COST OF INSURANCE DEPARTMENT EXAMINATIONS

Pursuant to 31 Pa. Code §12.1 et seq., Insurance Department examinations are conducted to verify the financial condition of the examinee and ascertain whether the examinee has complied with the laws of the Commonwealth.  Section 907 of the act (40 P. S. §  323.7) provides that the expenses incurred in and about the examination of an entity, including compensation of Department employees assisting in an examination and other professionals or specialists retained as examiners, shall be charged to and paid by the examinee.

Charges are payable by the examinee for the time period in which a Department examiner, another Department employee or another professional or specialist is engaged in examination work pertaining to that examinee, regardless of whether the examiner, employee or other professional or specialist is physically present at the examinee’s business site.

Prior to or contemporaneous with commencement of an examination, the Department will disclose to each examinee the general information relating to how the examination will be conducted and how it will impact the examinee. The information will include, for example, whether examiners conducting the examination will be lodged near the examinee’s site or travel daily from home or headquarters, consistent with Commonwealth rules on these matters.

Per Diem Charges

Pursuant to 31 Pa. Code §12.4, “per diem” charges for Department examinations, including financial examinations, market conduct examinations and examinations of companies subject to summary proceedings, will be updated annually and published in the Pennsylvania Bulletin.  The most current rates were published in the Pennsylvania Bulleting on Saturday, June 19, 2010.  Charges are calculated in ½ hour units.  The schedule of charges is as follows:

   (1)  Examiner Trainee           =          $326 per day

   (2)  Examiner 1                    =          $424 per day

   (3)  Examiner 2                    =          $514 per day

   (4)  Examiner 3                    =          $623 per day

   (5)  Examination Mgr           =          $689 per day

Per diem charges for examiners and other Department employes will be calculated based on the current salary and benefit level of the examiners or other employees. Per diem charges for examination costs will be calculated and billed in 1/2 hour units.

Additional Examiners

In addition to Department examiners, the Department may utilize the services of other Department employes and may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the cost of which will be charged to and paid by the examinee.  

The Department will require that per diem charges for other professionals and specialists retained as examiners be comparable to prevailing rates for the services.

Travel, Lodging and Food Expenses

In addition to per diem charges, the travel, lodging and food expenses of Department examiners, other Department employees assisting in the examination and other professionals or specialists retained as examiners will be charged to and paid by the examinee.

Charges for travel, lodging and food expenses of Department examiners and employees will be made in accordance with the rules governing employees of the Commonwealth. Charges for travel, lodging and food expenses of other professionals or specialists will be made in accordance with provisions set forth in letters of engagement.

Billing

Billings for examination costs will reflect a cost category for per diem charges and a cost category for travel, lodging and food expense.  Additional detail on costs billed for expenses will be available upon request by examinees.