clarify, is the RFP for specialty examination services only, not for the broader financial examinations?

Response: MIA/FR-25-001 eMMA#:BPM054787 - Specialty Financial Examination & Auditing Services RFP pertains to the 5 functional areas as listed in the RFP. 1. Actuarial Property & Casualty, 2. Reinsurance, 3. Information Technology, 4. Actuarial Life & Health, 5. Investments. The MIA holds separate contracts for general examination services.

6. The historical hours expended as shown on page 8 of the RFP do not seem to line up directly to the anticipated hours shown on page 11 of the RFP. Am I understanding this information correctly?

Response: The historical hours included in RFP Section 2.2.2 are for informational purposes only and are based upon the hours that were used per functional area under the MIA’s prior contract. The anticipated hours shown on page 11 of the RFP (Section 2.3.1B) reflect the anticipated hours needed under the pending procurement. Again, no hours are guaranteed.

7. Page 15 of the RFP states “Key personnel shall be assigned to the State of Maryland as a dedicated resource.” Our people work on behalf of a number of states. Can you clarify the Maryland expectation regarding dedicated resources?

Response: We understand that Contractors work on behalf of a number of States. When working on a Maryland exam, our expectation is the personnel you assign to that Maryland examination is dedicated to work on the Maryland examination only.

8. If we submit both actuarial and IT services within a single proposal, will these functions be evaluated independently, or will the proposal be considered as a single, inseparable submission? In other words, is it possible for the actuarial portion to be awarded even if the IT portion is not? Do we need to submit separate responses for each Functional Area?

Response: You are required to include in a single proposal each functional area that you are competing for, and should address the qualifications and requirements for each functional area clearly listed as directed in the RFP. Each Functional Area listed in the RFP will be evaluated independently.

Thus, if a technical proposal includes more than one (1) functional area, as long as each functional area is clearly identified in the proposal and you properly identify how you meet the requirements, educational, designation, and experience listed in the RFP for that specific functional area which you are competing for, it will be evaluated for each of listed functional areas, and would be eligible for contract award for either the primary or, if any is awarded, the back-up contract for each of the specified functional area(s).

9. In Section 2.2.2 (Historical Information), the RFP provides historical contractor hours expended from October 2018–September 2023 (five‑year totals), while Section 2.3.1.B provides anticipated annual hours for the upcoming contract term. We noticed that when the historical hours are annualized, they are significantly lower than the anticipated annual hours.

a. To help us better understand and plan appropriately, could the State clarify what is driving these increases (i.e., more insurers domiciled in Maryland, expectation of utilizing contractor more)?

Response: The estimated annual hours are an estimate only and reflect potential MIA needs, which may vary based on the complexity of the specialty area(s) of examination, internal staffing shortages and lack of internal knowledge of a specific functional area at any time during the contract term.

b. Additionally, since the RFP states that the contractor must be able to provide personnel for the anticipated hours, should the anticipated hours be interpreted as realistic expected usage, workload maximums, or planning estimates?

Response: The anticipated hours are planning estimates only, and no hours are guaranteed. The MIA’s actual needs may change over time subject to a number of factors, including but not limited to, for example, MIA staffing levels and levels of expertise.

10. Who is the incumbent actuarial firm(s) and how long have they been performing the services outlined in this RFP?

Response: The incumbent actuarial firms are:

1. Primary: Lewis & Ellis, Inc., Property & Casualty/Life & Health

2. Back-up: INS Regulatory Insurance Services, Property & Casualty

3. Back-up: Risk & Regulatory Consulting, LLC, Life & Health

These firms have provided contractual services since September 6, 2018.

11. Who were the last 3 actuarial firms that worked on this contract and how long did they perform the work described in this RFP?

Response: The actuarial firms that held contracts under the prior RFP are listed below by functional area:

1. Property & Casualty Actuarial Services: Lewis & Ellis (Primary); INS Regulatory Insurance Services Inc. (Back-Up)

2. Life & Health Actuarial Services: Lewis & Ellis (Primary); Risk and Regulatory Consulting LLC (Back-Up)

3. Information Technology Services: Risk and Regulatory Consulting LLC (Primary); INS Regulatory Insurance Services Inc. (Back-Up)

4. Reinsurance Services: INS Regulatory Insurance Services Inc. (Primary); Risk and Regulatory Consulting LLC (Back-Up)

5. Investment Services: INS Regulatory Insurance Services Inc. (Primary): Baker Tilly (Back-Up)

12. What were the total fees charged by the prior firm(s) for each of the past 5 years for the services defined in this RFP?

