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Accounting Section

Mission

To serve and protect the interests of claimants and the state by ensuring the accurate and complete recording and reporting of the assets and liabilities of troubled insurance companies and related entities in a timely and fiscally responsible manner.

Program Responsibilities of the Section

The Accounting Section is composed of four units: General Accounting and Controller, Estate Accounting, On-Site Accounting, and Tax Compliance.

The responsibilities of the Accounting Services Section are to:

  • Provide accurate, complete and timely financial information for the Division, the Courts and the claimants.
  • Support division management with financial forecasting for companies in the early stages of a receivership to determine cash needs and current surplus.  This information is vital to help determine whether a company should go into rehabilitation or liquidation.
  • Identify, record, and report assets owned by the various estates under administration.
  • Ensure the timely and accurate payment of all legitimate liabilities of the estates under administration.
  • Produce quarterly financial statements for all companies in liquidation.
  • Ensure tax compliance for the Division and each of the estates under administration.
  • Ensure timely submittal of financial statements and of all statutory financial filings for rehabilitation companies in all states wherein the companies are licensed.
  • Distribute estate assets in compliance with applicable court orders and accurately track the distribution.
  • Manage the performance of outside accounting contract providers.

Accomplishments in the 2006-2007 Fiscal Year

Controller’s Unit:

  • Processed more than $424,000,000 in cash receipts and $433,000,000 in cash disbursements related to activities of the Division and on behalf of the various estates in receivership. Issued over 12,000 checks to claimants totaling $37,000,000 for seven (7) receiverships.
  • Provided daily investment management for $309,000,000 in receivership cash assets.
  • Continued to refine processes to ensure current and practical accounting policies and procedures.

Estate Accounting Unit:

  • Administered the accounting functions of  48 estates in liquidation and assisted with companies in rehabilitation.
  • Continued to improve the accounting processes for claims distributions and receivership discharges. Staff completed seven (7) distribution accountings and six (6) discharge accountings during the year.

On-Site Accounting Unit:

  • Monitored the monthly, quarterly, and annual statutory accounting functions for 5 estates in rehabilitation.
  • Transitioned the accounting processes of 3 new companies that were placed in receivership to the Receiver’s accounting staff.
  • Managed forensic accountants for various estates in support of litigation efforts.

Tax Accounting Unit:

  • Completed or extended income tax returns for 48 companies in liquidation in a timely manner.
  • Monitored the production of tax returns for companies in rehabilitation.
  • Collected more than $19,000 in refunds for past taxes paid by companies in receivership.
  • Continued to streamline the W-9 collection process to ensure that the Section has accurate data to produce 1099s for companies in liquidation.  Monitored the production of 1099s for companies in rehabilitation.

Other accomplishments in the 2006-2007 Fiscal Year include the following:

  • Drafted suggested changes to the National Association of Insurance Commissioners (NAIC) Accounting and Financial Analysis chapter of the Receiver’s Handbook for further submission to the NAIC.
  • Implemented a time and expense model in the Division’s accounting information system to track internal labor costs expended on estates more accurately and enable the Receiver to recover internal legal costs under F.S. 631.154 (6)(d).
  • Reimbursed properly completed general operating invoices within 12 business days of receipt.
  • Continued to improve the efficiency and effectiveness of the process for taking over bank accounts of new companies in receivership by aggressively using electronic and internet-based resources.
  • Provided cash flow projections and financial analysis to help facilitate the transitioning of policies for Florida Select Insurance Company to other insurers.
  • Continued the review of estate accounting records stored at outside warehouse facilities and compiled records destruction recommendations for a number of estates, resulting in a significant reduction in records storage costs for those estates.
  • Continued the special court-approved distribution procedures set up for the Cumberland Registered Investment Advisor distribution.
  • Continued efforts to increase the availability of financial information to Division personnel using a comprehensive system for imaging all accounting documents with corresponding links in the accounting system.
  • Continued to utilize the new Estate Accounting workpaper procedure to help better organize accounting documentation in the early stages of receivership.

Goals

From a strategic perspective, the Accounting Section continues to refine processes and will be working on the following goals:

  • Compose a new policy & procedure that more fully addresses the accounting, transfer, and inventory of fixed assets.
  • Draft a tax allocation agreement for potential use by the Office of Insurance Regulation that is more equitable to companies that go into receivership and would allow those companies to recover taxes saved by other members of their consolidated tax group.
  • Develop additional financial and management reports that are more responsive to customers’ needs.
  • Increase the efficiency of completing and publishing quarterly and fiscal-year-end financial statements.
  • Continue to refine annual budgets of companies in liquidation.
  • Evaluate suggestions listed in the internal review of the Section’s accounting policies and procedures and implement those that would be beneficial to the Receiver.
  • Continue to fine tune procedures involved in bringing a new company into rehabilitation or liquidation.

Staff and Contact Information

The Director of Accounting oversees the daily activities of 20 professional, technical, and support staff in the Tallahassee office. The Accounting Section can be reached at the Division’s main telephone number, (850) 413-3179, by fax at (850) 922-2555, or via the Internet at www.floridainsurancereceiver.org.