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Notice of Requests for Proposals

Actuarial Services, CPA Services, Insurer Examination Services, and Computer Audit Services

Contact: Reyn Norman, General Counsel



5/2/2007

[Notice issued May 2, 2007]

[Notice revised May 23, 2007]

The Alabama Department of Insurance (DOI) hereby gives notice of the issuance of Requests for Proposals (RFP) for qualified respondents to provide the DOI with the following professional services:

  • Property and Casualty Actuarial Services
  • Life and Disability Actuarial Services
  • Certified Public Accountant Services
  • Insurer Examination Services
  • Computer Audit Services

Contracts are contemplated to be awarded for the term October 1, 2007, through September 30, 2008. Responses to the RFP must be received not later than June 1, 2007, at 3:00 PM CDT. Each RFP is made up of four individual documents (three in the case of CPA services), as follows: The RFP, the basic contract contemplated (which is Exhibit “A” to the RFP), the confidentiality agreement for use of TeamMate® software (which is Exhibit “B” to the RFP for all but CPA services), and a Disclosure Statement. All four documents (three in the case of CPA services) must accompany any response.

Additional information is set forth in the attached files, each accessible in either Word or Adobe format, as indicated:

  • RFP for Professional Actuarial Services for Property and Casualty Insurance: Word | Adobe

    Exhibit A, Form Contract for P&C Actuary: Adobe

    Exhibit B, Confidentiality Agreement: Word | Adobe

  • RFP for Professional Actuarial Services for Life and Disability Insurance: Word | Adobe

    Exhibit A, Form Contract for L&D Actuary: Adobe

    Exhibit B, Confidentiality Agreement: Word | Adobe

  • RFP for Professional CPA Services: Word | Adobe

    Exhibit A, Form Contract for CPA Services: Adobe

  • RFP for Professional Insurer Examination Services: Word | Adobe

    Exhibit A, Form Contract for Examiner Services: Adobe

    Exhibit B, Confidentiality Agreement: Word | Adobe

  • RFP for Professional Computer Audit Services: Word | Adobe

    Exhibit A, Form Contract for Computer Audit Services: Adobe

    Exhibit B, Confidentiality Agreement: Word | Adobe

The Disclosure Statement can be accessed from the Attorney General’s web site at the following address: http://www.ago.state.al.us/ag_items.cfm?Item=70

For the procedures and forms for foreign corporations to qualify to do business in the State of Alabama, please visit the web page for the Alabama Secretary of State at http://www.sos.state.al.us. The direct link to the page regarding foreign corporations is http://www.sos.state.al.us/business/forqual.htm.

For additional information, please send an E-Mail request to Reyn.Norman@insurance.alabama.gov

REVISIONS TO THIS NEWS RELEASE AND RESPONSES TO QUESTIONS WILL BE POSTED BELOW.

  • All RFPs – Regarding Current Contractors.

    Question: What firms are currently under contract with the DOI to provide the services covered by the RFPs and how long have they provided services to the DOI?

    Answer: The following table provides the requested information:

    ContractorServiceYears
    Actuarial Resources CorporationL&D Actuaryover 5
    AGI ServicesL&D and P&C Actuary1
    Bostick/Crawford Consulting Group, LLC Examiner1
    Carr Riggs & Ingram, LLCCPAover 5
    Examination Resources LLCExaminer3
    INS Regulatory Insurance Services, Inc.Examiner and L&D Actuary1
    Insurance Logic, Inc. Examinerover 5
    Jennan EnterprisesEDP Examiner1
    J.T. Holland & AssociatesEDP Examiner1
    Latta, Langston & DyerL&D Actuaryover 5
    Merlinos & Associates, Inc. P&C Actuaryover 5
    Reinsurance Solutions International LLCEDP Examiner1
    Taylor Chandler LLCCPA4
    Taylor-Walker & Associates, Inc. P&C Actuary
    L&D Actuary
    over 5
    Wilson, Price, Barranco, Blankenship & Billingsley, P.C.CPAover 5

  • All RFPs – Regarding Scope of Work.

    Question: Has the scope of work changed since the previous RFP was issued?

    Answer: No.


  • All RFPs – Regarding Current Contractors.

    Question: Please provide the most current contracted rates being paid to contractors providing similar services.

