Evidence-by-Default: Making Delegated Authority Audits Painless

Delegated Authority (DA) is one of the most powerful levers insurers have to scale—pairing local expertise with central capacity. But as portfolios grow, so does the oversight burden. Too often, DA governance gets stuck in email threads, offline trackers, and heroic spreadsheeting—great for short bursts, terrible for repeatable control. The fix isn’t “more documentation.” It’s evidence-by-default: designing your DA processes so that proof of good governance is captured as the work happens, not weeks later during audit panic.

This post unpacks what evidence-by-default means in practice, why it matters, and how to implement it without slowing the business.

Why audits feel hard (and how to make them easy)

The pain today

• Evidence is scattered: contract versions on shared drives, approvals in email, KPIs in someone’s workbook.

• Reviews aren’t traceable: decisions are made, but the “who/when/why” lives in people’s heads.

• Prep is reactive: teams scramble to rebuild history when auditors ask basic questions.

  
  

The evidence-by-default alternative

• Single source of truth: contracts, assessments, workflows, and MI live in one place.

• Automatic provenance: every approval, exception, referral, and finding leaves a timestamped trail.

• Real-time status: leadership can see bottlenecks and risks without staging a reporting exercise.

  
  

Result: when audit comes, you already have the story—coherent, current, and defensible.

The five pillars of evidence-by-default

1. Contract clarity (and version control)

   • Store binders/TOBAs centrally with enforced versioning and named approvals.

   • Encode scope and limits (territory, classes, endorsements, referral rules) as structured data—so MI, bordereaux checks, and referrals key off the same source.

   • Capture deviations as explicit “exceptions” with rationale, approver, and expiry.

     
     

2. Due-diligence that writes its own audit

   • Standardise onboarding packs (KYC/KYB, financials, controls, sanctions/PEP, licensing).

   • Use templated assessments with mandatory fields, evidence upload, and scoring guidance.

   • Record outcomes (approve/conditions/decline) with reasons and next review dates.

     
     

3. Role-based workflows with SLAs

   • Replace inbox ping-pong with orchestrated steps (underwriting → compliance → legal → ops).

   • Assign owners and due dates; auto-notify on expiries and stalled tasks.

   • Log referrals and overrides with comments—this becomes your narrative during review.

     
     

4. Risk register that actually drives action

   • Maintain a living register per partner/binder: inherent vs. residual risk, control effectiveness, and triggers (e.g., loss ratio spikes, overdue audits, sanctions hits).

   • Use thresholds to flag escalation paths; tie actions to owners and follow-through dates.

   • Link each risk to the evidence (assessment answers, supporting docs, MI snapshots).

     
     

5. MI you can trust

   • Minimum viable pack: bordereaux exceptions, loss trends, premium/claim leakage indicators, SLA hits/misses, audit findings to closure.

   • Pull MI from the same structured sources used by contracts and workflows—no duplicate data wrangling.

   • Show trendlines and explainers, not just raw tables; surface “what changed and why.”

     
     

A practical blueprint (90 days)

Days 1–30: Stabilise

• Inventory the truth: list your current binder templates, onboarding questionnaires, and audit checklists. Identify overlaps and gaps.

• Choose your golden sources: designate where the master versions of contracts, assessments, and MI live. Everything else is a view.

• Standardise templates: agree on a single assessment set (with optional extensions by geography/class) and a minimal contract data model.

Days 31–60: Orchestrate

• Map the workflow: who approves what, in what order, with what SLA. Document referral rules and authorities.

• Instrument the process: implement task queues, due dates, and automated reminders. Configure exception capture and approvals.

• Wire MI outputs: connect structured contract data and assessment results to dashboards; define a monthly governance pack.

  
  

Days 61–90: Prove & refine

• Dry-run an audit: pick two partners and reconstruct an end-to-end story from your system. Note any manual steps still needed—eliminate them.

• Close the loop: ensure audit findings become workflow tasks with owners and deadlines; track to closure.

• Codify playbooks: write short how-tos for onboarding, renewals, and audits so new staff follow the same path.

  
  

Common pitfalls (and how to dodge them)

• Pitfall: “We’ll tidy the evidence later. ”Fix: Make uploads/approvals blocking steps. If there’s no evidence, the workflow won’t advance.

• Pitfall: “Our process is unique for every partner. ”Fix: 80/20 rule. Standardise a core path; allow extensions for niche risks. Consistency beats bespoke chaos.

• Pitfall: “We track risks in a spreadsheet because it’s quick. ”Fix: Quick now, expensive later. Move the risk register into the same system that drives tasks so mitigation is actioned, not just noted.

• Pitfall: “We have MI, but no one trusts it. ”Fix: One definition per metric, owned by governance. Show lineage (where it comes from) directly in the dashboard.

  
  

What “good” looks like on review day

When auditors (or internal assurance) ask for evidence on a binder, you can show—in minutes:

• The current contract with scope/limits, plus a version history of changes and approvals.

• Onboarding assessments with scores, attachments, and the decision rationale.

• A timeline of key events: referrals, overrides, endorsements, renewals.

• MI snapshots at quarter-ends and exceptions raised/closed.

• The risk register entries, their triggers, and actions to closure.

• Audit findings from last cycle and proof they were remediated on time.

  
  

No hunting. No recreating. Just opening the record.

Measuring success

Track these before/after metrics to prove the value:

• Onboarding cycle time (submission to bind/approval)

• Emails per case (or handoffs per workflow)

• Audit prep hours per binder

• Findings repeat rate (issues re-raised across cycles)

• Evidence completeness (percentage of steps with attachments/approvals captured)

• Exception half-life (median days from raise to close)

  
  

If you see cycle times shrinking, prep hours dropping, and repeat findings declining, you’re on the right track.

Final thought

Evidence-by-default doesn’t mean more bureaucracy; it means capturing proof in the slipstream of real work. For DA professionals, that’s the difference between “audit as an event” and assurance as a by-product. It’s faster for the business, fairer on teams, and clearer for regulators.

If you’re ready to move from reactive audits to built-in assurance, start with the five pillars—and make your next review the easiest one yet.