N.C. Audit Reveals Insurance Commission’s Questionable Expenses

A state audit has found Insurance Commissioner Jim Long and his deputies should have more closely monitored questionable expenses from a trust for insolvent insurance companies on meals, travel, computers and other items.

According to the Raleigh News & Observer, none of the scrutinized payments which totaled more than $122,000, involved tax money. But the office of State Auditor Les Merritt said the operators of the trust should be held to the same purchasing and professional standards applied to state employees.

Commissioner Long said Monday that his department was making changes to ensure that the trust operated in compliance with state government rules, rather than just the practices of private business.
“I do not think that was proper,” Long said of some of the expenses.

The courts created the Regulation Actions Division Trust in 1995 as a way to maintain a central account for insolvent insurers incorporated in North Carolina. The trust had $400,000 as of June 30 covering seven companies in receivership.

The money is used to liquidate a company’s assets, pay off creditors and ensure that annuities are paid or that policyholders can get new policies with other insurers.

“Trust management operated under a belief that RAD Trust and the estates could operate outside the restrictions and limitations of state government,” the audit report said.

In March, Long asked the auditor’s office to conduct the review after the Insurance Department finished its own internal review.

Topics North Carolina