    Answer: A list of the current contractors is provided above in response to another question. The contracts currently in use are substantially similar to those posted for use next year. We respectfully decline to provide the specific amounts paid to the current contractors; however, the current range of hourly fees for each service is shown below:

    Professional ServiceHourly Fee Range
    L&D Actuary
    L&D Actuary, Level I, Market Conduct$100
    L&D Actuary, Level I, Other than Market Conduct$120 to $250
    L&D Actuary, Level II, all services$180 to $185
    L&D Actuary, Student, 3-5 years experience$100 to $120
    L&D Actuary, Technical Support$80 to $135
    L&D Actuary, Level I, Market Conduct$100
    L&D Actuary, Administrative Assistant$40
    P&C Actuary
    P&C Actuary, Level I$160 to $190
    P&C Actuary, Level II$125 to $160
    P&C Actuary, Student over 3 years$100 to $130
    P&C Actuary, Student 0-3 years$95
    P&C Actuary, Technical Support$70 to $135
    P&C Actuary, Administrative Assistant$40
    Insurer Examination
    Market Conduct Examinations:
    Examiner$80
    Accredited Examiner$110
    Certified Examiner$115
    Computer Audit Specialist$125
    Supervising Examiner$125
    Actuarial Examiner$195
    All other Examinations:
    Examiner$85 to $100
    Accredited Examiner$100 to $115
    Certified Examiner$105 to $125
    Computer Audit Specialist$110 to $150
    Supervising Examiner$110 to $150
    Actuarial Examiner$145 to $270
    CPA
    CPA, Level I$82 to $150
    CPA, Level II$82 to $100
    Computer Audit
    Computer Audit Specialist$65 to $120

  • All RFPs – Regarding Contractor’s Liability.

    Question: Does the State of Alabama provide immunity to companies contracted to perform financial examinations such as immunity from any statements made or conduct performed in good faith while providing these services.

    Answer: No.


  • Actuary RFPs – Regarding Current Contractors.

    Question: Can we get a copy of the proposal of the last successful bidder?

    Answer: A list of the current contractors is provided above in response to another similar question. The contracts currently in use are substantially similar to those posted for use next year. We respectfully decline to provide a copy of proposals submitted by other bidders.


  • Actuary RFPs – Regarding Current Contractors.

    Question: Can we get a copy of the most recent actuarial report?

    Answer: A list of the current contractors is provided above in response to another similar question. Typically the “actuarial report” is a part of an overall report of examination of an insurance company. All examination reports conducted over the last several years are posted on the DOI Web site under the “Companies” heading. We respectfully decline to provide specific actuarial reports provided.


  • All RFPs – Written Questions.

    Question: I am aware that there is a deadline of May 18, 2007 for receipt of questions about this RFP, and that the questions have to be written. Does email qualify as written, or is surface mail necessary?

    Answer: Questions should be written and transmitted via either facsimile or electronic mail. This requirement is set forth in each RFP in paragraph 1.7.


  • Computer Audit RFPs – Regarding TeamMate® software.

    Question: It is understood that the firm would have to own TeamMate software in order to perform the examinations. However, would references regarding firm personnel's experience using and supporting TeamMate on state examinations meet that objective without requiring pre-acceptance ownership of TeamMate software?

    Answer: Under the heading of “General Qualifications,” Paragraph 2.1.1.1 in the RFP for Computer Audit Services reads as follows:

    2.1.1.1. Demonstrated knowledge and experience in using ACL and Teammate® software and the ability to prepare and maintain work papers utilizing TeamMate® over the course of an examination. A copy of the current TeamMate® license and a listing of jobs, with contact information, where TeamMate® was used must be attached to the RFP response. The successful bidder must use the version of TeamMate® currently in use or otherwise required by the DOI at the time of the examination.

    Although perhaps not explicitly stated, the requirement that you must have a current license and have experience using the software, as demonstrated by providing a listing of the jobs wherein it was used, means that you must already own the software at the time you file your proposal.


  • Actuary RFPs – Amounts Paid for Services.

    Question: During each of the last two contract periods, how much time was billed and how much did the DOI pay for each of (i) life & annuity – review of filings, (ii) A&H – review of filings, (iii) life & annuity – company examinations, (iv) A&H – company examinations, and (v) other tasks?

    Answer: We do not have a breakdown by services performed. The following table provides the total amounts paid for all actuarial services over the last three fiscal years:

    ContractorServiceFY05 FeesFY06 FeesFY07 Fees (to 4/30/07)
    Actuarial Resources CorporationL&D Actuary$29,751$3,250$3,601
    AGI ServicesL&D and P&C Actuary$2,416
    INS GroupExaminer and Actuary$51,550
    Kerper & Bowron LLCP&C Actuary$4,508$4,172
    Latta, Langston & DyerL&D Actuary$183,732$272,400$144,903
    Marsh ActuarialL&D Actuary$58,742$10,620
    Merlinos & Associates, Inc. P&C Actuary$207,946$218,968$65,679
    National Actuarial Network, Inc.L&D Actuary$61,437
    Taylor-Walker & Associates, Inc. L&D and P&C Actuary$89,553$83,012$88,636

  • All RFPs – Availability of Prior Work Product.

    Question: For the financial examinations, would the work product of prior examinations of the same Company be made available?

    Answer: Yes, but only for exams to which the contractor is assigned as this is confidential information.


