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📋 '''Due diligence checklist''' is a structured document that catalogues every category of information a prospective buyer, investor, or [[Definition:Reinsurance | reinsurer]] needs to review before completing a transaction involving an insurance business. It functions as the operational backbone of the [[Definition:Due diligence | due diligence]] process, ensuring that no critical area — from [[Definition:Loss reserves | reserve adequacy]] and [[Definition:Claims | claims]] history to [[Definition:Insurance regulation | regulatory]] compliance and [[Definition:Information technology | technology]] infrastructure — is overlooked. In insurance M&A, the checklist is materially more complex than in many other industries because the target's liabilities are long-tail by nature, the business is subject to multi-jurisdictional regulatory oversight, and the accuracy of financial data depends heavily on [[Definition:Actuarial | actuarial]] estimates.

⚙️ A well-constructed checklist for an insurance target typically spans dozens of categories. Core sections include corporate and organizational documents, financial statements under both [[Definition:Statutory accounting | statutory]] and [[Definition:Generally accepted accounting principles (GAAP) | GAAP]] or [[Definition:International Financial Reporting Standards (IFRS) | IFRS]] frameworks, [[Definition:Actuarial report | actuarial reports]] and reserve analyses, [[Definition:Reinsurance | reinsurance]] treaties and recoverables, [[Definition:Underwriting | underwriting]] guidelines and [[Definition:Binding authority agreement | binding authority agreements]], [[Definition:Policy | policy]] forms and rate filings, regulatory examination reports, market conduct findings, and pending or threatened [[Definition:Litigation | litigation]]. For [[Definition:Insurtech | insurtech]] targets, additional sections cover intellectual property, [[Definition:Application programming interface (API) | API]] architecture, data privacy compliance (including [[Definition:General Data Protection Regulation (GDPR) | GDPR]] and equivalent regimes), and technology vendor contracts. The checklist is typically issued to the seller at the outset of diligence, and the seller populates a [[Definition:Virtual data room (VDR) | virtual data room]] with responsive documents organized to mirror its structure.

💡 Far from a mere administrative exercise, the checklist shapes the entire trajectory of a deal. Items that remain outstanding or where the seller's responses are incomplete often surface as risk factors in the [[Definition:Due diligence report | due diligence report]] and may drive specific [[Definition:Representation and warranty | representations and warranties]], [[Definition:Indemnification | indemnification]] provisions, or [[Definition:Purchase price adjustment | purchase price adjustments]] in the [[Definition:Share purchase agreement (SPA) | share purchase agreement]]. In cross-border insurance transactions — such as a European acquirer purchasing an Asian [[Definition:Insurance carrier | carrier]] — the checklist must be tailored to reflect local regulatory regimes, accounting standards, and market practices, which can vary dramatically. Experienced deal teams maintain template checklists honed over multiple transactions but customize them for each target's specific lines of business, geographic footprint, and corporate structure.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Due diligence]]
* [[Definition:Due diligence report]]
* [[Definition:Due diligence questionnaire (DDQ)]]
* [[Definition:Virtual data room (VDR)]]
* [[Definition:Actuarial report]]
* [[Definition:Representation and warranty]]
{{Div col end}}

Definition:Due diligence checklist - Revision history

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