Texas Department of Insurance
An Audit Report on Management Controls of the Texas Property and Casualty Insurance Guaranty Association
Report Number 95-136
Overall, management controls at the Texas Property and Casualty Insurance
Guaranty Association (Association) are generally effective. The Board of
Directors and management of the Association should continue to strengthen
specific management controls to improve accountability and control costs.
The Board of Directors should approve limits on investment risks that are
compatible with the Association's overall mission in order to lessen the risk
of future investment losses. The Association lost $3.3 million on sales of
investments in 1994, primarily due to interest sensitive investments.
Investment earnings of $13.3 million offset investment losses.
Management can improve accountability and control costs by:
- Improving performance measures for claims processing.
- Taking a more active role in planning and monitoring automation projects.
The Association abandoned automation projects costing $282,582 in 1994.
The Association's purpose is to pay, fairly and in a timely manner, valid
insurance claims involving insolvent property and casualty insurance
companies, according to Texas laws.
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