  • Actuary RFPs – DOI Coordinator for Services.

    Question: Which department/position at the DOI will be coordinating the rate and form filings work? And then the same question for the financial examinations.

    Answer: For rate and form filings – Rates and Forms Division: Myra Frick, Manager, and Robert Turner, Life and Disability Rate Analyst. For financial examinations – Examinations Division: Richard Ford, Chief Examiner.


  • Actuary RFPs – Division of Services.

    Question: Excluding the “other activities” listed in Section 2.1, could you provide a rough estimate of the anticipated split between rate filing review vs. financial examinations (e.g., 50/50, 25/75, 75/25)?

    Answer: Approximately 75% of the work is on financial examinations and 25% is on rate filings.


  • Actuary RFPs – Work Location.

    Question: To what extent does the work under this contract have to be done on site at the Alabama DOI?

    Answer: Approximately 75% of the work is on financial examinations, for which the actuary will be expected to work on site at the insurance company. Approximately 25% of the work is on rate filings, for which the actuary will be expected to work on site at the DOI.


  • All RFPs – Date of Prior Contracts.

    Question: What were the calendar dates for each of the two last contract periods?

    Answer: October 1 to September 30. Should an existing contractor not be offered a renewal contract but has work that will extend beyond the end of the contract period, a contract extension may be utilized. This has only occurred once over the last five years.


  • All RFPs – TeamMate® software.

    Question: A representative of the company that sells TeamMate® said that given the high cost and likely infrequent use of the package, bidders under this contract should ascertain whether there is an existing holder of the TeamMate® license and software, such as the Alabama DOI, who could legally make access available to the actuarial contractor under this RFP. Could the Alabama DOI legally do this?

    Answer: We understand the TeamMate® license does not allow us to do this.


  • Actuary RFPs – Limiting Scope of Services to be Provided.

    Question: Can a firm be added to the list for some components and not others – such as for Rate and Form Filings along with Financial Exams but not Market Conduct Exams?

    Answer: Yes, but this limitation must be clearly indicated in the RFP response.


  • P&C Actuary RFP – Limiting Scope of Services to be Provided.

    Question: How many P&C Rate and Form Filings reviews requiring external actuarial services were performed in each of the last three years?

    Answer: We receive between 18,000 and 20,000 property and casualty rate and form filings each year. Of these, the actuary will be asked to review approximately 200 personal lines rate filings, generally representing the filings from the companies representing the top ten by market share or from companies seeking overall rate increases of 10% or greater. Also, any workers compensation filing by the NCCI will be reviewed by the actuary.


  • P&C Actuary RFP – Number of Market Conduct Examinations per Year.

    Question: How many P&C Market Conduct Examinations requiring actuarial services were performed in each of the last three years?

    Answer: We conduct between 10 and 20 full examinations (financial and market conduct) each year. Separate market conduct examinations are called as needed. In the current fiscal year we have called approximately 15 market conduct examination (3 insurers and 12 agencies). In the two previous fiscal years we only conducted 1 market conduct examination.


  • P&C Actuary RFP – Cost of Market Conduct Examinations.

    Question: What have been the annual costs for the actuarial services in conjunction with the Market Conduct Examinations?

    Answer: We do not have a breakdown by services performed. The total costs paid are shown above in response to another similar question.


  • P&C Actuary RFP – Number of Financial Examinations.

    Question: How many P&C Financial Exams requiring actuarial services were performed in each of the last three years?

    Answer: We typically conduct between 10 and 20 full examinations (financial and market conduct) each year. The majority of Alabama domestic companies are property and casualty companies (approximately 35 of 46).


  • P&C Actuary RFP – Cost of Financial Examinations.

    Question: What have been the annual costs for the actuarial services in conjunction with the Financial Examinations?

    Answer: We do not have a breakdown by services performed. The total costs paid are shown above in response to another similar question.


  • P&C Actuary RFP – Number of Financial Examinations.

    Question: How many P&C financial exams requiring actuarial services were performed in each of the last three years and what was the actuarial cost of each? Do you anticipate a similar number of annual exams in the future?

    Answer: We typically conduct between 10 and 20 full examinations (financial and market conduct) each year. The majority of Alabama domestic companies are property and casualty companies (approximately 35 of 46).


  • All RFPs – TeamMate® Software.

    Question: Do all projects require the use of the TeamMate® software or just the Market Conduct and Financial Examinations?

    Answer: All financial and market conduct examinations require the use of TeamMate®. Review of rate and form filings does not require the use of this software.


  • All RFPs – TeamMate® Software.

    Question: General Qualification 2.1.1.10 asks for demonstrated knowledge and experience in using TeamMate® software in the course of an examination. If a responding company has not used TeamMate in the past but are fully prepared to devote the time and resources to comply going forward, can they still qualify as a contractor under this RFP?

    Answer: No.