Response: The Contract amount is broken down based on each Functional areas for a 5 years contract.

Primary - Lewis & Ellis P&C Contract awarded $1,572,500

Back-Up - INS Regulatory Insurance Services Inc. P&C Contract awarded $2,354,500

Primary - Lewis & Ellis L&H Contract awarded $1,665,000

Back-Up - Risk and Regulatory Consulting LLC L&H Contract awarded $1,800,000

Primary - Risk & Regulatory Consulting LLC Information Technology Contract awarded

$2,025,000

Back-Up - INS Regulatory Insurance Services Inc. Information Technology Contract awarded

$2,275,000

Primary - INS Regulatory Insurance Services Inc. Reinsurance Contract awarded $467,500

Back-Up - Risk and Regulatory Consulting LLC Reinsurance Contract awarded $405,000

Primary - INS Regulatory Insurance Services Inc. Investment Contract awarded $567,500

Back-Up - Baker Tilly Investment Contract awarded $497,500.

13. What were the hourly rates charged for the most recent contract year of the Incumbent firms?

Response: Hourly rates are confidential commercial information and may not be disclosed. See MD Annotated Code, General Provisions Article, Section 4-335.

14. Are there any improvements or additional services that the State of Pennsylvania is seeking in its relationship with the actuarial consultant?

Response: This Solicitation is for the State of Maryland. All of the services being requested are fully described in the Maryland Insurance Administration’s Specialty Financial Examination & Auditing RFP.

15. Is it possible to receive the incumbent actuarial firm’s proposal for the last time this contract went out to bid?

Response: This request is being handled as a Maryland Public Information Request. The request is under review to be posted separately at a later date so the Q&A response isn’t delayed.

16. In Table A – Attachments and Documents required with the Proposal, the description for Tab F states that “the Offeror shall address each RFP requirement (RFP Section 2) in its technical proposal.” Can you please clarify how a firm is to respond to section 2.1, 2.2, 2.6, and 2.7?

Response: 2.1 is the Summary Statement and 2.2 is Background and Purpose. No responses needed. Offerors are required to respond to the requirements set forth in both the IT and Professional Supplemental when submitting Technical Proposals.

2.7 Multiple Functional Areas in a Single Proposal

Response: Each Offeror is required to include in a single proposal each functional area that it is competing for, and should address the qualifications and requirements for each functional area clearly listed as directed in the RFP. Thus, a single proposal may include up to a maximum of five functional areas, or it may also include only one functional area, at the discretion of the Offeror. Each Functional Area listed in the RFP will be evaluated independently.

Thus, if a technical proposal includes more than one (1) functional area, as long as each functional area is clearly identified in the proposal and the proposal properly identifies how the Offeror meets the requirements, educational, designation, and experience listed in the RFP for that specific functional area, it will be evaluated for each of listed functional areas, and would be eligible for contract award for either the primary or, if any is awarded, the back-up contract for each of the specified functional area(s).

When an Offeror elects to include more than one functional area in its proposal, the proposal will be treated as a single proposal, and not as multiple alternative proposals which are not allowed.

17. Please clarify whether Tab G of the Proposal intended to mostly reiterate the information provided in section 2.4 (Offeror Experience and Personnel Requirements). If not, please specify how the description of relevant qualifications and experience should differ between Tab G and Tab F.

Response: The requirements set out in the various Tabs establish the minimum requirements for the Technical Proposal and what information and/or documentation must be included with the Technical Proposal so that the MIA can evaluate the degree to which the Offeror meets the requirements set out in the RFP (see Sections 1 through 3 of the RFP, and any documents incorporated by reference therein, including but not limited to the

Information Technology Services Supplemental and Professional Services Supplemental).

By way of example, Tab G sets out what the proposal should address and include by way of documentation with regards to the Offeror’s ability to meet the RFP’s requirements for Experience and Qualifications of Proposed Staff as set out in RFP Section 2.4. While there may be some repetition though depending upon how an offeror addresses the work plan requirements for Tab F and other items requested for Tab F, Tab G should not simply reiterate the information provided under Tab F, but instead should address each of the items listed for Tab G on pages 36 to 37 of the RFP.

18. Please clarify whether section 2.6 (Supplemental Category of Work Requirements and Responsibilities) and the attached IT Supplemental and Professional Services Supplemental are required for all bidders, or only those intending to provide services in the Functional Area “Information Technology Services (I.T.)” referenced in section 2.3.1? For example, is it required that a firm performing actuarial functions pass a SOC 2 audit to be able to perform these services?

