One way you can check if the IPS policy is assigned to a system:
1. Go to the system
2. Go into the Regedit
4. Note the value data for this key. Make sure the name of your policy is listed.
If you see your policy is listed, you might have a bigger issue. One other thing you may want to do is reinstall the McAfee Agent and HIPS before going any further.
Thank greatscott. What ended up being the issue is that exception rules "AND" executables and files (under parameters) together. I needed to split it up into two exception rules for one McAfee rule. One exception rule for the executables, and one for the files.