Associate in Premium Auditing – Definition

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Associate In Premium Auditing (APA) Definition

The Associate in Premium Auditing refers to a professional designation that the Insurance Institute of America (IIA) awards individuals who successfully complete the required six national exams. In other words, the APA is an individual who has been granted a professional status by the IIA to perform premium auditing duties as well as other financial obligations in an insurance firm.

Out of the six exams, two are for the APA program, while the remaining four are for Chartered Property Casualty Underwriter courses.

A Little More on What is an Associate In Premium Auditing – APA

The Insurance Institute of America (IIA) oversees the activities of the Associate in Premium Auditing designation. The IIA was founded in 1978 to mainly educate insurance brokers/agents, risk managers, underwriters, including other insurance professions through seminars.

The IIA has since broadened its scope with the support of the International Risk Management Institute. It now produces the most practical risk and comprehensive and insurance library of any available publisher.

The APA program allows individuals to earn auditor designation, also known as NSIPA. The designing of the program is to enable the applicants to carry out audits in their firms with high standards of professionalism.

The APA program focuses on expanding individuals’ general knowledge so that they can familiarize themselves with the right procedures for auditing in various premium auditing scenarios. The program offers an in-depth education in the following areas:

  • Insurance contracts
  • Principles of insurance accounting
  • Auditing procedures
  • Casualty insurance company accounting
  • Relationship premium auditing focusing on other insurance operations

The holders of the APA designation are widely sorted after experts by insurance firms. The is that they are believed to possess the best credentials for analyzing contracts as well as with comprehensive knowledge as far as parsing financial data is concerned. They have collective skills that are not limited because they also have the ability to apply auditing and accounting methodologies to various insurance products and contracts.

Generally, the APA designation strengthens an individual’s control and accounting protocols. These two are necessary for ensuring that insurers become competitive when it comes to product provision and pricing, without affecting their fiscal management’s high standards.

Who should do the APA Program?

The program is recommended for professionals with extensive knowledge of insurance principles and those with accounting skills. The program is, therefore, beneficial to the following group of professionals:

  • Premium auditors
  • Underwriters
  • PRemium auditor trainees

APA Program Course and Exam Requirements

To earn the APA designation, the applicant must first meet certain course and exam requirements, including the ethics requirements. The level of the APA course is intermediate, and the program has a time frame ranging between 12 to 18 months.

Course Requirements

The program course is a self-study course, and it consists of three required courses and one elective course. They are as follows:

Required Courses

  • APA 91- Principle of Premium Auditing
  • APA 92- Premium Auditing Applications
  • CPCU 520 – Insurance Operations Regulation and Statutory Accounting

Elective Course (Applicant to choose one from the listed two)

  • CPCU 540- Finance for Risk Management and Insurance Professionals
  • CPCU 552- Commercial Liability Risk Management and Insurance

Examinations Requirements

The national exams are made available at a local testing center in two-month windows, as shown below:

  • January 15 to March 15
  • April 15 to June 15
  • July 15 to September 15
  • October 15 to December 15

The exam set up and duration varies depending on the course. For instance, APA 91 and APA 92 exams take a duration of two hours each. The exam has 85 objective questions (questions with multiple choices), and the administration is on a computer.

On the other hand, CPCU 520, CPCU 552, and CPCU 540, each take three hours to complete. The three exams are in the form of an essay, and it is computer-administered.

Note that an applicant is required to pay for the exams before taking them. Also, the results are released immediately an applicant completes the exams.

Ethics Requirements

To earn the APA designation, it is mandatory for an applicant to las the 50 questions exam contained in the Ethical Guidelines for Insurance Professionals online module. The Insurance Institute of America provides the ethics exam free of charge. However, for an applicant who wishes to obtain CE credits for successfully completing the objective, 50 questions, online exam included, then he or she has to part with $5 administrative charges.

Other Considerations

Note that there is no education or experience that an applicant is required to meet for him or her to do the APA program. Also, the candidate is not obligated to meet any requirements to do with the annual continuing education for him or her to pursue the APA designation. Lastly, there are also no annual fees required for the designee to maintain his or her APA designation.

Reference for “Associate In Premium Auditing – APA” › Investing › Financial Analysis…/associate-in-premium-auditing-apa-apa

Academics research on “Associate In Premium Auditing – APA”

Audit fee premium: the effect of King-III, Pendehama, V. (2014). Audit fee premium: the effect of King-III (Doctoral dissertation). In the wake of recent corporate scandals at world-renowned companies such as Enron and WorldCom, public confidence in the role of the auditing profession plummeted. At the time, the profession was no longer perceived to be acting in the best interests of the public thus prompting regulatory authorities and civic organisations to initiate certain intervention measures. In America, the Sarbanes-Oxley Act of 2002 (SOX) was enacted which introduced mandatory sweeping corporate governance initiatives. When SOX was introduced, it was criticised for triggering increased compliance costs as well as creating fee opportunities for the audit profession (Griffin & Lont, 2007). In South Africa, corporate reforms came in the form of King-I to III codes of corporate governance. In particular, King-III introduced the concept of integrated reporting (IR) which recommends that companies report holistically on both financial and sustainability (economic, social and environmental) issues. In contrast to SOX, the application of King-III is voluntary on an “apply or explain” basis. Using a quantitative approach with multiple regression analysis and Analysis of Variance (ANOVA as the statistical techniques, three sets of models were run to examine two hypotheses. The first hypothesis sought the evidence pointing to whether the BIG4 audit firms were charging an audit fee premium in response to the recommendation of King-III on IR, while the second hypothesis examined if there was a relationship between audit fees and non-audit service fees. The empirical results of the study attested to the BIG4 firms charging an audit fee premium while also proving a statistically significant relationship between the two types of fees. The findings of the research study have implications for both the auditing profession and for the regulators, and will also add a South African dimension to the existing body of knowledge on the subject.

Lost productive work time costs from health conditions in the United States: results from the American Productivity Audit, Stewart, W. F., Ricci, J. A., Chee, E., & Morganstein, D. (2003). Lost productive work time costs from health conditions in the United States: results from the American Productivity Audit. Journal of occupational and environmental medicine, 45(12), 1234-1246.

EQUITY RISK PREMIUM PADA INDUSTRI PERBANKAN, Harjito, Y., & Hapsari, D. I. (2016). EQUITY RISK PREMIUM PADA INDUSTRI PERBANKAN. BISNIS: Jurnal Bisnis dan Manajemen Islam, 4(2), 59-77. This study aims to examine the factors that influence the equity
risk premium in the banking industry are listed on the Indonesia Stock Exchange. The samples used were 23 banking industry for 2010-2014. Five variables proposed that auditor tenure, earnings quality, leverage, beta, and earnings per share to detect whether there is an influence on the equity risk premium. Equity risk premium is desired reward investors to generate income is not fixed in relation to the equity share hers. So far the equity risk premium is often described as the most important value in finance and investment. Analysis of the data used in this research is multiple linear regression with the hope to obtain a comprehensive picture of the influence of variables auditor tenure, earnings quality, leverage, beta, and earning per share of the equity risk premium by using SPSS version 21 for Windows. The results showed that the auditor tenure, earnings quality, and earnings per share significantly affect the equity risk premium. But two other variables (leverage and beta) proved no effect on the equity risk premium.

Product Market Competition, Related Party Transactions and Fee of Audit Services, AbbasZadeh, M., Ghannad, M., & BehSoodi, A. (2017). Product Market Competition, Related Party Transactions and Fee of Audit Services. Journal of Accounting and Auditing Review, 24(1), 61-80.

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