Response: Section 2.6 (Supplemental Category of Work Requirements and Responsibilities) and the attached IT and Professional Services Supplemental are required for all Offerors, not just those including the IT Functional Area in a proposal.

19. Regarding section 2.7 (Multiple Functional Areas in a Single Proposal), please clarify whether the bidder is expected to [include] all items in Section 2 for each functional area that the bidder proposes to perform services, or just section 2.3 (Contractor Responsibilities and Tasks)? If responses are required to all-subsections, can you please provide details on how a bidder should respond to sections 2.1, 2.2, 2.4, and 2.5?

Response: Section 2.1 is the Summary Statement, 2.2 is Background and Purpose and Section 2.5 is the Substitution of Personnel procedures and requirements. No responses are needed for these Sections.

If a proposal includes more than one functional area, the Offeror should address the requirements in Section 2.4.1 and 2.4.2 for each functional area included in its proposal.

Please note that Section 2.4.1 requires that the Offeror’s personnel have a minimum of ten

(10) years of experience (cumulatively) providing services of the type required under this RFP and that the Offeror demonstrate an understanding of and experience in the Risk Focused Examination approach. The discussion of 2.4.1 should address this experience as it pertains to each functional area being proposed.

The requirements in Sections 2.4.3 to 2.4.7 only apply to the named functional area. For example, the Offeror would address the requirements in Section 2.4.3 only if the proposal includes the Actuarial Services Property and Casualty Functional Area. If that proposal also includes Investment Services Functional Area, then it should also address the requirements in Section 2.4.7.

Section 2.4.8 through 2.4.11 establish contract conditions and do not require any response.

20. Regarding the requirements listed for Tab G (Experience and Qualifications of Proposed Staff), please clarify what specifically should be included in “letters of intended commitment to work on the project”.

Response: The “letter of intended commitment” required under Tab G (Experience and Qualifications of Proposed Staff), is a letter from the Offeror certifying that it intends for the proposed staff listed in the technical proposal to perform services in the designated Functional Area(s) for the duration of the Contract term if the Offeror is awarded a contract. Offerors are reminded that any substitution of personnel after proposal submission- whether before or after contract award- is subject to the requirements in Section 2.5 of the RFP.

21. Can an example be provided of how to fill out “1-Response # 1-Response Pricing Form”? If the proposer has hourly rates by personnel type, how should this be entered?

Should the proposer use 1 hour as the quantity?

Response: The below example is for sample purposes only, and uses the estimated number of hours from the Financial Proposal Form in Attachment B-1. The Offeror’s proposed fully loaded fixed hourly rate is determined in the sole discretion of the Offeror, and may vary for each year of the Contract, or remain the same for each year. The Financial Proposal form must be filled out for each Functional Area included in the Proposal; the pricing information for functional areas that are not included in the Offeror’s proposal should be left blank. Hourly rates by personnel type or labor category are not permitted; the RFP requests a single all inclusive, fully loaded fixed hourly rate (FLFHR) for each year of the contract for each Functional Area included in the Proposal. See RFP Appendix 1 for the definition of this term.

Example Assumptions:

• The only functional area included in the proposal is Actuarial Services- Life and Health

• The estimated number of hours per year is 5000 hours; this number is provided in the Financial Proposal Form and should not be altered.

• Fully Loaded Fixed Hourly Rate (FLFHR) per year and Total Proposal Price is automatically calculated in the excel spreadsheet so the Offeror only needs to insert their proposed FLFHR

Actuarial Services- Life and Health

Year 1 5000 hrs x (insert Offeror’s proposed FLFHR) =FLFHR /year

Year 2 5000 hrs x (insert Offeror’s proposed FLFHR) = FLFHR /year

Year 3 5000 hrs x (insert Offeror’s proposed FLFHR) = FLFHR /year

Year 4 5000 hrs x (insert Offeror’s proposed FLFHR) = FLFHR /year

Year 5 5000 hrs x (insert Offeror’s proposed FLFHR) = FLFHR /year

Total Proposal Price= sum of FLFHR for all five years

22. [RFP Section 2.5.1(A) states that:] “Key Personnel shall be assigned to the State of Maryland as a dedicated resource." Please clarify whether the expectation is that:

Key Personnel can only work on projects related to this RFP for the duration of the contract, or

Key Personnel must be available to the State of Maryland at all times but can also work with other state insurance departments to the extent that there are no immediate needs on projects related to this RFP.

Response: Key Personnel must be available to the State of Maryland at all times, but can also work with other state insurance departments to the extent that there are no immediate needs on projects related to this RFP.