1) Review of background/credit checks received via secured/password protected email from IDSnetwork, Inc.
2) Perform internet and public records search (google, corporate search, dept. of secretary, state bar etc.). Share information with Management and Audit, upload copies into agent database
3) Copy of title licenses are obtained for the agency and all appropriate agent employees
Agents are maintained in the database, once their set up is complete:
1) Issuing Agency Contract information
2) Maintain employee and branch office roster
3) Insurance/bond coverage information
4) State specific requirements
.....b. DOI notifications
.....a. Identify any concerns or risk issues with agent
..........· Identify if the agency has an affiliated business relationship with a realtor, lender, etc.
..........· Identify if the agency operates in different states, and review the requirements of ..........each state for escrow accounts, mandated audit requirements, etc.
.....b. Contact agent to schedule the audit and provide a list of items that the Field Auditor .. ..and Trust Account Group requires
.....c. Pull reports for agent and review for potential risk issues
.....d. Review prior internal audit report
..........· Department of Insurance audit reports (Texas)
..........· Outside CPA audit reports (Ohio, Arizona)
..........· Other underwriter (Virginia, Kansas)
.....e. Perform an internet search and look for potential risk issues involving the managers .....or principals and company business name(s).
2) Trust Account Group Preliminary Results
.....a. Obtain and review Trust Account Group’s preliminary results, consisting of:
..........· Initial report draft with any preliminary findings
..........· Work papers detailing follow-up needed during the on-site file review to finalize ..........Trust Account Group’s reconciliation work
3) Obtain Issuing Agency Contract from Title Resource Production System (TRUE)
.....a. Review terms as indicated in TRUE
.....b. Document agency-underwriting split as indicated in TRUE
4) Discuss with legal if Agent Metric reports indicate significant issues in the following areas:
.....a. Lag calculation- time span between the effective date of policy versus when the policy .....has been reported to Title Resources
.....b. Accounts Receivable
.....d. Monthly remittances
General Field Work
1) Confirm insurance coverage is current (e.g. E&O, Surety, and Fidelity) and in compliance with Issuing Agency Contract
2) Complete Internal Control Questionnaire
1) Based upon fieldwork, we ensure the list of bank accounts supplied by the agent is complete.
.....a. Recording and all escrow accounts
.....b. Reconcile Schedule A from prior year's audit
2) Determine if escrow accounts contain an investment feature, if so; determine type of investment (e.g., sweep, repurchase, etc.)
3) Complete testing of the unusual items noted by Trust Account Group’s reconciliation review
4) Review a random sample of files using the standard Title Resources’ File Review. Title Resources may pull its sample from the following:
.....a. Remittance reports
.....b. Policy registers
.....c. Check registers
.....d. Order logs
.....e. Trust Account Group 3-way reconciliation components
.....f. CPL reports
5) Review random sample of files for verification of mortgage payoffs clearing and note exceptions
6) Reconcile checks from bank statement to the cancelled checks for one month (if applicable)
7) Review a sample of cancelled checks (images or hard copies) for the following:
.....a. Payoff check slow clearing
.....b. Improper, unusual or lack of endorsement
.....d. Unusual payees, unusual check signer, unusual or lack of file number
.....e. Large check payable to the agent or an employee
.....f. Large even dollar check, or transfer to/from bank accounts
8) Request three month listing of all voided checks, review and test small sample for proper payee
9) Determine if the agent has interest bearing (escrow savings) accounts and withdrawal activity
1) Document how often the agent remits (operating system contains a field for Average Report Date which is to be completed by revenue manager)
2) Determine the number of files that require a policy to be typed and the corresponding lag
3) Based on the number of policies not remitted, determine the amount due based upon the average net remittance per policy
4) If the agent has a separate premium account, perform the following:
.....a. Determine if the agency has adequate funds in the account to cover outstanding premiums
.....b. Review disbursements out and determine if the payments are all paid to underwriters; .....note any exceptions
1) At conclusion of review, we meet with the principal to discuss findings and recommendations. For significant findings, we obtain an agreement on a reasonable implementation date.
2) Written summary and report findings to Audit Manager
Much goes into an agent becoming and remaining Title Resources certified. We take much pride in knowing that each of our agents have been vetted, audited and approved in the past and will be held to the same standards continually. After all, being selective makes a big difference.
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