How we help you
Insurers face an ever-evolving regulatory landscape that increasingly requires more resources to manage effectively. Let Wipfli help you develop a risk strategy that keeps your organization compliant and safe while still driving productivity and profitability.
Enhance compliance with ORSA and other regulations.
Navigate security frameworks, including HITRUST and ISO 27001.
Get scalable support for your internal audit function.
Proactive solutions for managing your risk
Wipfli’s insurance regulatory compliance services can support your in-house operations in navigating complex regulations and implementing best practices for governance, compliance and risk models.
Explore our risk and regulatory compliance services
Whether your company needs to develop or evaluate your enterprise risk management plan, Wipfli can help. Our team provides support for improving and developing plans to maintain a sound risk structure and ORSA compliance.
Wipfli applies our extensive experience in ISO 27001 audits to support your certification success. Our team conducts audits in the same manner as certifiers so that you’re better prepared to provide policies, procedures and supporting evidence.
Get experienced support for your needs at each stage of the HITRUST assessment. Wipfli is one of the longest-tenured HITRUST Assessor firms. We understand the complexities you face during assessments, and we’re ready to help you prepare by determining an accurate scope, identifying controls and developing targeted solutions for any gaps.
Wipfli’s audit team brings an advisory mindset and insurance industry experience to help you identify risks and develop a tailored internal audit plan. We scale our services to your needs, whether you want a hands-off solution or support for your existing internal audit team. And we provide actionable guidance for remediation to help you better determine the solutions and approaches that can meet your company’s needs.
Insights and resources
PODCAST
Podcast: Maximize tech and talent with smarter insurance filing
Insurance companies face significant challenges in keeping up with changes in statutory requirements amid intensifying workforce pressures. In this episode of Bank on Wipfli, we explore how insurers are adapting to major shifts in statutory financial reporting and annual statement filings. Wipfli Partner Robert Zondag talks with Burch LaPrade, CEO of Gain Compliance , about evolving issues with insurance filings, including: The growing talent gap in statutory accounting, driven by retirements and limited new entrants to the field. The constant evolution of NAIC regulations, including seismic changes like the principle-based bond definition and expanded Schedule P history. How insurers are being asked to do more with less, including off-cycle reporting and modeling what-if scenarios. The role of technology in streamlining workflows , improving collaboration and delivering contextual guidance for complex filings. Why successful filings require more than software — how support and education are critical to reducing stress and improving outcomes. Gain more insights: How insurance firms can approach AI like today’s digital leaders Podcast: Breaking the security-convenience seesaw The Amazon of insurance: Who will emerge as the industry leader? Listen on Apple Podcast Listen on Spotify
CASE STUDY
Cross Insurance TPA, Inc.
Ensuring business continuity: Wipfli’s advice helped Cross Insurance switch to remote work — and maintain business continuity during vulnerable times.
ARTICLE
How Discount Rates, Inflation and Uncertainty Factor Into Economic Damage Calculations
Interest rate considerations figure into almost every litigation project. Any situation involving pecuniary damages requires a thorough analysis of the expected timing of lost cash flows as well as an understanding of “time value of money” and risk inherent in the litigated financial transaction. Time value of money is a widely accepted tenet in litigation support The concept refers to the fact that a dollar received today is worth more than a dollar received in the future. The presence of damages accumulating over a past period generally requires an examination of interest accruing to the plaintiff. A plaintiff who sustains monetary damages cannot be made whole without considering interest on the funds they lost due to a defendant’s wrongful conduct. Damages accruing over a period of time represent financial opportunities lost, or interest, in its purest economic sense. The presence of damages projected over a future time period likewise warrants an examination of time value of money and a resultant calculation of present value. The obvious place to start any time value of money calculation is with interest rates. Money can be invested, which means any current award of future or past financial damages should take into consideration the applicable interest rates. The choice of a proper interest rate is influenced by the type of litigation project, the time period of the loss and an assessment of risk inherent in the proposed loss calculation. Interest rates, however, are only a part of the puzzle in many litigation contexts, as real-life factors such as case-specific considerations, inflation, the state of the economy, industry expectations and wage growth rates influence the magnitude of but-for cash flows. Developing a reliable discount rate should consider: Expected cash flow or income stream (taking into account the risk of achievement). The degree of penalty for risk of variability in the return. The timing of cash flows or income stream. Risk-free rate of return. 1 In certain situations, such as a personal injury or wrongful death calculation, examining risk-free interest rates may prove to be a sufficient basis for a present value calculation. In others, reference to state-specific statutes establishes the guidelines for interest rate computations. Every lawsuit is different, however, and case-specific as well as jurisdictional considerations influence a financial specialist’s approach to establishing a supportable discount and/or interest rate. Two of the most common litigation contexts and related interest rate considerations are discussed below. Personal Injury, Wrongful Death and Wrongful Termination Cases Personal injury types of cases typically necessitate projecting an individual’s earnings over a future time period. The time period involved must be supported with statistical data, research and pertinent publications. Although relevant case law must be examined in each litigation project, it is generally accepted that a risk-free rate should be used in such calculations. As stated in the “Discount Rates, Risk, and Uncertainty in Economic Damage Calculations” publication by the American Institute of Certified Public Accountants (AICPA): It is generally accepted that the discount rate to be applied in these matters [personal injury, wrongful death and wrongful termination cases], after consideration of earnings growth, should not submit the plaintiffs to undue risk considerations, which has often resulted in the use of risk-free discount rates. The justification of such rate is that this rate will permit the plaintiff to replicate the lost earnings stream by reinvesting the amount paid in a judgment in the “best and safest investments.” 1 The litigation support specialist in personal injury cases has the responsibility of choosing a supportable risk-free rate based on the timeframe of the damage period. They should give additional consideration to the relationship between the chosen discount rate and the wage growth rate, as well as inflation expectations inherent in a lost wage calculation. Certain types of cases may require a separate calculation for medical costs. As they require a deeper examination of the relationship between interest rates and medical costs inflation, future medical costs computations add an extra layer of complexity to a financial specialist’s report. Medical service costs have historically increased at rates unseen in other industries, and medical inflation must be scrutinized in order to obtain a viable conclusion of the present value of future medical expenditures. Lost Profits Lost profits cases present unique issues in computing discount rates. Although consideration of risk-free rates is to be expected in a lost-profits scenario, the risk inherent in a business venture may be greater than a historical risk-free rate. In order to determine the appropriate interest rate, a specialist must examine the reliability of the projected cash flows as well industry and market conditions under which a given business operates. The variability of outcomes in a business projection may be implicitly or explicitly considered in a lost profits calculation.1 An interest rate that explicitly takes into consideration the business risks inherent in a particular transaction may be appropriate under certain circumstances. As an alternative, use of multiple models or scenarios may be justified where significant uncertainty as to projected amounts exists. As you can see, the breadth of litigation-related economic calculations is hard to overstate. Leveraging a witness who specializes in litigation support calculations provides a supportable opinion as to the amount of damages, the appropriate time period for the calculation and a viable interest rate. Such service is certain to have a meaningful and positive impact on the outcome of a litigated monetary award. If you want to learn more about interest rate considerations or engage a specialist for litigation support, contact Wipfli. [1] “Forensic & Valuation Services Practice Aid: Discount Rates, Risk, and Uncertainty in Economic Damages Calculations,” AICPA, 2013
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